Podcast#54 – Fundamentals – Debt Deal vs Equity Deal

Debt deal typically has less risk but less reward
Equity deals have a lot more options on how returns are paid out. 


10 Free “Think Outside the Cubicle” Modules – Access to spreadsheets, mindset tips, networking offers, and deal-flow access! Value-add for even the experienced investor!
Enroll here: https://simplepassivecashflow.activehosted.com/f/1

Sign-up Here for ‘Hui” Deal Pipeline Club:
https://simplepassivecashflow.activehosted.com/f/3

Looking for mentorship/turnkey services/apprenticeship/partnership:
https://docs.google.com/document/d/1K8jFe2GS6uJ5O3f1z8qNjMsSf6Vk4gH6zbfJjEumIQo

Looking for a passive fund that invests in distressed notes?
SimplePassiveCashflow is proudly sponsored by www.investinahp.com

Time is the most important resource!
Email Lane@simplepassivecashflow.com for a free 10-hour trial with the same VAs I use

Please leave a review? Or Share on Facebook! Please!
https://itunes.apple.com/us/podcast/simplepassivecashflow.com/id1118795347

Join a Social Club:
Seattle: https://www.facebook.com/groups/SPCHUISEA/
Hawaii: https://www.facebook.com/groups/SPCHUI808/
Portland: https://www.facebook.com/groups/SPCHUIPDX/
Bay Area: https://www.facebook.com/groups/SPCHUIBAY/
So Cal: https://www.facebook.com/groups/SPCHUISOCAL/
East Coast: https://www.facebook.com/groups/SPCHUIEAS/
Central USA: https://www.facebook.com/groups/SPCHUICUS/

Once you have gone through the majority of podcasts feel free to sign up for a chat!
https://calendly.com/simplepassivecashflow/20

Summary of every Simple Passive Cashflow Podcast: https://drive.google.com/open?id=1banG1R0TKhv_ji54tsZMbYJ8iikr9Ib103ZUeYse_ts

 

 

 

Podcast#53 – #LaneHack – Gary Vaynerchuk – Three Keys to Success

Self Awareness – Know your skill set.
Hard Work – Out of the three this is what you have most control of.
Empathy – Without this you will not be a good Leader and your business will eventually fail.

#LaneHack #JustTheTip

10 Free “Think Outside the Cubicle” Modules – Access to spreadsheets, mindset tips, networking offers, and deal-flow access! Value-add for even the experienced investor!
Enroll here: https://simplepassivecashflow.activehosted.com/f/1

Sign-up Here for ‘Hui” Deal Pipeline Club:
https://simplepassivecashflow.activehosted.com/f/3

Looking for mentorship/turnkey services/apprenticeship/partnership:
https://docs.google.com/document/d/1K8jFe2GS6uJ5O3f1z8qNjMsSf6Vk4gH6zbfJjEumIQo

Looking for a passive fund that invests in distressed notes?
SimplePassiveCashflow is proudly sponsored by www.investinahp.com

Time is the most important resource!
Email Lane@simplepassivecashflow.com for a free 10-hour trial with the same VAs I use

Please leave a review? Or Share on Facebook! Please!
https://itunes.apple.com/us/podcast/simplepassivecashflow.com/id1118795347

Join a Social Club:
Seattle: https://www.facebook.com/groups/SPCHUISEA/
Hawaii: https://www.facebook.com/groups/SPCHUI808/
Portland: https://www.facebook.com/groups/SPCHUIPDX/
Bay Area: https://www.facebook.com/groups/SPCHUIBAY/
So Cal: https://www.facebook.com/groups/SPCHUISOCAL/
East Coast: https://www.facebook.com/groups/SPCHUIEAS/
Central USA: https://www.facebook.com/groups/SPCHUICUS/

Once you have gone through the majority of podcasts feel free to sign up for a chat!
https://calendly.com/simplepassivecashflow/20

Summary of every Simple Passive Cashflow Podcast: https://drive.google.com/open?id=1banG1R0TKhv_ji54tsZMbYJ8iikr9Ib103ZUeYse_ts

 

 

Open post

Podcast #49 – Fundamentals – Why not to buy cheap $50K properties

Why don’t buy Turnkey under 50k.
1) not worth financing… If your not financing then what’s the point
2) bad tenant quality
3) no exit strategy because no one will want to buy it other than a sucker investor

Looking for a passive fund that invests in distressed notes?
SimplePassiveCashflow is proudly sponsored by www.investinahp.com

Time is the most important resource!
Email Lane@dev.simplepassivecashflow.com for a free 10-hour trial with the same VAs I use

Please leave a review? Or Share on Facebook! Please!
https://itunes.apple.com/us/podcast/dev.simplepassivecashflow.com/id1118795347

Sign-up Here for ‘Hui” Deal Pipeline Club:
https://docs.google.com/forms/d/1gulyiaz7_gb8koqGl91bGPz-mdwlBVz-PcvXDOXOL5Y

Join a Social Club:
Seattle: https://www.facebook.com/groups/SPCHUISEA/
Hawaii: https://www.facebook.com/groups/SPCHUI808/
Portland: https://www.facebook.com/groups/SPCHUIPDX/
Bay Area: https://www.facebook.com/groups/SPCHUIBAY/
So Cal: https://www.facebook.com/groups/SPCHUISOCAL/
East Coast: https://www.facebook.com/groups/SPCHUIEAS/
Central USA: https://www.facebook.com/groups/SPCHUICUS/

Once you have gone through the majority of podcasts feel free to sign up for a chat! And be let into the Secret Hui Facebook Group.
https://calendly.com/simplepassivecashflow/20

Looking for mentorship/turnkey services/apprenticeship/partnership:
https://docs.google.com/document/d/1K8jFe2GS6uJ5O3f1z8qNjMsSf6Vk4gH6zbfJjEumIQo

Summary of every Simple Passive Cashflow Podcast: https://drive.google.com/open?id=1banG1R0TKhv_ji54tsZMbYJ8iikr9Ib103ZUeYse_ts

 

 

Podcast #48 – Interview – Kenny Wolfe – Got $50K? Move over SFHs!

Kenny Wolfe is an apartment syndicator today but it was not always like that
At 33 years old he left his CFO position and went full-time REI
2016 might have been the peak (100 deals, 10 look ok, and one offer)
5.25% interest rate at early 2017, 1.25 DSCR is a hard underwriting figure
At 24 years old bought and failed at a tanning salon
MFH Property Management is much more responsible
Treating investing like a business with an office and professional documents
If you need a VA I am a partner of a VA firm that offers super qualified staff for a variety of tasks. Get creative and send me an email if interested in a free 10-hour trial.
www.Wolfe-re.com


#LaneHack #JustTheTip

Looking for a passive fund that invests in distressed notes?
SimplePassiveCashflow is proudly sponsored by www.investinahp.com

Please leave a review? Or Share on Facebook! Please!
https://itunes.apple.com/us/podcast/dev.simplepassivecashflow.com/id1118795347

Sign-up Here for ‘Hui” Deal Pipeline Club:
https://docs.google.com/forms/d/1gulyiaz7_gb8koqGl91bGPz-mdwlBVz-PcvXDOXOL5Y

Join a Social Club:
Seattle: https://www.facebook.com/groups/SPCHUISEA/
Hawaii: https://www.facebook.com/groups/SPCHUI808/
Portland: https://www.facebook.com/groups/SPCHUIPDX/
Bay Area: https://www.facebook.com/groups/SPCHUIBAY/
So Cal: https://www.facebook.com/groups/SPCHUISOCAL/
East Coast: https://www.facebook.com/groups/SPCHUIEAS/
Central USA: https://www.facebook.com/groups/SPCHUICUS/

Once you have gone through the majority of podcasts feel free to sign up for a chat! And be let into the Secret Hui Facebook Group.
https://calendly.com/simplepassivecashflow/20

Looking for mentorship/turnkey services/apprenticeship/partnership:
https://docs.google.com/document/d/1K8jFe2GS6uJ5O3f1z8qNjMsSf6Vk4gH6zbfJjEumIQo

Summary of every Simple Passive Cashflow Podcast: https://drive.google.com/open?id=1banG1R0TKhv_ji54tsZMbYJ8iikr9Ib103ZUeYse_ts

Podcast #47 – Fundamentals – City Fines, Special Webinar Announcement, Dealflow

I am opening the kimono and getting naked… I am hosting a free webinar showing my 2017 results from my 10 SFH personal portfolio.

WHEN: 6PM, Monday April 3, 2017

It is only available to those who have signed up for the HUI Deal Pipeline Club. Click here to sign up!

Complete Private Form to get on the Guest List:
https://docs.google.com/forms/d/1gulyiaz7_gb8koqGl91bGPz-mdwlBVz-PcvXDOXOL5Y

You will learn the following:
-See how I use excel to track each property performance per the Schedule E
-See how I track overhead ie meals and other fun purchases like my beloved Apple AirPods
-What metrics I keep track of
-How much money I made last year
-What was my average returns
-How many of the properties actually lost money
-This may never be seen again! – I do not know if I will release/record this to the public for obvious reasons so this may be the only chance for you to see this.

Please reply back to me to unsubscribe and I will not email you again.

Check out the first few foundational podcasts and then start on this checklist:
https://docs.google.com/document/d/1HE9pEJU9s8IZWvQJ-rNOH8qPxCtr9100i9GFiaeVaYQ
And if you need help starting a SFH portfolio or Turnkey Rentals…
https://docs.google.com/document/d/1AuiPk8ABaA3vu1VzbUsfRiFQLEt-LXtUfI6GcwxgnsE

Commentary of the market from my crystal ball:
The Fed and Executive branch are in conflict. Both want control and want to wrestle control away from the other and make the other look bad.

Look out for instability in China as it might be the trigger for economic weakness.

Start Here

****UPDATED 1/2018 w/ Quick Start List!!!****

Welcome if you are new! And welcome back… here is what I have been working on…

1 ) Just closed my second syndication in my own name. If you want access to these opportunities they are only available to folks with a pre-existing relationship. So sign up for my Hui Deal Pipeline Club and setup a time to chat.

Hui Deal Pipe Club acquisition stats (Estate-2016)- Acquired over $50M dollars and $3.5 million dollars of funds raised in 2017 alone.

2) Working with my coaching clients and Starting group coaching. Honored to be part of this paid Mastermind. Email if interested.

3) Moved to Hawaii! Waiting for the right deal to come along in this sellers’ market and ponder life.

4) Analyzing just 5 MFH deals a month for my own deals (quality over quality). Finding another deal I can partner with.

Goal: Turn “C” and “B” class properties, 60-300 units (stabilized with value-add opportunity) with at least 75% LTV/25 year amortization. We plan to hold 3-6 years and sell when we have doubled our investors’ money. Utilize Non-Recourse debt for extra security.

Buying Criteria:
Seeking MFH at least 60 – 250 units.
1. Value-add component: typically 85-90% occupancy for non-recourse loan & discount based on condition or motivated seller
2. Price: $1,500,000 – $9,000,000, per unit cost under $55K.
3. Location: secondary and tertiary markets across
4. Class: D/C/B Property in a B/A neighbourhood

Checking out properties with Patrick Herbig

My portfolio as part of MFPE Investments LLC consists of 626 units in OK, TX, and WA.
Here is what I’m doing as co-owner of MFPE Investments LLC:
Lake Charles LA – 199-unit RV / Mobile home development (pending)
San Antonio, Texas – 192-unit class B apartment (2017)
Houston, Texas – (2017)
Oklahoma City, Oklahoma – 170-unit class C apartment (2017)
Oklahoma City, Oklahoma – (2017)
Panama – Half acre of Coffee Farm (2017)
Indianapolis, Indiana – 1 Single Family home (2015)
Atlanta, Georgia – 5 Single Family home (2015)
Birmingham, Alabama – 1 Single Family home (2014)
Port Orchard, Washington – 18-unit class B apartment
Previously held assets (acquired-sold)
New Castle, Pennsylvania – 1 Single Family home (2013-2017)
Seattle, Washington – 1 duplex (2011-2014)
Seattle, Washington – 1 Single family home (2009-2013)
Atlanta, Georgia – Shopping mall
Port Orchard, Washington – Quadplex

 

 

 

“I started the Hui Deal Pipeline Club because I want to see each of you get to your goals financially so you can focus on what is really important to you. There are other fundraisers out there that will train their investors down to 10-15% IRRs on crappy deals and do “deals to do deals” or to pick up acquisition fees. Between investing alongside you folks and wanted to grow my track record the right way with the best product I know you guys will keep coming back and bring your friends.

 

SimplePassiveCashflow.com is for working professionals who are looking for diversification and better returns outside of traditional investments such as mutual funds and stocks. The Hui Deal Pipeline Club is a free investor club where I filter investments and underwrite the numbers and partners myself. Unlike other investor lists and groups, my investors have personal access to me and know that I personally have skin in the game investing alongside with my investors.

 

Let’s work together to redirect money from the Wall-Street casinos and corrupt financial institutions…To help the endangered ‘Middle Class’ savers find safer, more profitable investments in Main Street opportunities benefiting local communities.”

“Start Here”Continue reading

Podcast #26 – The Cons of Turnkey Rentals with Alex Franks

Turnkey seller and MFH investor discusses the cons of Turnkey rentals. Also discuss leverage and the current TK landscape in 2016.

Random thoughts:

The problem with the lower end assets, they are such a more hands on investments , just more of a headache. Which I’m about to tell you why. Yes, on paper the entry price point looks great. So folks are only seeing one side of things. Lower end properties tend to be higher maintenance, higher expenses, and much higher turn over rate. Another factor is the rental prices aren’t making sense, while still continuing to rise. We owned 37 of these exact type of homes (lower end in RH SC during the timeframe of 2004 -2009). So I’m speaking from experience, these type of assets tend to burn holes through investors pockets. Most folks start here, (1) Because they do not know any better and (2) The price point is much more attractive. These are what I like to call recycled product ( Quote by “Jay Hinrichs”) , which usually has a 5 – 8 year shelf life. Or in better terms ” the game of hot potatoes”- who or which investor is getting stuck holding the bag. Easy way to look at things are any institutional, or Hedge funds buying in this asset class. Now they are mostly buying A – B assets. Their is a reason Wall Street, and most private money are parking their funds into higher class assets. Most times this is why newer investors, jump in because its all that is left on the table for them ( lower end )or what the Gurus are selling.

I can dig a lot of great information up to prove what a great city Charlotte is. We are Atlanta’s little teenage brother growing up (fast) We are all lucky to be in a booming city basically still many years of growth left

I have to disagree on this being a good buy and hold market on most markets. From 2009-2013 this was one of the best buy ,and hold markets. Today we are facing an over priced market, rental returns are much less. I have some left over stock still holding from 2009. I was buying from $40k to $50k range. Same house now priced in $100k – $120k pre-rehab price range. I was also buying in 4 states; NC, SC, Georgia, & Florida. With that being said, “one man’s junk is another man’s treasure.” So for out-of-state folks with (ex: California or NY) they tend to have much higher entry points. So buying a house here from $100k $150k with 1% rental rule. Still makes this a very attractive market for out-of-state or international folks. This does not mean we have a great buy and hold. For me personally, it says we are lucky that we still have a lower entry point then most folks markets.

If we jump in and really become bit more analytical. It is cheaper to build than buy today. We will be building new construction rentals for a few years. I am seeing this as similar to the 2000-2004 market. So the box Vinyl Village type homes is the current build (mixed in with townhomes, duplexes, quads). That mixed with real estate cycles , which very folks even discuss or understand.

Now back to the 10% Cap rate this is why most international folks are going to get burnt, and  USA  folks will as well. When investing in these lower end asset classes, Folks brought in cities like Detroit and Michigan. Promised a 20% return on the properties. I challenged folks to show me that over 5 years period (I am sure those returns are a lot less). Keep in mind this has nothing to do with the homes. It has everything to do with our economy, salaries for the lower income bracket, and a renters mentality. No security in those type of jobs with very little insurance benefits so job changing is common among lower end renters. It is very hard for someone paying 35 to 45% of their income to pay rent. I know here comes that chatter, well property management will handle that, right? We owned a management company from 2009 -2013. We lost our asses with that side of the company. I did it mostly for our turnkey clients. Good Rule of Thumb for any management folks who want to get in the business. Get 300 homes plus or get out of the business. Not profitable with out the inventory.

Now back to low end assets, very rare you are every going to sell, and get retail prices in these areas. How many USA folks move to rental areas? Once a area is over 50 % or more rentals, values will eventually drop as will the area. We have artificially inflated prices, in most of the areas with cash sales to out-of-state folks, or local cash buyers( who just don’t know any better). Basically most people are showing up to the table, and all we have are scraps left! This is not just here; Kansas City, Indianapolis as most markets to just a name a few are going through same thing. I still jump on 3 to 5 webinars month with out-of-state folks seeing what they are selling. So limited sales potential down the road for every one.

I was working with as well as being one of these turnkey groups for a few years. We all setup table and booths in LA, San Fran, and other markets. Selling our cities, and our turnkey deals. Me and a few of the guys we got smart, and jumped into the international markets. I still play there my self and see a strong demand for the turnkey product (just not worth it for me). Folks if someone was to start a local solid turnkey business here in Charlotte NC (5/month ) there is a good demand out there for this product.

Now for the lack of inventory. We had a few smaller hedge funds here in 2011-12 buying before most folks realized. They were already here buying smaller up to 100 homes.. Then the big boys like invitation homes (Blackstone which is a large wall street fund for folks who don’t know ) came in purchased 7000 plus homes in little under a year. Most of the vinyl villages, anything built 2000 above; 3bed 2 bath or larger was their focus. Banks are realizing they can go into the property now . Taking a lipstick approach to rehabbing. Sell it them selves as well. So that’s a few reason for the lack of inventory.

————————————————————————-

So I hope I don’t offend any one and please answer back separately but I like networking and so should others. Great way to get out there and meet more folks.

So here we go another few answers or thoughts of mine on turnkey investing and why I made the jump to apartments.

And my latest post for folks if you think it has some substance please feel free to share with friend. First one was about turn key investments how they did over 10 year period.

First one must keep in mind most turn key companies did not exist 10 years ago. This was a product the market created. These same properties the lower end were subprime homes. So folks sold them locally in their own market. We were approached by LA reseller in late 2008. Back then everything was sold retail, very few investors (very few smart) were building their own portfolio. Most of these guys have been involved in this business for a very long time

Next point- the mess started in 2007 – 2008 when most of the product was created. Now that being said, I see the same lower end crap returning and being sold as great turn key deals. These type of deals are going to cost folks a lot of money. Again, nothing to do with the asset, but more to do with the mindset of the renters.

Now on the flip side, if you purchased between 2009 – 2013 most of the numbers made sense in many markets. Right now the nice properties (A and B limited product) as most folks can sell these retail.

So why sell turnkey or through a reseller? Look at most resellers or turn key with the exception of one or two companies. They are selling lower over priced assets or a nice products that is super over priced. The problem is even over priced, the entry level makes sense compared to most folks (local entry point). Lack of good solid deals make folks have to stretch the numbers or present good deals to others. If all these deals were so great why would any one sell not keep?

At the same time, I used to buy 4 properties sell 3 to keep one free and clear. So every person’s motivation is a bit different. I would just be careful to anyone who has not seen or been through the 2007- 2008 crash selling deals. I don’t think they can or will truly understand things. Especially when selling for profit and their motivation is profit. Which is why I get it; because they are in the business to make money, by selling a product. I just think the shelf life of that product has passed. So one can look at wall street or other investments, or jump in the turnkey market.

I don’t want folks to think I am against turnkey. I just feel the window has passed on solid buys. The market tells us what to do, you just have to listen. Right now I’m building rental properties all in for $65/sqft. So cheaper to build than buy. There is no rush to investing. Sometimes it is better to sit back and watch. See what the market is saying and find the best place to park funds. Real estate is not always the best, but not the worst either.

Now what am I doing~ building new construction retail and rental. Taking the profit and buying apartment buildings. So I am hoping to have 200 units paid free and clear in the next 5 years along with being a private lender for local folks. Knowing I know the numbers better than most.

So I hope I answered your questions and have not made it more confusing.

Post number 3 was turnkey investing in general

I was a turn key guy who also provided for resellers. I think the window for solid deals has passed. Most of the folks selling or giving you advice here are selling an asset or being paid referral fees to sell that asset (nothing wrong- it is a business and they are providing a service or the asset itself). During 2009 – 2013 was the prime time to purchase the solid cash flow rentals. Right now folks are way over paying for higher class assets or buying the lower end scraps. Lower end is basically recycled product that did not work out for the investor the last time around. Lower end is usually not a winner, but more of cash drain for your pockets. I see Indy and Kansas city being spoke about as they are the first recycled cities that I can attest to.

What I mean by this, in 2009 when I was doing seminars around U.S. areas, so were the guys from both of those markets. Now I am seeing the same older junk make its way back around only as higher priced. Again, I am not against turn key. We were scheduled to build 150 units for one company (turn key rentals). That number is now up to 500 units in a few markets in the southeast. We are rebuilding the vinyl villages that were built in 2000 – 2004. Very similar product, actually identical product. Just cheaper to build than buy, which then tells me the cycle has changed or moved on.

Basically what I’m saying, it is cheaper today to build than buy in most markets. That is why I don’t think the turn key is a great buy today. I think folks are getting the bottom of the barrel or very over priced assets. Keep in mind, most the major hedge funds came in 2013 they took majority of any of the solid deals. The nicer homes A – B type assets most local folks can sell them retail. So why would they pay a reseller or flip to investor? Better money in retail sales in most markets, which is similar to 2005-2007. Folks sold these same assets to subprime buyers (lower end) or retail to home buyers (A-B) asset. So you can see, first and foremost, there is inventory shortage in most markets. Folks now have to push other cities (lower end product). As you folks in California have such a high entry points. Most markets still look attractive. Trust me when I say on paper numbers look great. In the long run I feel the return for folks from 2014 – present will be a lot less than the prior years. In 2009-2013 if you purchased during this time I think you made great buys. As well as hitting the timing of the market correctly.

Real estate is a lot about timing and cycles. At the same time the market tells folks what is working and what is not. You have to listen and not recreate the wheel. Still good deals just harder to find. I just prefer apartments over houses.