All Forum Posts by: Lane Kawaoka

There is a group going around that on boards independent sales people (MLM) to sell a heavy fee IUL product. Its probably the one you are referring to. 

IULs really should be used by those who have 2-4M plus net worth because its not a great way to grow you money but diversify your holdings. Most people should start with an IBC using whole life.

Sounds like you need a new cpa. Reach out and I can provide more in detail response.

Our investors setup US LLCs and they don't re-domocile the money back to canada... its their US play money.

SimplePassiveCashflow.com/events

@Tim Murray

Hawaii is a primary markets which are NOT ideal for cashflow investing.

It could appreciate but I consider that gambling. Sophisticated investors invest on cashflow where the rents exceed the mortgage plus expenses (and enough money to pay for professional property manage to do our dirty work). A lot of this concept is explained in the Keynesian Beauty Contest theory where only the top competitors get the most notoriety but the best picks are hidden in the field. So part of the game is staying away from the "dumb" amateur money.

Sophisticated investors look at the Rent-to-Value Ratio and look for at least 1% or more to be able to cashflow after expenses. You find the Rent-to-Value Ratio by taking the monthly rent dividing by the purchase price. For example a $100,000 home that rents for 1,000 a month would have a Rent-to-Value Ratio of 1%. Most people I work with live in primary markets (as opposed to Birmingham, Atlanta, Indianapolis, Kansas City, Memphis, Little Rock, Jacksonville, Ohio, or other secondary or tertiary markets) where the Rent-to-Value Ratios are under 1%. Plus we invest in red states so we have good landlord laws on our side too.

I started with turnkey remote rentals in 2009-2015 while working my engineering W2 job. Then went into syndications once my net worth went over 500k.

Let me know if I can help. 🤙

Cap rates are severely over estimated in most cases from brokers/sellers/syndicators so I don't really pay much attention to it. The reasoning is that to get to that number typically expenses are always left out or income is inflated - so its bad data. Those top of the line items are again always manipulated and can throw the calculated cap +/-2.0. The only true way to determine is to get the trailing 12 month Profit and Loss Statement but at that point you have the information to underwrite it fully. On class B/C I have been using 6.5-7.5% reversion cap depending on market. For example 6.5 in Dallas whereas 7.5 in Gulfport MS.These days nothing is over 7.5% cap (unless its a truly off-market deal and a fringe deal under 60-units). I find the current prevailing caps from my friends who are apartment operators and ping them what they used on their last deal. Another way is to talk to a broker who has their pulse on the market and knows you need the number for underwriting purposes (and he is not selling you a deal).In addition the mear fact that we are doing value add and buying assets that have a management problem (that we can fix) means the property is not performing

what it should be.

We own several apartments in Huntsville and a few other markets. Our best practice is to use 90% of the market value and apply whatever calcs the city/county uses. It is probably much higher than the assessed value but if you are investing in a good area you can bet that the City/County will need to fuel that growth by taxes.

Normal people think in terms of debt and interest rate.

Wealth people don't worry about those... they look at cashflow and impact/growth to net worth.

If you have a good W2 salary (over 100k) focus on that and buy turnkeys to start. Then move to LP deals.

Most people I talk to are enthralled with their own BRRRs because they like the control.

But for most accredited investors its more about time than returns. And when you look at it from a tax standpoint, being an LP is the long term play.