Originally Posted by marcal (Post 3173943)

Read "The Richest Man in Babylon".

Simple timeless investment and finance advice and practices.

Originally Posted by Trip7 (Post 3174269)

Agreed on FOMO. I'd even take it alittle further and say irrational exuberance. Similar to the excitement over the internet in 1999, investors are paying nosebleed prices for EV ideas that have generated little to no revenues while having an A&M style bonfire with cash burn. Some ideas will emerge winners, but majority will fail. Definitely a different investing style(some may call it speculation not investing) that can yield eyewatering(happy or sad), life changing results.

Originally Posted by mispoken (Post 3174203)

i love tegridy’s goals; not stalking ARCOS like the dude that just got his 9th GS has been, is what I seek as well.

This thread is great, but I would hate for it to turn into a “hot stock tip” thread. We all know how that ends. The EV stocks that are being listed are ones I follow as well, and often trade contracts on. Please be advised, these aren’t for the faint of heart and require a very high pain threshold.

Originally Posted by Gunfighter (Post 3174394)

Here is a non "hot stock tip" case study for the Side Hustle crowd. My college age daughter wanted to invest in RE like mom and dad, so I figured the best way to teach her was the hands on approach. I hadn't bought an investment house since new hire days, so this was kind of fun for me too.



We found a 3/2/2 single family house built in 2003 that had foundation problems. It was only suitable for investors as there was NO WAY this house would pass inspection. The After Repair Value (ARV) based on neighborhood comps was $210,000. We purchased the house from a wholesaler for $152,500 using a private money loan. The lender agreed to 75% of ARV for a max loan amount of $157,500 at 8% interest only. We had to be prequalified for a post rehab conventional refi to get the private money loan.



152,500 Purchase

+5,344 Private money closing cost (points, title ins, survey, appraisal, etc.)

+25,000 Repairs (8,000 foundation, 4,500 plumbing, 4,000 flooring, 4,500 paint and drywall, 500 roof repair, 1,000 lighting, 2,500 misc)

-------------

=182,844 invested

-157,500 private money loan

-------------

=25,344 Private money cash to close

+5,825 holding cost (interest, taxes & insurance during rehab)

-5,980 cash back after traditional refi (80% LTV @ 4% for 30 yrs)

--------------

=25,189 total cash out of pocket



210,000 Appraised Value

-168,000 traditional 30 yr loan

-25,189 cash out of pocket

=16,811 equity capture on the rehab



After a 4 months to rehab, rent and refinance the ROI for cash out of pocket was 67% (16,811 gain / 25,189 cash invested)



Here is the ongoing investment:

$1,525 Monthly Rent

-1,214 PITIH (Principal, Interest, Taxes, Insurance & HOA)

------------

= $311 monthly cash flow



Annual cash flow is $3,732 or 15.8% of the amount invested.

-with 1 month vacancy cash flow is $2,207 or 8.7% (neighborhood average is closer to 1/2 month)

-we escrow $1,100 per year in reserves for roof, HVAC and maintenance which eats up 1/3 to 1/2 of the cash flow



Additional aspects to consider:

-Principal reduction on the loan is $3,000 per year, which is an additional 11.9% (3,000 / 25,189) ROI

-Appreciation is expected to be 3% annually ($6,000) in the neighborhood. This is an additional 23.8% return on the cash invested.



Our year 5 target value is $240,000. We have the following three options.

1) Sell for 240,000 - $20,000 closing costs - $152,000 loan payoff = $68,000 (plus a few thousand from cash flow - expenses) That is a 170% gain over 5 years.

2) Refinance with a new loan at 75% LTV = $25,000 cash out PLUS keep the house with $400 monthly cash flow (Rent increases, but so does the loan payment, taxes and insurance)

3) Do nothing and keep the higher cash flow. Assuming rents have increased with inflation, we are now collecting $225 more per month. $1,750 vs $1,525

Originally Posted by Trip7 (Post 3174403)

Very nice write up. Right up there with the best of Bigger Pockets write ups. Some of the comforts of Real Estate investing is there is no one on TV constantly telling you the price of your house every day and chances of your investment going to zero are low

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Originally Posted by mispoken (Post 3174433)

My exposure to RE is investing via private equity. I got hooked up with a dude that finances assisted living facilities in Michigan and Florida. It’s pretty straight forward, for a recapitalization it pays 12% and for a new build it pays 18%. I’m considered an equity shareholder but have zero interaction with any of it other than I wire the funds to the PERE company.

It makes me wonder, for the RE folks out there, what types of returns do you see on an investment property? Is it better than 12-18% on an ANNUALIZED basis?

Originally Posted by buckleyboy (Post 3174493)

Dumb question, but how does one go from SFR to apartments? There are not many apartment complexes near where I live, so I can’t easily find an investment group. But I would like to get out of the single family residence business sooner rather than later.
One property is grossing a little better than 10% ROI (initial). It could be MUCH higher, but I would lose sleep at night raising the rent on an old fixed-income lady who has been there for 14 years...and says she wants to die there. Couldn’t ask for a better tenant, and I am not about to mess with karma.
Another property is managed by someone else and is at 18% return on initial investment, but I bought it because I wanted the land, not the dwelling on it. If I can get 18%+ elsewhere without getting calls from the management company every time crap hits the fan, sign me up! (Then I could raze the dwelling and enjoy the property).

Originally Posted by buckleyboy (Post 3174493)

Dumb question, but how does one go from SFR to apartments? There are not many apartment complexes near where I live, so I can’t easily find an investment group. But I would like to get out of the single family residence business sooner rather than later.

One property is grossing a little better than 10% ROI (initial). It could be MUCH higher, but I would lose sleep at night raising the rent on an old fixed-income lady who has been there for 14 years...and says she wants to die there. Couldn’t ask for a better tenant, and I am not about to mess with karma.

Another property is managed by someone else and is at 18% return on initial investment, but I bought it because I wanted the land, not the dwelling on it. If I can get 18%+ elsewhere without getting calls from the management company every time crap hits the fan, sign me up! (Then I could raze the dwelling and enjoy the property).

Originally Posted by Trip7 (Post 3174312)

Benjamin Graham is somewhere smiling

Originally Posted by TransWorld (Post 3174511)

Benjamin Graham with the Intelligent Investor

Phil Fisher with Common Stocks and Uncommon Profits

Warren Buffett has stated these two books are the foundation of good investing in stocks.

I quite agree.

Originally Posted by TegridyFarms (Post 3174287)

RMG +74% since last Friday.

It’s clear that reading some of these comments, with some of you mentioning revenue and fomo.... you are unclear on what a SPAC is, the stages of a SPAC, and the benefits of a SPAC.

Especially in the EV sector where power is the largest supply chain bottleneck.

What do I know though? For some I guess it’s easier to sit there and call a 36 year old self made millionaire a dumb monkey who throws darts at a board and gets lucky with fomo stocks.

[MENTION=13699]Trip7[/MENTION]. Your most recent post on here about revenue and fomo and blah blah blah is EXACTLY what people were saying about effing NFLX a decade ago. Come on boomer you fly jets for a living. You’re a smart guy. You should be able to look at a market, see a need, find a solution, invest in that solution.

That’s all I am saying, and this will be my last stock “tip” I post on here. Trying to help people out and you get **** on. If you want a “tip” from me you can pay for it just like my subscribers do.

Originally Posted by Trip7 (Post 3174508)

Active or Passive apartment investing?

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Originally Posted by Big E 757 (Post 3174527)

I want a subscription to the Tegrity news letter also. I’m kicking myself for not buying more. I bought 3 Jan 21 $30 calls at $1.95 and they’re worth 8.50 today. I’m up $1965. If I ever have the pleasure of finding out who you are. Dinner and drinks are on me. Maybe a lap dance if we’re in Vegas. I had never heard of this company before.

You are a beautiful human being. Thank you for sharing that with us.

Edit: I wrote this before reading all of your post. If someone said something to upset you, I didn’t pick up on it.

I hope you continue to post here. I have really enjoyed reading your posts, as well as everyone else’s. If you don’t share another tip, that’s fine. And I get it. But please continue to contribute your viewpoints and general outlook and such.

Originally Posted by Big E 757 (Post 3174527)

I hope you continue to post here. I have really enjoyed reading your posts, as well as everyone else’s. If you don’t share another tip, that’s fine. And I get it. But please continue to contribute your viewpoints and general outlook and such.

Originally Posted by buckleyboy (Post 3174553)

Passive. I am trying to reduce headaches in my life and will forfeit returns in trade.



How much capital does that generally require?

Originally Posted by Trip7 (Post 3174607)

There are multiple platforms available that make passive investing in a Real Estate Syndication relatively easy. So far I've used the platform Equity Multiple to source a Syndication in Self Storage. Crowd Street, Real Crowd, and Realty Mogul are other examples of platforms that source deals. The minimum investment varies but I'd expect to have at least 10k ready to deploy. Bigger Pocket's excellent guide is a good starting point for DYOD:

https://www.biggerpockets.com/member...e-syndications

Merry Christmas folks!

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Originally Posted by notEnuf (Post 3174646)

If you want to go passive just find a well managed REIT. For me it was full ownership and self managed, or full passive. No more houses for me. Tenants are a pain, especially now. GSs at $3000+/day are an excellent side hustle. ARCOS has become more reliable than renters.

Originally Posted by Trip7 (Post 3174648)

Private Partnerships/Syndications offer substantially better returns and tax benefits due to direct ownership vs REITS.

REITs work well non accredited investors with smaller sums that are part of a diversified investment portfolio that values liquidity

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Originally Posted by notEnuf (Post 3174649)

Syndications are profitable for the syndicators that structure the agreements not the recruited investors.

Originally Posted by Trip7 (Post 3174651)

That's patently false. Syndication payout structures vary, but most I've looked over an returns capital to the limited partner, plus a guaranteed IRR on that capital, before the Syndicator gets paid.

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Originally Posted by notEnuf (Post 3174654)

Those are all paper agreements that protect the originators. I lost $62,000 when a developer went bankrupt and derailed the project. When it comes to settling the unforeseen, there are lucrative protections built in for the originators. We all lost the Syndicator was made whole with first rights and was free to go on creating new deals.

Originally Posted by Trip7 (Post 3174656)

Sorry you had a deal go South. Your misfortune does not mean you have to write off the entire Syndication business as not profitable for passive investors.

Merry Christmas!

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Originally Posted by notEnuf (Post 3174649)

Syndications are profitable for the syndicators that structure the agreements not the recruited investors.

Originally Posted by Gunfighter (Post 3174670)

​​​​​​There are plenty of great syndicators. Deal terms vary widely and each PPM has different protections for sponsors and investors. I've had good success with a group called Lifestyles Unlimited out of Houston. Don't be afraid of the name, it's not a "lifestyle" group. They have offices in several TX cities as well as a strong presence in other states. The deals are weighted toward the passive investors, with simple fee structures and stabilization requirements before sponsors can raise funds on subsequent deals. Membership is pricey, but well worth it for the networking, deal quality and cost savings on syndication fees.

This may be the most arrogant thing I've said on APC, but here goes. I joined LU after making several million in real estate, because I wanted to network with other millionaires and do large deals with vetted sponsors. It's a humble group of millionaires who openly share their business processes, vendor lists and deal flow. Basic membership is an affordable way to access tons of useful info that is well organized and presented. They will openly admit the info can be found for free if you look for it. The upgraded memberships include more education and access to syndications. I've saved more in sponsor fees due to the deal structures, than I've paid for membership.

*Post loaded with choice-supportive bias and possibly some system justification theory.

Originally Posted by notEnuf (Post 3174661)

My experience was a learning moment. It is in the past. The lesson I have taken from it was that the originator will always protect themselves and are more versed in the deal than any recruited investor. DYODD is always thrown out as the answer. In these cases an attorney is what you need to be diligent. Unless you fully understand divestment language and arbitration protocol of the deal you are uninformed (as I was) about the level of risk. Marketing materials are non binding. If you have a level of capital to consider these agreements you should also have legal council. Be sure to have your representative review the agreement and references cited in the agreement, such as, contractor non fiduciary clauses and originators rights of assignment. I hope this helps anyone considering a syndicated real-estate investment. Learning can be very expensive, I only offer free advice. I sincerely would advise people to avoid "low risk, high return" developments. Low risk may mean there are agreements that guarantee 12+% annual returns but those are often best case. Be sure to evaluate the downside and don't take a promise of returns as a guarantee. Everything works fine when the foreseen happens. It's when the unforeseen rears its head that these agreements are exposed.

Originally Posted by Nantonaku (Post 3174673)

I have been following your posts for years and appreciate the information you have provided. Maybe you have posted about this in the past but I can’t remember, what/where/how do you recommend a beginner starts with this kind of investing? Despite reading numerous real estate books the past 20 years and kicking myself for numerous great deals I have passed up I have yet to put any money into anything other than a REIT. The above source seems more geared toward professional investors instead of someone just starting. Also, just curious, do you do this type of investing because you enjoy working with real estate or because you like putting the deals together or what makes someone good at this?

Originally Posted by Gunfighter (Post 3174704)

Thanks for sharing. There are a couple key points that are worth emphasizing. First, the level of risk associated with a development deal is astronomical. Reaching pro-forma numbers that are tossed about in advertising materials or even a PPM requires near perfect execution in multiple areas. You need site selection, civil engineering, architectural, financial, construction, leasing and management perfection. There are multiple points of interference that can derail the deal from city officials, lenders and contractors. If none of the above collapse the deal, then another developer with more optimism, more cash, more risk tolerance and a lower cost of capital is likely to read the same market data and build a competing project. I've done development and although it was highly profitable, the projects would have failed without financial support from other property in the portfolio. As a stand alone company two of my best investments would have gone down in flames. It took cash flow from existing properties to get them stabilized. Development deals are often under capitalized due to overly optimistic projections by a syndicator that is looking to collect a fee for putting a deal together. The sponsor may not have any of their own money in the deal or possibly only a small amount.



Secondly, the fee structure of a syndication tells you most of what you need to know about the sponsor's motivations. If you see an acquisition fee, refinance fee, construction management fee and disposition fee you know they make a bundle even if there is no profit. When the sponsor only gets paid from the profit with a small override for asset/property management, they have different incentives. The only syndications I've invested in pay the sponsor based on profitability, not deal making activity. The property may not be profitable at acquisition, but if there is existing revenue with a clear path to add value by improving the property and/or the management, I'll invest. The sponsor must be investing at least double the amount I am committing to the project.







It sounds like you are ready, just afraid. I was scared to death buying my first rental property. I had imagined all of the possibilities from eviction to meth lab with fire, flood and lawsuits all scattered in between. At some point, you just pull the trigger and go. The Lifestyles Unlimited group has a simple, straightforward approach for bread and butter rentals. It is boring, basic, vanilla real estate investing, but it works. The entry level program is geared toward a novice single family investor who has never owned rental property. You can find everything they teach for free somewhere else on the internet and they do not hide that fact. You are paying a couple hundred bucks for the packaging and the spoon fed delivery.



You don't get into syndications with a basic membership. It will cost you thousands of dollars to join the group that does those deals. That group consists of two distinct sets of members. There are syndicators who are putting deals together and passive investors who are there for the returns. The syndicators range from experienced single family investors who are moving into multi-family property all the way to experienced sponsors who have done hundreds of millions of dollars per year. The sponsors follow a strict code of conduct that spells out compensation and behavior standards. You must approach a sponsor, they will not approach you to invest. The passive investors are mostly high earning professionals who have money, but not the time or interest for doing their own acquisitions. I've met many doctors, lawyers, engineers, pilots, a day trader, business owners and numerous retired people who moved their IRAs and 401ks into syndications.



I genuinely enjoy putting deals together, but have only done so with personal investment capital. I would lose some of the enjoyment if I had a responsibility for other investors money. Being responsible for bank money doesn't bother me, because there isn't a face or family attached to it. As part of our retirement and estate planning, we are moving capital into passive investments. As much as I enjoy creating passive income, I have other interests like family, travel, fitness and social activities that I want to do. I'm analytical and love playing the game Monopoly. It's also fun to play in real life.

Originally Posted by Gunfighter (Post 3174704)

Thanks for sharing. There are a couple key points that are worth emphasizing. First, the level of risk associated with a development deal is astronomical. Reaching pro-forma numbers that are tossed about in advertising materials or even a PPM requires near perfect execution in multiple areas. You need site selection, civil engineering, architectural, financial, construction, leasing and management perfection. There are multiple points of interference that can derail the deal from city officials, lenders and contractors. If none of the above collapse the deal, then another developer with more optimism, more cash, more risk tolerance and a lower cost of capital is likely to read the same market data and build a competing project. I've done development and although it was highly profitable, the projects would have failed without financial support from other property in the portfolio. As a stand alone company two of my best investments would have gone down in flames. It took cash flow from existing properties to get them stabilized. Development deals are often under capitalized due to overly optimistic projections by a syndicator that is looking to collect a fee for putting a deal together. The sponsor may not have any of their own money in the deal or possibly only a small amount.

Secondly, the fee structure of a syndication tells you most of what you need to know about the sponsor's motivations. If you see an acquisition fee, refinance fee, construction management fee and disposition fee you know they make a bundle even if there is no profit. When the sponsor only gets paid from the profit with a small override for asset/property management, they have different incentives. The only syndications I've invested in pay the sponsor based on profitability, not deal making activity. The property may not be profitable at acquisition, but if there is existing revenue with a clear path to add value by improving the property and/or the management, I'll invest. The sponsor must be investing at least double the amount I am committing to the project.



It sounds like you are ready, just afraid. I was scared to death buying my first rental property. I had imagined all of the possibilities from eviction to meth lab with fire, flood and lawsuits all scattered in between. At some point, you just pull the trigger and go. The Lifestyles Unlimited group has a simple, straightforward approach for bread and butter rentals. It is boring, basic, vanilla real estate investing, but it works. The entry level program is geared toward a novice single family investor who has never owned rental property. You can find everything they teach for free somewhere else on the internet and they do not hide that fact. You are paying a couple hundred bucks for the packaging and the spoon fed delivery.

You don't get into syndications with a basic membership. It will cost you thousands of dollars to join the group that does those deals. That group consists of two distinct sets of members. There are syndicators who are putting deals together and passive investors who are there for the returns. The syndicators range from experienced single family investors who are moving into multi-family property all the way to experienced sponsors who have done hundreds of millions of dollars per year. The sponsors follow a strict code of conduct that spells out compensation and behavior standards. You must approach a sponsor, they will not approach you to invest. The passive investors are mostly high earning professionals who have money, but not the time or interest for doing their own acquisitions. I've met many doctors, lawyers, engineers, pilots, a day trader, business owners and numerous retired people who moved their IRAs and 401ks into syndications.

I genuinely enjoy putting deals together, but have only done so with personal investment capital. I would lose some of the enjoyment if I had a responsibility for other investors money. Being responsible for bank money doesn't bother me, because there isn't a face or family attached to it. As part of our retirement and estate planning, we are moving capital into passive investments. As much as I enjoy creating passive income, I have other interests like family, travel, fitness and social activities that I want to do. I'm analytical and love playing the game Monopoly. It's also fun to play in real life.

Originally Posted by tripled (Post 3174891)

Can anyone recommend another forum like this one except the topics are financial discussions rather than aviation- related? I saw fool.com has them behind a paywall.Thanks.

Originally Posted by Trip7 (Post 3174713)

There's a lot to be said about Analysis Paralysis but dare I say it right now is a good time to be stuck in that phase. The real estate crash in 2008/2009 provided a once in a lifetime to purchase investment property with a substantial margin of safety. For those that were "lucky"(When Opportunity meets Preparation) enough purchase during the downturn, substantial wealth was built.

Originally Posted by tripled (Post 3174891)

Can anyone recommend another forum like this one except the topics are financial discussions rather than aviation- related? I saw fool.com has them behind a paywall.Thanks.

Originally Posted by 123494 (Post 3174892)

I like Bogleheads.org

Originally Posted by mispoken (Post 3174916)

the forums behind the fool paywall are excellent, I learned more there than the analysis themselves. If you want to talk indexing, budgeting etc, bogelheads is great. Individual equities, Fool is the place to be!

Originally Posted by 123494 (Post 3174921)

Shifting gears from stock picks for second. Does anyone have any recommendations for part time jobs while still flying a full schedule?

I'm flying a fair amount, but not nearly as much as last year. I am thinking of working another job for 2-3 days a week (other than Lyft/Uber/DoorDash). I have a small business, but I do it exclusively on a laptop during my overnights so I don't go crazy sitting in a hotel room.

Anyone finding any places that are reasonably accommodating to our schedules?

Originally Posted by 123494 (Post 3174921)

Shifting gears from stock picks for second. Does anyone have any recommendations for part time jobs while still flying a full schedule?

I'm flying a fair amount, but not nearly as much as last year. I am thinking of working another job for 2-3 days a week (other than Lyft/Uber/DoorDash). I have a small business, but I do it exclusively on a laptop during my overnights so I don't go crazy sitting in a hotel room.

Anyone finding any places that are reasonably accommodating to our schedules?

Originally Posted by tripled (Post 3174972)

appreciate the inputs and the second. I’m Still too cheap to pay for what amounts to reading entertainment- for now. Out of curiosity, is fool a source that validated some of your stock recommendations posted previously - they were rather prescient.