All Forum Posts by: Loc R.

So through a connection, I'm having dinner next Wednesday with the SEVP/CCO (Chief Credit Officer) of a local bank. I'm getting my questions ready, but was wondering if BP Nation had some questions that I could add to the conversation.

There are a lot of missing numbers in the equation...

Private loan:

$40,000 at ___% interest over ___ months for a $551 monthly payment

Small loan:

$10,000 at __% interest over ___ months for a ___ monthly payment

vs.

Income of the property (now) and potential income

A friend of mine accidentally got into renting timeshares...he bought his timeshare in 2003 in a premium spot. Due to work, life, etc. he ended up renting it out in 2005, 06...when the markets crashed he saw a bunch of people essentially giving away their timeshares at the same location, so he bought them at rock bottom prices.

He can sell his "premium" weeks for $4000-5000 each, with annual fees and taxes ranging in the $900-1200 range. He paid, on average, $9500 for each one.

If I were given $1.5M in cash and was 50+ and needed to preserve my cash flow, I would do what I know best. In your case, it's (out of state) rentals.

Cash is king in this market, so I'd look for distressed sellers of income property; perhaps someone with a portfolio of rental SFRs or MFRs. Or you could sit on your cash and buy distressed rentals one at a time - it depends on what the typical price point of each rental unit costs you.

Mike, first off, my condolences. Sounds like you've been through a lot over the last few years.

Your "better opportunities" that you speak of: do they require liquidity (i.e., do you need to cash out these particular properties)?

If I remember correctly, you did quite well as a long distance landlord.

The more motivated a seller is, the more likely they'll seller finance. Find the motivated sellers.

How do I give this story a thumbs up?

Typically balloons are a foreclosure waiting to happen. At least that's how I approach them.

The downside to seller financing a property is that the note/income is finite, meaning it will one day run out.

With rental property, as long as you keep the property desirable for its market, the income still comes in.

Notes = great return.

Rentals = wealth.

I own a physical therapy practice and am working on continuing to grow it.

In the past I have done local landlording and long-distance landlording. I will never do long-distance landlording again.

I have also done some HML, but my primary form of investing now is buying (discounted) promissory notes secured by real estate and businesses. It's what I understand inside and out and it's what I'm comfortable with given my time constraints. I started out in real estate notes only but I've somehow come across (good) business notes in the last 2 years that I couldn't turn down.

I will do local long-term holds if the returns make sense. There's no need for me to go through the troubles of landlording to make less than 9% when I can easily make double-digit yields in paper.

Banks don't lend on fixer-uppers; HMLs do.

HMLs understand what the ARV should be and normally cap at 65% of that number.