All Forum Posts by: Alex W

Looks like this thread could fall under investor psychology soon! hehe!

Hey I'm glad I can help! Yes I think the Bay Area in particluar has a lot of resources. Lot's of truely wealthy/experienced people with different backgrounds. In fact majority of the people I spend my time with are not even in the REI industry. Mostly tech, finance and VC industries. I think I'm also the youngest in our Rotary club in SF. The average age gap between myself and majority of the members is 30 years. I am fortunate to be able to learn from truely successful people with really impressive credentials.

These people have been successful and have made their money already. Last thing on their mind is to steal my idea. I'm in the beginning of my career while they're closer to the end of theirs. They are more than willing to help an up and coming investor become successful too. The best thing is it's for free! Plus you do charity work in the process. Talk about a win-win huh?

Right on! HAHA!

Exactly! That's why I'm capitalizing on it! :D

Welcome to BP!

Tim,

As I said, I know where you're coming from in regards to keeping things to yourself. I guess what I was saying is you don't need to give specifics. As for the REIA climate in Chicago, I think this applies to most REIAs out there. This is why I don't participate in them. Majority of the people there are newbies or speculators you speak of that once they find out the next "hot spot" they tend to ruin it for the real investors.

This is why I go to my local Rotary club to network and learn from true investors may it be in REI or another industry. In the end REI is pretty much any other business. It's got income and expenses, supply and demand, cashflow. I actually use more principles from successful people outside of REI to run my REI business. So far it's worked for me.

I appreciate your contributions here and have picked up a few things here and there from you. As long as I'm learning...it's all good!

Very interesting discussion here. Everyone has made some good points. This is exactly what I was talking about in one of my posts regarding education, gurus, boot camps, mentors, seminars, etc.

I've read several of Tim's posts and I think he is knowledgeable in REI, but I am curious about the secrecy aspect. It creates too many questions about your actual background. This thread confirms what I've been saying about taking what you think will work for you (personally) rather than following everything "experienced" REIs tell you. May it be in BP, REIA meetings or other REI sources.

What ever happened to full disclosure? Oh yeah, I forgot an NDA was signed. I've been involved in different start ups (hi-tech) here in the Bay Area and have had to sign NDAs for obvious reasons. I'm just not sure how much secrecy there needs to be in REI? I mean I know where you're coming from in regards to keeping your investment strategy to yourself. Or where you are investing, but you don't have to give us specific areas, why not give us the states where you invest? I mean all RE is local anyway and one city is different from the other even in the same state. So sure I can say I invest in CA, TX, NM, WY, CO or whatever. But I won't say where in particular. Can't you even give us that? Did you sign an NDA with yourself hence you're not able to disclose where you've personally invested?

Just curious...

All Cash,

My comments were intentionally broad as I am not a CPA nor an attorney and was only giving some "food for thought" scenarios to bring up with the respective experts. Thanks for getting into more detail as this is very helpful.

Cheers!

First question is what type of income do you have? I'm assuming earned income (salary) since you are paying too much taxes. If that is the case I'm not sure how you can have "tax savings" by loaning money to an LLC to invest in RE. That means you will be lending after tax $$.

I could think of 2 possible scenarios that can save on taxes if you are earning a salary.

1. Instead of lending money to an LLC, why not just use that money as a down payment to buy rental property held by your LLC? The income you receive will be considered passive income and is taxed lower. Hence you save on taxes. Then repeat the process and buy more rental properties. Next thing you know you don't have to work because all your income is coming from your passive investments. Typically LLCs are flow through entities anyway and its income flows through to you as the member.

2. Second scenario is to maximize your pre-tax contributions to your retirement plan, and self direct it so you can invest in RE with your pre-tax $$ through your retirement plan. The more you put into your retirement plan, the less taxable income you will have, hence you pay lower taxes. The only thing is you won't have easy access to profits unless you pay the penalty for early withdrawal. There are ways around this for sure. Make sure you consult an expert in this matter.

Lastly, you should consult experts (ie. CPA, attorneys) regarding the things I mentioned above.

It's just something to chew on which you can bring up with the right people.

Good luck!

I would fix up your duplex and see if you can buy the rest (cheap) and fix them up too. Maybe because the owners don't want to spend on up keep due to long time tenants with low rents. As you said they are owned by long time owners. Some of those people are old school and just like holding onto property with long term tenants who don't complain about deferred maintenance as long as they can pay cheap rents.

This could be a good opportunity for you to buy the other properties and improve them all. Why not pioneer the transformation of the particluar area? You got nothing to lose...