All Forum Posts by: Shafi Noss

A framework I've found useful is The Real Estate Development Matrix developed by Lawrence Kohlhepp, who is a real estate professor at Johns Hopkins. 

He calls the process you describe land packaging, which consists of paper improvements such as city approvals, engineering, architecturals, and a more clearly defined vision of the future use fo the property. 

The next stage in the matrix is called land development which consists of horizontal physical improvements like grading soil, installing wet and dry utilities, street improvements and flatwork (pouring streets and sidewalk, etc.). 

Sometimes one or both of these are called land development. Investors do not have well defined language for this, so what it's called depends on who you're talking to. 

But paper improvements and horizontal improvements require different skillsets, and have different risk profiles. You'll make clearer decisions distinguishing them as separate steps in your mind.

I may have some resources if you'd like to connect off the forums. 

I have had a reasonably good experience with Clickup.

You might consider pulling funds out with a bridge loan, would be a shame to lock in a 30yr fixed rates while rates are so high. Then refinance when the rate pressure comes off. 

My partner is a professional KP. Feel free to reach out and I can potentially make an introduction. 

You might consider a cross-collateral loan. 

Here is an intuitive way to think of IRR:

When investing, you initially lose some cash, then you get a series of payments, often with a big final payment when your principal is returned. 

Now imagine that instead of investing you put that money into a bank account that paid you x% compound interest. What would x have to be so that you could withdraw the same amount from the bank account each year as you would have gotten paid on the investment? That's the IRR.

Personally I think it's a low quality metric for real estate. IRR assumes that any payouts are reinvested at the IRR, which is not realistic. This especially messes things up if there is an early refinance, which is common on apartment syndications. MIRR is a better metric that solves that problem. 

My preferred metric is CAGR (Compound Annualized Gross Return), to measure returns, and cashflow, to measure how much of those returns are liquid. 

A great resource is Frank Gallinelli's book, What Every Investor Needs to Know about Cash Flow (And 36 Other Key Invesment Measures. I recommend it. 

 Credit Karma is usually accurate for checking your FICO 8 score, but real estate and auto lenders will often check your FICO 5 score, which is similar but less forgiving of certain missed payments. 

So it will sometimes look like Credit Karma overestimates your score. Googling FICO 5 can shed some light on the details. 

 I was curious which company sponsored you, but you don't have to share if you don't want to. 

In Texas the usury rate is 18%. If your interest is higher, that is probably why your lawyer said it wasn't legal to draft the docs. 

If you want to skirt around that your lender may be able to charge you legal, admin, or advisory fees. That would be in a gray area though so you should discuss with your attorney about whether that would actually work. 

@Taylor L. Did you need to find sponsorship for your series 7?