All Forum Posts by: Steve Hall

If anyway reading this post is considering using Corporate Direct, read this post first...

@Account Closed

Troll

@Kelly Nolan It's worth considering that we are now 10+ years into an appreciated housing market. $1.5m can buy one house in the bay area, or it can buy a 34 unit apartment complex in Oklahoma City. When the market turns downward and both lose 30%, which one would you rather own?

Regardless of the downturn, one is a huge liability that costs you tens of thousands year, and the other is an asset that brings in passive income of $100k or more per year.

Remember that this is an investing web site, so the only answers you're going to get here are ones that make financial sense. If you "love" the home, and make decisions based on your emotions, you're not going to like the advice you receive here.

@Kelly Nolan Welcome to BP. I assume "bay area" means San Francisco bay based on the prices you are throwing around. I think you are de-sensitized to the hype of what is going on there, probably because you've lived there for so long. Why on Earth would you want a monthly mortgage of $7,500? That's all liability! You could put that into an income producing asset that generates $100,000 or more per year, net.

With $1.55 million you could buy a 40+ unit complex. If you don't know how to run it, partner with someone. If you each throw in $300k you could own a 80+ unit apartment complex.

You're stuck in a rat race and you can't even see over the walls...

@Adi HabibLife is about more than your FICO score. Do you have a good job? How long have you been employed? What is your DTI ratio? Will anyone co-sign for you?

First thing I suggest you do (today) is get a secured credit card. Make sure there are no fees. Don't worry about the interest rate. Charge it only to about 50% of capacity before paying it off completely. (You can charge it up to 50% as many times as you want - just always pay it off when it gets that full.) Do this for 6 months and then request your security back. Soon you will get credit card applications. Open 2 or 3 credit cards and ALWAYS pay off the balance every month, and never be late. In one year you will have a better credit score than most Americans.

I admire your ambition....

Umm... this is a rental. It's not about what "look" you like!

@Sami Gren 

1) PM fees vary. As you said anything between 5% and 12% is common. It is for you and your partner to work out the rate. It sounds like you just want us to pick a rate for you so you can tell your friend what someone else says the going rate is. Ok then, tell them Steve said it's 10%. (I like 10% because I can do the math in head easily.)

2) Why are you managing SEVERAL apartment buildings? How many units are we talking here? Do you just not like property management companies? Do you have control issues? Do you not want to scale up? Or perhaps your cash flow can't support the extra 10% expense?

3) You brought in your friend because you think that's what "good friends" do? Bad business decision. Bad friendship decision. Did you ask any of your advisors when you made that decision?

@Brian Lepo Sounds like you're overthinking it to me. You just overpay the mortgage and any overage is applied to the principal balance.  All this does it shorten the number of months remaining, it does not change your next payment amount. Your lender will keep track of the numbers, and your next statement will reflect the new, lower principal balance.

If you want to see the numbers yourself, you can use online mortgage calculators that support extra payments like this one or this one to see what you would save in interest.

Be careful not to put too much into the loan though. You should always have a minimum of 6-9 months liquid reserves.

I know quite a few accredited investors that are not qualified to invest. I would not trust them with my money! 

I determine an investor's qualifications based upon my own "intimate knowledge" of their financial intelligence, not whether they meet some government imposed qualification standard of their abilities. Usually only takes a few minutes!

There are ways to easily avoid breaking SEC rules when you understand them.

Welcome to BP @Dave Fulkerson

Wow! Great story, and very inspiring. 2010 was a great time to invest. I picked up a foreclosure house in 2011 and sold it for more than double in 2018.