All Forum Posts by: Alex W

Just to add to Tim's suggestion of The Art of the Deal by Trump, check out Trump Style Negotiation by George Ross. Many of you know him from the Apprentice. He is Trump's attorney and discusses most of the deals mentioned in The Art of the deal.

Ram,

I used to be in the hi-tech industry too. I guess that's what happens when you live in the Bay Area.

I hear what you're saying. I agree with Cummins on the advantages of being licensed. But it's not that hard to access comps/MLS from other people. You can even go to websites like ziprealty.com or trulia.com. Or they have several software packages out there that give you access to property profiles, comps, etc. I think the pros of not having a license outweigh the cons. Especially since this is only part-time. I'm sure you have friends/family that are RE agents who can give you access to the MLS.

At the end of the day, do what you think is best for you. We can only chime in based on our personal experience and preference.

Just keep us posted and make sure you stay on it.

Good luck!

Alex

Hey Ram,

Good to see another Bay Area investor here. I was actually a loan officer and residential Realtor for a year. My goal at the time was to surround myself in the industry so that I can learn and basically live and breathe RE. I was already investing at the time.

To be honest, what I learned being an LO and Realtor were things you shouldn't do rather than things you should be doing. No offense to RE professionals, but I discovered 95% of the "professionals" out there don't know jack about the industry.

As a Realtor with an investor mindset, I found myself frustrated dealing with people looking for homes. Since majority of them make emotional decisions rather than more logical ones. I had to save people from themselves all the time as they want to buy homes they can't afford, or they want to be in contract for a new home w/o selling their old homes first, since in their world their house is the best on the block and it will sell instantly. They would rather get a Neg-am loan to be able to afford homes out of their price range. Since I don't fall inlove with my investments, the whole experience frustrated me. Hence I quit being an agent and focused on REI full tme.

I'm actually waiting for my license to expire. Sometimes having one is a disadvantage as you are subject to a higher code of ethics being a licensee. There is more liability I think. Plus there is always the conflict of interest card people can pull on you. A lot of investors do unconventional deals, and having a license can bite you in the you know what.

If I understand your post correctly, you plan to be a part time agent right? If that is the case then I would rather pass on the license and just focus on learning REI. Also what type of investing do you see yourself doing? Residential (SFR, 1-4 units)? Commercial (apartment complexes, NNN properties)?

If you plan to focus on SFRs then might as well get your license, but if you like commercial, I would either network with investors, or work for one of the commercial firms. You could be an analyst for them w/o needing a license.

Hope this helps...

100% Spot on!

Ned, are you talking about CA or all states? As far as my entities are concerned, I still have all the advanatges of the WY entity (ie. privacy, asset protection, tax savings, etc.) since the WY entity is the owner of all the LLCs that hold my properties which are setup where the properties are located. I have a CA S corp which manages all the holdings of the "main" WY LLC. I save on franchise taxes since the entities are out of CA, and the S Corp is only subject to self employment/FICA tax.

In this scenario, when someone sues in one of the properties, the owner of the LLC holding the property is the WY LLC, which has strong asset protection laws and privacy is still in place. Plus the WY LLC is already the secondary layer beyond the actual LLC holding the property. My S Corp is totally separate from any of the LLCs and only manages them.

The reason I went with Wyoming is due to cost. I could have done the same thing in NV.

Bottom line: having the CA S corp as manager does not require me to register the NV or WY entity in my home state, which in turn does not take away the benefits of incorporating there. It's not doing business in my home state.

I would also like to make sure people know I am not an attorney and my post is only based on my own personal experience. Please consult qualified professionals. This is not a one size fits all solution.

Very interesting... Care to elaborate on this? I'm curious why all this incorporatng in NV is garbage.

I'm trying to put together some entities and would like to get more feedback on why this is so. I'm a resident of CA and based on my understanding there are advantages incorporating in NV, WY or Delaware. I have rental properties in different states and have applied different entity structuring for asset protection and tax strategies.

As most of you know majority of publicly traded corporations and Fortune 500 companies are incorporated in Delaware due to it's asset protection and tax friendly laws. NV and Wyoming laws are similar to Delaware's. So if these companies do this, how come you say incorporating in NV or any similar state is garbage? What am I missing?

I've been involved in several hi-tech start ups here in the Bay Area and have friends who are VC's and Angel investors, and majority have set up shop in the states I mentioned for the reasons above. Regardless if it's technology, real estate, manufacturing, etc.

Please elaborate on this as I want to know if I've been wasting my money incorporating in other states.

Thanks,
Alex

In commercial RE, you typically use annual figures when running the numbers. Plus most of the time commercial props have multi-year leases anyway. So you can use the previous year's figures to determine actual value based on income/cap rates.

As for apartment complexes, since you mostly see 1 year leases then you can either value the property based on actual figures or pro forma figures.

You also have to remember if you invest in an area where there is growth/demand, then the cap rates tend to go down hence raising the value of your property.

Can anyone else chime in on this?

According to my Commercial Broker Loopnet significantly increased their fees and a lot of people in the industry are pulling out. So it remains to be seen if Loopnet will still be a good resource in the future.

I posted this on another thread and wanted to put it on this one too...

Just my 2 cents...

I've actually tried a bit of everything mentioned on this thread. Books, boot camps, mentors, seminars, internet forums.

Like anything in life, I ask people who are experts in their field for advice then decide for myself which ones I will use in the end. I apply the same practice in BP. We are all here because we love REI, but we don't know each other personally. So I have to qualify the tips, tricks, advice I get from this site and decide if it is something I would do or not.

This is how I look at books, boot camps, mentors, seminars, etc. I take what I want then apply it the way I want to. It's hard for me to agree with others who say these are "scams" or a waste of money. Since I've tried most of them, I can say that I have always picked up something new. Which helped me in my RE ventures, and I think is worth the price of admission. Regardless if it's $20 for a book or $10K for a mentor program. So far it has worked for me.

In the end, I ended up with more knowledge than I started with.

The negative thing I have about REIAs is that a lot of attendees are beginners who claim to know more than they actually do. It's also harder to qualify the legit investors from the posers.

That's why I've avoided the REIAs and focused more on organizations that are not REI related.

I join charitable orgs, the local Rotary club and similar orgs, and go to places where movers and shakers hang out/dine. Most of the people that you meet in these orgs/places are attorneys, developers, investors, bankers, politicians, doctors, business owners, etc.

For me this has been more effective because you broaden your network. Eventhough you don't meet the specific people you are looking for (REIs), you meet people who know people you are looking for. Plus this weeds out the men from the boys. In fact you end up meeting powerful and influencial people who I think are better contacts than the ones you will meet in REIAs. This strategy has accelerated and opened WAY more opportunities for me in my REI career.

I'm sure you guys know about the 90/10 rule. How many of you have seen the big boys who belong in the 10% go to REIA meets? I'm not knocking on REIA meets, but I am just stating the facts. Rich people like to help each other. It's kinda like a "secret society". These people won't tell you where they're investing unless you're an insider. If you want to learn and find a mentor, might as well aim high and be mentored by the big guys.

In conclusion, I agree and disagree with a lot of the points that were brought up on this thread.

My advice is do whatever you feel that is right for you. Some people learn by reading, some by going to seminars or by being mentored. In the end you will be better off than you were before doing any of these methods.

Good luck!

Alex

I would even try negotiating with the assessor's office directly. You can do a compromise with them. Maybe structure it by lowering the taxes for a certain period of time till you sell the property to someone else.