All Forum Posts by: G. Brian Davis

@Himanshu Das

Are you sure you want to actively buy properties long-distance, rather than investing passively? Owning rental properties is hard enough when they're local. I used to own dozens of properties, and it was a pain in the rear. 

Today I own a fractional interest in over 2,000 units, spread all across the U.S. And I don't have to do anything with any of them, they're all passive investments. The beauty of diversification is you don't have to perfectly predict one single market or property type, you get exposure to many. My crystal ball is no clearer than anyone else's, which is why I've spread $5K here and $5K there among many different multifamily properties, mobile home parks, hotels and Airbnbs, retail, etc. properties in dozens of markets. 

Look into passively investing as a member of a real estate investment club, to crowdsource both the money (to hit the high minimums) and the knowledge in vetting deals. 

And if you really want to buy properties directly, I would just urge you to avoid cities and states with tenant-friendly regulations. They make your life a nightmare as an investor. Take it from someone who used to invest in such a market. 

@Grozie Thomas

I would echo @Jonathan Nichols and @Michael Margarella on house hacking a small multifamily if you want to get into active investing. It's great experience, and of course you eliminate your housing payment if you do it right. Alternatively, you can house hack with housemates or an ADU.

But it's worth noting that you don't necessarily need a ton of money to invest passively in real estate syndications. If you go in on syndication deals with others as a member of a real estate investment club, you can invest with relatively small amounts. For example, in our Co-Investing Club we meet once or twice a month to vet deals, and members can go in on them together with $5K apiece. 

Personally, I no longer buy properties directly. I spread small amounts of money across many passive investing deals. You get all the benefits of real estate (cash flow, appreciation, tax benefits) without any of the headaches of landlording or asset management. 

I fell into a job out of college working as a loan officer for a hard money lender. This was back in 2003, and over the next few years I saw all these guys making money hand over fist in real estate. I went on a buying spree, overpaid, and lost my shirt in 2008. 

The things I would tell my younger self could fill a book. 

Part of me wishes I'd discovered passive real estate investing earlier, but the truth is today's regulations allowing non-accredited investors didn't exist yet at that point. It's a lot easier to invest today if you learn the basics of investing as an limited partner in syndication deals, especially if you invest as a member of an investment club. 

@Eric Lowe

There's a company called Rental Property Refund that does cost segregation studies virtually, based on self-reported data from you. I think they charge around $1,500. 

I no longer invest in rental properties directly, I prefer spreading small amounts ($5K) in real estate syndications through an investment club, but we did a write-up on this company a little while back. Worth checking out for SFRs.

@Mike Volkin 

When I first got into real estate, I bought low-end BRRRR deals. After going on a buying spree of over a dozen properties, I realized (the hard way) just how many expensive mistakes I'd made, and discovered I'd saddled myself with a lot of liabilities rather than assets. Those properties were niched down in specific neighborhoods in one city.

Active investors do need a niche, because it's so competitive. But it can be expensive and time consuming to find the right one, and you often leave yourself overinvested in a single market or asset type. 

Today I only invest passively. I invest $5-10K per deal in passive real estate syndications (which you can do as a member of an investment club, and the precise reason we launched our Co-Investing Club). Investing small amounts passively lets me spread my money far and wide, investing with syndicators who each have a deep niche, but it doesn't pigeonhole me into one niche. 

So, I get exposure to a lot of different markets, property types, and niches, without having to become an expert in any one niche myself. And it's easier - I just wire in the funds each month. I wish I'd invested this way from the beginning, rather than spinning my wheels so hard with active investing. 

One alternative to buying an entire storage facility yourself is spreading smaller amounts among many different private equity storage facilities. Reliant, Spartan, Nomad, Hearthfire, and Belrose are all reputable real estate syndicators operating in the self-storage space. They also bring an economy of scale with them. 

We sometimes look at storage syndication deals in our Co-Investing Club. That lets you invest with even less per property, $5K instead of the typical $50-100K minimum investment for a syndication deal. 

And, of course, syndications are completely passive investments. If you invest with a syndicator, they take on all the headaches of lining up financing, hassling with contractors, property management, etc. That leaves you free to keep on living your life. 

Some investors love managing properties themselves, but personally I no longer invest actively. I only invest passively in real estate at this point, and I'm a lot happier for it. 

There are plenty of ways to invest relatively small amounts in real estate. 

On the passive investing side, you can invest in crowdfunding platforms (Groundfloor is my favorite, but Arrived, Ark7, and Fundrise are all worth checking out as well). Better yet, invest passively in private equity real estate syndications. Those are a lot of fancy words to say group real estate investments, where you own a small piece of a big apartment complex or other large property. That's what we do in our investment club: we vet new real estate syndications deals each month, and anyone who wants to participate can do so with $5K. Most syndication deals target annualized returns in the 15-30% range.

Another option is to do a joint venture deal with an experienced investor. You don't necessarily need much if any money, if you provide the deal and do some gopher work. You negotiate the terms with your partner. 

In my 20s, I bought a bunch of rental properties. I spent the rest of my 20s and my 30s hating every second of being a landlord. Today I only invest passively, and let professional asset managers do the work of finding deals, hassling with contractors and tenants, etc. 

You might think about partnering with an experienced sponsor for your first deal or two. It lends credibility to help you raise funds, and they can connect you with the right attorney and other professionals you'll need. And, of course, they'll help you avoid expensive mistakes. 

In our Co-Investing Club, we don't invest with novice sponsors. But with an experienced sponsor on the deal, people like me would suddenly start considering it. 

Plus, they'll probably be able to help you raise funds with their own existing network. 

Just an idea!

Heard investors talk about real estate syndications, but not sure what the heck they’re all about?

Or maybe you’ve heard that only accredited investors can participate in them (false), or that the minimum investment is $50-100K (false).

In a free 1 hour class, we’ll walk you through:

• How real estate syndications work
• Advantages of syndication investing such as 15-50% returns and completely passive investing
• Challenges of syndication investing such as finding reputable syndicators that allow non-accredited investors
• How to overcome those challenges, including a loophole letting you invest with $5,000 instead of the typical $50-100K.
• Tax benefits of syndications, including paper losses even as you collect distributions
• “Infinite returns”: How to invest in syndications that work similar to BRRRR deals, where you get most or all of your capital back even as you keep your ownership interest.

Reserve a seat for the class, and bring your questions!

Brian & Deni

We’re real estate investors ourselves, and have vetted several long-term rental mortgages and short-term fix-and-flip loans.

To help you find the perfect financing, we created the following charts:

· long-term landlord loans
· short-term purchase-rehab loans
· rotating credit lines
· commercial loans

Check out the lender comparison charts here, for terms like LTV, interest rates, loan amounts, closing speed, points and closing costs, and more.

Let us know your feedback if you use one of these lenders, we’re always looking to hear about your experiences!

Best,
Brian