All Forum Posts by: Sean Spitzer

I'm not sure about the scenario you are describing, but I have seen the opposite of what you are saying recently. We underwrote a property this week that looks like the seller is going to need to take a hit to get rid of the property. They way overpaid in 2016, the property hasn't performed and not their I/O period on the loan is up. They want at least $2mil too much.

 I agree with this approach Charles. I was looking at a deal recently that had about 18 months of debt service reserves in the projections by the GP. That of course drags returns, but is pretty prudent based on where we are economically right now. Front page of CNBC this morning has this article:

https://www.cnbc.com/2020/07/24/28-million-americans-face-eviction-because-they-cannot-afford-rent.html

My guess is it will be more than $100, but I don't think there's any doubt the $600 to this point has had a significant impact on keeping rents coming in. Losing $2k month may put some pressure on certain properties. Maybe it will encourage some folks to try to get back to work. Who knows. I guess we'll find out.

https://www.cnbc.com/2020/07/23/coronavirus-stimulus-gop-unemployment-plan-would-have-70percent-wage-replacement.html

Here are some IRS stats for you:
https://www.irs.gov/statistics/soi-tax-stats-tax-stats-at-a-glance

You are pretty much correct though, top 1% income on individual returns was $480,000. There are about 150mil returns filed a year, so that would be 1,500,000 people making more than $480k, roughly.

One other interesting stat....424,000 people filed returns with income of $1mil or more.

 Mike - no doubt the folks making over $400k worked for that money and I certainly don't advocate giving it all to the government, but just some quick math based on effective tax rates versus the marginal rate of 37% you mentioned.....if a couple is married filing jointly and they had $400k in w2 income and took the standard deduction, their effective federal tax rate would "only" be 22.5%, roughly $90k federal taxes on $400k in income. Not $148,000 if you took 37% of $400k.

Again, not saying i'm for taxes, but I think many people overestimate what they think they pay vs what they actually pay.

One thing to note in all this is Obama also had in his original plans to eliminate 1031 deferrals and he couldn't get it through even when the Democrats controlled the House and the Senate. They may very well when the White House and Senate this November, but that's not an automatic that 1031's are going away. Many Democrats were against the idea last time it came up.

I think many people are wondering how much the government stimulus impacts the current numbers. Everyone got $1,200 and anyone unemployed was getting $600/week extra from the feds.

Once that stops, will the economy come back enough to make up the difference....will we get another round of stimulus????

Lots of questions that impact that data we are currently considering 

I noticed a couple interesting observations in this thread. Seems the two anti-coaching posters in the thread are in California and New York. No offense to those states, but there may be a reason @Eric Johnson and @Kevin K. don't run into any of the coaching groups out there. Every one I've ever seen says DO NOT buy in California or New York because of the anti-owner/tenant friendly nature of the laws in those states.

If you can raise money, qualify for the experience requirement and net worth requirement on the loan, etc, maybe you don't need a mentor. Otherwise, you can't get into the MF game without a team and it seems like a lot of people have done that by joining a mentor program.

I agree with what everyone is saying about keep looking and if you find a deal, pull the trigger. The only question I have is isn't it hard to know if it's a good deal with as much uncertainty as we have right now? The $600 unemployment money runs out this month, still a lot of uncertainty on the economy the rest of the year and maybe beyond.

Any underwriting right now has to have some major guestimates on future rental rates, bad debts, etc and thus way financing is requiring such huge reserves.

It's hard to time any market, stock market or anything else, but it is no coincidence that many of the most successful syndicators out there all started in the last 8 years or so.

This is the answer imo. Billionaire Howard Marks says there are bold investors and there are old investors, but there are no old-bold investors.

Not being overly levered, having proper reserves and stress testing are critical.

I like Ramsey as a person, but his main audience is people who shouldn’t ever have a credit card because they aren’t responsible enough to manage it and not get buried in debt they can’t ever repay. That’s the crowd he caters to.