" Nest egg " sitting earning next to nothing, What would you do ?

Me too. Can't stand just parking money at the bank. Does nothing for you. I just put in an offer for an apartment complex w/ a good 10% cap return. Hopefully they'll accept my offer. RE is a solid investment.

 

wow that's a great return, how is the capital gain for that area?

 

Good luck, I hope you will get it.

wow that's a great return, how is the capital gain for that area?

 

Good luck, I hope you will get it.

 

Thank you Fortis! It's a class C, so I'm not banking too much on the capital gain. Just a nice steady passive income will suffice.

Buy big oil when the price hits $25/bbl.

Thank you Fortis! It's a class C, so I'm not banking too much on the capital gain. Just a nice steady passive income will suffice.

 

When it drips steadily it's all good, good luck once again!

Thank you Fortis! It's a class C, so I'm not banking too much on the capital gain. Just a nice steady passive income will suffice.

 

Where are you seeing 10% caps? I'm looking at Class C a hair north of 8% in the Denver metro, but I'm getting a little trigger shy after what we've seen since the new year. I'd love to put the money to work, but I may keep it on the sideline and play the wait and see game for another 6 months.

Where are you seeing 10% caps? I'm looking at Class C a hair north of 8% in the Denver metro, but I'm getting a little trigger shy after what we've seen since the new year. I'd love to put the money to work, but I may keep it on the sideline and play the wait and see game for another 6 months.

8% Cap is still a good return.

What other investment options would yield similar returns and be any more secure than real estate?

Sounds right. Anyone do this to an Aventador yet? Is this a quick visit to the dealer?

 

 

Rental properties near universities. Ideally rent to out of state kids. Perpetual income and a long turnover. Rent rises with tuition/housing.

8% Cap is still a good return.

What other investment options would yield similar returns and be any more secure than real estate?

 

After looking at South Florida properties where you can hardly get positive leverage for the last two years, I'd be VERY happy with a real 8% cap. I'm just curious where people are seeing 10%.

After looking at South Florida properties where you can hardly get positive leverage for the last two years, I'd be VERY happy with a real 8% cap. I'm just curious where people are seeing 10%.

 

The Greater New Orleans (surrounding area) market yields great returns. I'm in the process of closing on a 32 unit (class C) complex with a 15% cap rate.

The Greater New Orleans (surrounding area) market yields great returns. I'm in the process of closing on a 32 unit (class C) complex with a 15% cap rate.

Damn I need to travel to the states!

Im looking at more real estate and bonds also. Selling my company this year and if all goes well should have an extra couple mil to invest. Any of you guys have experience with larger apartments or commercial buildings. I had a lot of residential rental properties years ago, and they did great until the market took a huge dump. Thinking instead of doing the same may look at multi family or commercial this go around.

 

How much do you guys diversify? Do you prefer to put bits in real estate, stocks, & bonds to really create a more level field?

Buy big oil when the price hits $25/bbl.

How? USO? Or other stocks?

Ok , real estate it is . I'm sure from this thread we can all assume I know NOTHING about it but everything I now know I once knew nothing about. Where does one begin to look for commercial property listings ? I have couple of lunches lined up next week with a couple current long term clients of mine that are in the commercial RE business and from what I see, are doing very well. Budget wise I'm most likely looking at small Multi family properties.

 

 

Wouldn't multi family properties be classed as residential?

Wouldn't multi family properties be classed as residential?

 

 

Stop pointing out my ignorance . I clearly know zilch about this, help me Fortis haha. One of the guys in question has actually spearheaded and done very well revitalizing ( on a large scale) an older part of town that is now Hipster heaven and exploding with growth. Most projects of his are commercial lower floors with lofts above , obviously way out of my current budget. The latest is a high end , 40 or so unit apartment directly across from the learning hospital here in the capital.

 

Stop pointing out my ignorance . I clearly know zilch about this, help me Fortis haha. One of the guys in question has actually spearheaded and done very well revitalizing ( on a large scale) an older part of town that is now Hipster heaven and exploding with growth. Most projects of his are commercial lower floors with lofts above , obviously way out of my current budget. The latest is a high end , 40 or so unit apartment directly across from the learning hospital here in the capital.

 

Don't beat yourself up I could be wrong on this one, here commercial RE are locations where a commercial activity is performed, residential RE are basically locations where people go to put their heads down to sleep, then you've got mixed uses as you mentioned above, shops on lower levels and residences above.

 

And yes follow the hipsters LOL

It depends on how savvy you are investing in the market. RE is definitely not a get rich quick scheme. It is more of a get rich over 40 year scheme. And you are dealing with tenants, excuses, repairs, and SOOOOO much bullshit you can't even imagine. The more that you have the easier it is. I have made WAY more on my investments than I have in my rentals and I have 168 units.

Stop pointing out my ignorance . I clearly know zilch about this, help me Fortis haha. One of the guys in question has actually spearheaded and done very well revitalizing ( on a large scale) an older part of town that is now Hipster heaven and exploding with growth. Most projects of his are commercial lower floors with lofts above , obviously way out of my current budget. The latest is a high end , 40 or so unit apartment directly across from the learning hospital here in the capital.

 

I joined a group who invests in apartment buildings in Texas. It's pretty plug and play. You invest they do everything and send you checks in the mailbox. Of course this way your return is less than doing it yourself but I also do nothing and get a check in my mailbox monthly. Hit me up if you want me to connect you with this group. If I do hook you up though I suggest you do your own research and caveat emptor.

I joined a group who invests in apartment buildings in Texas. It's pretty plug and play. You invest they do everything and send you checks in the mailbox. Of course this way your return is less than doing it yourself but I also do nothing and get a check in my mailbox monthly. Hit me up if you want me to connect you with this group. If I do hook you up though I suggest you do your own research and caveat emptor.

 

Please elaborate.

 

Do you end up getting any ownership of the building? What percentages are you paying out. What is the overall ROI?

Wouldn't multi family properties be classed as residential?

 

I think the distinction between 'residential' and 'multi-family' is unit count. Up to 4 units is classified as residential and 5+ is multi-family. I think the only area this matters in practice is with lenders, insurers and possibly local taxing authority.

 

Im looking at more real estate and bonds also. Selling my company this year and if all goes well should have an extra couple mil to invest. Any of you guys have experience with larger apartments or commercial buildings. I had a lot of residential rental properties years ago, and they did great until the market took a huge dump. Thinking instead of doing the same may look at multi family or commercial this go around.

 

How much do you guys diversify? Do you prefer to put bits in real estate, stocks, & bonds to really create a more level field?

 

You're going to want to get on board with someone that has experience for your first few purchases. If you're looking to invest on your own the big brokerage houses (CBRE, ARA, etc) will have private client groups that can walk you through the process and give you sound advice. You will be hiring a management company that should leave you with the business decisions while they take care of the day to day. The other option (outside of obvious fund/REIT investments) is to invest with an owner/operators (you'll probably have to go through a capital markets/equity placement group) and go in as a limited partner in a deal. This should, hypothetically, get you in bed with an experienced buyer and operator that will handle all aspects of the investment, but you will be fee'd throughout the life of the transaction and your return will be diluted based on performance hurdles.

Please elaborate.

 

Do you end up getting any ownership of the building? What percentages are you paying out. What is the overall ROI?

 

You are a percentage owner and your roi is based on your percentage of initial investment. Since I've joined they're on their third one that's currently subscribing. The first one was their Pearl. Paid 85% roi in year one. I didn't do number two because I had something else going on. It was a more realistic roi but I don't know because I didn't subscribe. Again I can introduce you and you can do your own research from there and I'd suggest you do your own research. I'm only passing what I know and MY experience, but I want no responsibility and assume none.

Ok , real estate it is . I'm sure from this thread we can all assume I know NOTHING about it but everything I now know I once knew nothing about. Where does one begin to look for commercial property listings ? I have couple of lunches lined up next week with a couple current long term clients of mine that are in the commercial RE business and from what I see, are doing very well. Budget wise I'm most likely looking at small Multi family properties.

I like farm land. I dont know how it is in your area. Here it is hard to make it cash flow if you have a loan. But for 80 acres you get 10-20k a year after expenses. I am sure its not the best return for 500k, but farmers dont usually complain about rent. Its about the easiest form of real estate. Another thing though, Farmers have a ton of CASH right now. So its hard to buy, But with crop prices down it might be easier.

To Steven's point, multifamily for all intents and purposes is anything 2+ units. For financing purposes however, 2-4 units still allows you to finance using residential methods, which include FHA, so long as it is owner-occupied and would usually need to have 1 unit delivered vacant at the close of escrow.

 

5+ unit multifamily residential allows for commercial paper to be obtained against a building, and the bulk of the qualifying is based on the building's performance. Most lenders stress test buildings based on income and expenses, and if the debt coverage ratio (typically 1.25) is met, the financing is determined by however much you have to put down to make sure that ratio is met. You take the Net Operating Income and divide it by the total Debt Service (loan payments 12mo) to determine the DCR. This is why people like investing in value-add deals that are mis-managed and/or underperforming. There is no 'market appreciation or depreciation' like in residential. Income is king in commercial.

 

You can send me PMs for more and I'd be very happy to answer any of your questions.

I have looked at a couple of companies that sell properties that they have renovated and now are renting out. Now they sell them but still manage them for you. My problem is, how can I trust them. It always looks like a good deal, but then I back away because it feels like I have no control. Have any of you tried this and are happy with the experience?

I have looked at a couple of companies that sell properties that they have renovated and now are renting out. Now they sell them but still manage them for you. My problem is, how can I trust them. It always looks like a good deal, but then I back away because it feels like I have no control. Have any of you tried this and are happy with the experience?

 

You should have a 30 day termination clause in your management contract. Have you spoken to anyone that has purchased from them? I would be very hesitant to work with a manager/owner on the commercial side (big conflict of interest since they may steer tenants to their own properties), but this shouldn't be as much of a concern with MF properties.