Forum Replies Created
I have sent you a PM, NHG.
(LOL; now I feel lke I mst go 2 txt mode – but I'm not text savvy enough 2 do it!)
Hey Liv .. yeah forums are a great source of info and leads.
Ok… well, two things worth thinking about… one is capital gains tax, which is very high, so don't forget if you are going to buy and sell (which is really trading), then you have to take into account the dint that tax will make.
The second is, what exactly are you going to do to value add? In other words, what part of the development process are you going to specialise in, get to know well, to make your money. You mentioned subdivision – that is one part. I just met a guy a couple of weeks ago who subdivides large blocks and builds townhouses which retail for around $700k each…
You also mentioned about borrowing power and buying multiple houses… well, if you are trading, that is not such a problem … you buy, you sell. But if you are buying for cashflow, that is a different matter, and as such you wouldn't be trading.
There is a bit of anecdotal evidence to say that after you have a few properties (usually more like 5-10), that banks start getting a bit edgy about loaning more, even if they are cashflow positive. This seems weird to me, but apparently some people have encountered it. So this is where you either get creative (not sure if it was Steve McKnight or another investor I remember saying they went to the bank with a business plan for 14 houses, and got financed for 8 or something, rather than one at a time), or find private money, which is around… or do a Robert Kiyosaki and "trade 4 red houses for a green hotel" … in other words, sell a few houses, and buy a larger property – apartments, commercial space, whatever. Obviously you will still have to factor in capital gains tax.
I hope that gets you thinking
The interest on your own home is not tax deductible … the interest on investment is. Paying off your own home will save you interest that has no benefits.
If you can get cashflowing investments that pay a higher cash-on-cash return than the interest on your home … then it starts to get interesting
Hi Liv … we met on my other thread
I would say, as Ryan suggested, get a little clearer on your goals. Then these sorts of questions become easier to answer.
For example, my aim is to become financially "secure" in the next three years. I have defined what that meant for me … car value, house value, clothes, living, holidays .. etc. And put a monetary value on each. And then I knew what amount of money I needed to be "secure" and so then I could work out which investments and so on I should be looking at over the next three years … and how many of them. Now I know, I have been able to make a plan to achieve it.
Nothing so motivating as knowing where you are going
No worries Olivia, will email.
Slowly coming together
Yes, Australians, be very very cautious.
There are ways of buying without going to the states … ring a property management company and say you are considering purchasing, will need a property management company, and ask them to check out the property, taking photos.
If you go ahead and sign a contract, make sure it is pending due diligence – then get a building inspector to go through the house, also taking properties.
Get the pest company to take photos.
Get everyone to take photos.
Then you have multiple photos from different people at different times, preferably not people who know each other or are recommended by the sellers. Ken McElroy (Rich Dad Advisor) would tell you, trust … but verify
Hi Corey (like the "no the relation to"
and Matt – I will PM and email respectively Martha
No problems, Mick. I will add you onto my email list.
Martha
Hi Mick
The structure of the LLCs will vary from opportunity to opportunity, and likewise the number of shares on offer, and purchasing more than one share will not be a problem. Investment per share will also vary according to opportunity. It is likely that the offer will be made to "Accredited Investors" as defined by the USA SEC.
I anticipate that in most cases the LLCs will be incorporated in either Nevada or Wyoming, and then qualify for business in whichever state the acquisition is made if it is outside the state of incorporation.
I know that these are very vague answers to your questions, and I apologise if you are wanting more detail. I am being very careful as I do not want to breach any SEC rulings about soliciting investments, and making comments that could be seen as guaranteeing or specifying returns, etc. At present I am concentrating on building a buyer list, so that when I have an opportunity, we are able to move quickly, as there are opportunities waiting, if I had the capital ready. If you want to ask more specific questions privately, please PM me and I will do what I can.
As for the type of investments and the idea of purchasing distressed properties as CheevesFinancial mentions, I am not as interested in the more distressed properties at the moment, as Cheeves seems to be. Obviously I am looking for great deals, and a certain amount of distress in a property often makes a good deal become a great one. However, I am not looking at extreme capital improvements that are necessary in order to achieve cashflow. I want cashflow from day one. If there are some non-essential improvements that can be done to improve cashflow, then great. If there are a few little essential improvements that are needed, then I will consider it. But I am not wanting (at this stage) to completely rehab a complex. I will leave those ones to Cheeves for now
Obviously, that means that the investments I am targeting may not achieve significant capital growth. Let me say it again. I am after cashflow, and at a rate better than what the bank gives me.
and Matt – I will PM and email respectively 
