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The Journey to Simple Passive Cashflow

 

The Journey to SPC – Episode 1 – 2018.06.14@$5,400/Mo

Get the uncut version by signing up for the Hui Deal Pipeline Club

Side topics:

Getting frustrated at W2

What are we talking about “Metric?”

What I don’t like about engineers

New Podcasts & Articles:

Not ‘Faux’ News [Lane’s Real Talk]:

  • May Yardi Report – LinkU.S. multifamily rents rose $4 to $1,381 in May. This represents a 2% year-over-year increase but a 50-basis-point decline from April, as new deliveries took a toll on occupancy rates and growth.

I don’t care about politics but lets understand what’s happening…

Everyone saw Trump shaking hands with KJO from North Korea

For nearly 20 years, U.S. foreign policy has been dominated by military campaigns in Iraq and Afghanistan.

Fighting two wars made it necessary to make deals with other nations to secure key strategic military placement (ie bases in Turkey).

Everything is connected and when you become aware of this the world’s events make sense.

Turkey attacked the Kurds because they knew the U.S. would value the air bases in Turkey over supporting the Kurds.

Russia annexed Crimea because they knew we wouldn’t intervene militarily (Obama would not send more troops).

China built island naval bases in order to expand their military presence.

When the cat’s away the mice play…

Seeing the end game, Russia seized Crimea because they correctly calculated that Obama would not put U.S. troops into yet another battlefield.

Trump’s policy is more independent and less reliant on other countries.

When Saudi Arabia recently petitioned the U.S. for military support, Trump told them to pay for it.

When the UN voted against U.S. agendas, Trump told them that the U.S. would review the support and money it gives to countries that consistently work against the U.S.

One could describe this as hardball. It works in a lot of real estate deals when the winner is the party that is willing to walk away first. Who knows if it will work in world politics???

Right now the US economics look good and rents continue to raise at a steady pace (although not expected to mimic the growth in 2014-2016).

Although we all shake our heads at stories like this…

Call it a flashback but Subprime mortgages are bank except with a new name, “non-prime.”

“allow … borrowers to have FICO credit scores as low as 500 … can take out loans of up to $1.5 million … can also do cash-out refinances … up to $500,000. Recent credit events, like a foreclosure, bankruptcy or a history of late payments are acceptable.”

Other stories remind us of the big picture…

Trump signs bipartisan bill rolling back some Dodd-Frank bank regulations – Los Angeles Times, 5/24/18

“Community banks, which enjoy broad support among Republicans and Democrats, will be freed from Dodd-Frank’s mortgage rules if they make fewer than 500 mortgages a year.”

This unraveling of Dodd-Frank with make lending easier, which is awesome for real estate investors.

Interest rates:

 

Link to Hui’ Google Drive – Treasure Trove of Real Estate Investing Goodies!

 

Hacking my 6 needs

  1. Growth: Revamped my messaging to you. I will start doing these monthly tailored messages.

 

New initiative: Per the advice of my new health advisor (who said “my VO2 max sucks”) I an starting the day with 5-10 rounds of high intensity calisthenics to get my heart rate over 140 bpm. This should be done in 5 minutes and continue in the fasted state after. Recently I paid for a health MD. It’s cool because he took my blood biomarkers, did a DNA sample, and gave me a supplement plan. We get together and chat about how things are going with Dex scans and VO2 max readings (think Gatorade commercials with Lance Armstrong with the mask on while biking). It cost a couple thousand dollars but I figure it can’t hurt. Your health is wealth. He sold me when he said “MD’s are normally idiots” (He is an MD himself).

 

Morning time supplements:

Simplepassivecashflow/latte

Vitamin D3 – 5000iu

Omega 3 – 2g

Vitamin K2 – 1g

Alpha Liponic Acid – 1

Multivitamin – 3

DHEA – 1

CoQ10 – 1

Zanthosyn (Astaxanthin) – 12mg

Anastrozole – 0.5mg

 

Evening time supplements:

Melatonin – 3mg – PM

Zinc Magnesium – 2g

Zanthosyn (Astaxanthin) – 12mg

2. Contribution: I interviewed four candidates for a job. I don’t know if I will work with any of them but I feel like I definitely helped them get where they need to go. Apply here.

3. Significance: Mailing out 160 books (email me for final twenty) and spoke at two events and gave out books there. I also wrote my first Forbes article.

4. Uncertainty: Doing a syndication in a new area in a new partnership. Finishing up two flips (38k & 21k) in Atlanta and will put on market $oon.

5. Certainty: I got bonus depreciation on my K1 and got first distribution checks from Syndications per plan. Also got paid back on a 2nd lien private money loan I did on a flip. And replenished money back into investinahp.com right before the 12% fund closed. A lot of my deals are starting to get cashflow now.

6. Love/Connection: Helped out a few people locally at my meetup get out of a tough legal situation with a lawyer referral. Hosted a mastermind meeting with like-minded people. We had whiskey it was good fun and I think I will continue. I realized part of the reason I don’t like my W2 job is that I am surrounded by W2 mindsets and I too am a product of my peer group.

 

Distractions/Barriers/Noise/Resistance:

What I need help on: More time – need to add staff or I will just continue to be a super employee of one. Join my team!

Lessons learned:

#LaneHack – I use a lot of Gmail inbox labels. Here are some great suggestions in this article.

https://hustletostartup.com/organize-gmail/

I especially like the one about filtering all emails that have the keyword “unsubscribe” which are likely to be things trying to sell me things.

It’s not all about Money:

Flowstate – Song of the month – Avicii Bromance – Avicii died this past month 🙁 – Sign up for the Club to download 😉

Be ready for the best sunset and sunrise captures: https://sunsetwx.com/

Join the club and find out what the easter egg is…

Podcast #113 – Buck Joffrey – Medical Surgeon gets fired and goes into freefall

For the limited offer coaching from Buck and program: Simplepassivecashflow.com/buck

Video Version: https://youtu.be/jq0MhXDEzzA

Audio Version: https://youtu.be/TUmVLqNNtlE

 



Text “simple” to 314-665-1767 to download the Hui Google Drive files and the  2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word “ebook” to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math!

________Here are the Show Notes________

 

We heard you on podcast 17 and you told your story – http://simplepassivecashflow.com/podcast-17-serial-entrepreneur-dr-buck-joffery-wealthformula-podcast/

Hearing your story high paid doctor. Describe yourself as an employee?

Great butt kisser

Lane’s getting fired story

So you were fired what gave you the security to not go back?

Lane’s getting fired story

 

http://richhabits.net/catastrophes-reveal-inner-greatness/?mc_cid=610082b2da&mc_eid=a129173ca3

 

Why professionals are trained to go through the system

 

The two excuses why not to leave the professional system

 

Wealth formula – Mass (money) x Velocity (Leverage) = wealth

 

You need to make money

 

What happen to assisted living project?

 

Taking shots and trying things out? Where is the transition point from taking singles to going to homers?

 

We are talking about Jorge from Simplepassivecashflow.com/ahp

 

SPC listeners are usual creatures. Get me in a room with a bunch of W2 workers talking about their frequent flier miles and their cars and I’m completely turned off. What are your thoughts on coping with this?

 

What are some ways you teach the entrepreneurial spirit with your kids?

 

What if they just want to work for the man or do peace corps?

 

Simplepassivecashflow.com/buck to get the free 1-hour coaching offer from Buck.

—————————————————–

 

Our worst W2 moments which were our Han Solo Moments

 

How to make it as a medical professional? – Kiss Butt 😁

 

We are robots.

 

For more content go to Simplepassivecashflow.com/buck

Apartment Video Walk-Throughs on YouTube Channel

Check out all the videos on our YouTube channel. Subscribe to get the latest and hidden videos.

Des Moines, Iowa – 52-unit C+ Class Apartment (April 2018) – Video

San Antonio, TX – 192-Unit Class B+ MFH (March 2018) – https://youtu.be/-5h2GKZ3I58

San Antonio, TX – 253-Unit Class B+ MFH (March 2018) – https://youtu.be/vj8ZMteppfg

Oklahoma City, OK – 170-Unit Class C MFH (March 2018) – https://youtu.be/3n4Kan6fmAw

QRP – Qualified Retirement Plans & Free Book

I personally don’t like these QRPs or qualified retirement plans (Roth-IRA, Solo 401ks, etc) if you are an active real estate investor. But if you have money locked up in an old IRA or 401k this is a great way to get that money out to invest in your deals or syndications.

 

If you are conservatively using prudent leverage and finding decent deals there is no reason you should not be able to retire in 10 years or less and thus negating the very reason for these accounts. I don’t know about you but I want access to this money to play with well before I am sixty-something.

When you have money in these accounts it sounds good that you are not taxed on gains but you are restricted from getting a Fannie Mae loan. Using the QRP loans get you the second tier financing options, for example, a Roth IRA can buy real estate on leverage, however, will need a non-recourse loan which is often a fraction high-interest rate and lower LTV. No Bueno!

Info on using retirement funds for syndication deals:

Question: I am considering investing in a 506c investment on a multifamily property. They are raising a 1 million from investors, then getting a loan and making improvements to the property and repositioning it over 5-7 years. I wanted to use my funds from my SEP IRA which is currently in a qualified intermediary trust. What is the UBIT tax? Will I be subject to that on this deal? Also, should I set up an LLC that then loans the money to their LLC? How can I structure this for tax and liability benefits?

Answer [Note: From CPA and not this is NOT legal or professional advice]: When you invest in a business (syndicate = business) with your IRA, the IRA will be subject to UBIT (unrelated business income tax) and UDFI (unrelated debt financed income).

For our purposes, UDFI is produced when an IRA uses debt to purchase real estate. Essentially, the portion of the property’s income considered UDFI is based on the percentage of rental income derived from debt.

For example, Property A is purchased for $100,000. You put down 25% of the purchase price as a down payment and finance the remaining 75% with a traditional mortgage from the bank. The property produces $10,000 in net income for the year. $7,500 (75%) of the net income is considered UDFI and is subject to UBIT.

There is a deduction for the first $1,000 of income subject to UBIT. Income subject to UBIT over $1,000 is taxed at trust rates. For 2017, trust tax rates start at 15% and max out at 39.6% after just $12,400 of income subject to UBIT.

UBIT is paid by the IRA account. If for whatever reason UBIT is paid directly by the taxpayer, the amount paid is considered a contribution to the IRA.

Follow up question: Is there any difference in how the UDFI will apply for these:
1) SD IRA
2) SEP-IRA
3) Solo 401K
4) SD IRA (operated as an LLC) so this one is confusing… My LLC owns an LLC (syndication) which owns a property such as 150-unit on 123 main street

Question: I’m trying to decide if one is better than another for tax purposes?

Answer: The solo 401(k) is not subject to UDFI but it subject to UBIT. The IRAs are all subject to UBIT and UDFI. Note that generally the passive income flowing back to you is very low and the, as a result, we don’t see a huge UBIT tax.

Another idea would be to take a debt position (lending) rather than equity. The interest you would receive is free of UBIT and UDFI tax.

(This suggestion of a “debt” position or note investment with the SEP IRA to avoid UBIT and UDFI tax is a creative one… but it’s a very low chance of happening because it’s just too complicated and honestly not worth the effort from the syndicators’ side. It’s a very similar case of to a Tenant-In-Common (TIC) arrangement where an investor has 1031 exchange funds and wants to parlay that money into a syndication. It’s possible but from the syndicator’s perspective a lot of unneeded work when you can just raise the funds the traditional way. Caveat: if you are bringing in a huge amount of money say 50% of the raise then that might tip the scales in your favor)

Ask you can tell this is a really grey area. One CPA mentioned, the answer depends on how you structured the syndication, UBIT may or may not apply for the real estate holding for solo 401k. I would really try to toss the Operation Agreement to your individual CPAs to examine and determine ahead of time as I am not a CPA 😉

Caveat: If you are late to the game and already have a fat 401k then you should convert it to a solo401k. At that point, you should think about putting it into a syndication since you are restricted on how you can leverage it.

So if you are going to have one of these QRP accounts since you have an old 401K or old retirement accounts want to self-direct it in good investments and don’t want to take a huge tax hit right away set up a Solo401k or Checkbook control.

Get set up here or ask me for a warm email intro.

And get the free book on QRPs!

Podcast #111 – Interview – Brent Kawakami – Saying NO to a measly $300 a month & Networking on Facebook

YouTube Link: https://youtu.be/dgdMLNq73TM

Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word “ebook” to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math!

________Here are the Show Notes________

1) How much CF are you making today and how are you doing it?
Generally I’ve fluctuate based on buying/selling of real estate. Right now it’s all from passive investments in apartments. My peak was couple thousand a month.
So as I started investigating other investment activities I dabbled in:
P2P investing – Returns were decent (I think I made like 18%), extremely passive once you funded loans. I was fortunate that none of the ones i lended on defaulted so that’s real risk. While you are earning interest payments, it goes back to account so extremely illiquid. You wait out the loan term which can be long. No control. I’d rather do private lending that’s backed by a physical asset.
Dividend stocks – Lot of research, reading investment newsletters, etc. You’re still at the whimsy of the stock market. I could see doing this in future maybe if there’s a crash and you can pick up trophy companies cheap. Again no control.
Gold/silver – I got caught up by the Gold bug rhetoric of “the dollar not backed by anything” “ the crash is coming” “ look how much debt we have” blah blah . A lot of similar stuff you see some Cryptocurrencies saying now. To me you need treat as a store of value and something you don’t care about price. And you need to hold physically. It’s a chaos hedge. But it doesn’t cash flow. And if shit really did hit the fan, you’re not going to need gold, you’re going to need guns, lol.
Internet business (I did sell it later for a small gain). A lot of work…it’s a business. You can get caught up in the 4-hour work week thing, sell your ebook, etc but this takes consistent cultivating like any other business. I had an instance where a change in Google algorithm killed my profit.
Infinite banking (which i’m all in on still) – You’ve had podcasts before on this topic about all the benefits but it’s an amazing vehicle that complements real estate. Personally I don’t think of this as a true investment, it is a savings vehicle. I treat it as my cash war chest and foundation. Downsides to me are that you have to understand and treat as a system otherwise you’ll fail miserably. It’s also literally a lifetime commitment.
Ultimately I settled on real estate starting the single family route in Dallas area (buy, rehab, rent, self manage, etc). I eventually saw the light (What was the light) of multifamily and started investing passively, sold off my single family houses and now a new aspiring sponsor/operator. There’s all the typical things people say (econmies of scale, non-recourse, etc) but my a-ha moment (my 2nd Han Solo moment I guess you could say) was when I started looking for another rental house. I realized adding another $300/mo cashflow wasn’t going to drastically change my life. If I wanted to level up faster, I needed scale faster. Multifamily can do that. When you get a large check for hundreds of thousands from a disposition event on an apartment complex, that’s life changing and can get you places.

(So now you are in the stage where you are doing all the hard work before the success… lets go through this list of things that you are doing… this add value to the listener and maybe we can have a discussion about best practices – Just think in the future when a future investor listens to all the shit you did to get into this)

1) Joined mentorship program (I would rather not say who they were) No problem. Main best practice to me is it’s almost a requirement for MFH. This is a must in addition to all the other education (reading, podcasts, etc)
2) Regularly Contacting brokers/Signing up for lists
3) Evaluating deals
4) Scheduling in-person meetings with with brokers to connect (what did you do). My partner and I specifically reach out to have a meetings at a broker’s office. We’d talk about what we’re doing, looking for, etc and it gave us an opportunity to meet other associates. I’ve tried to do in-person at their office or if I can take them to coffee. For out of town brokers we’d do over phone or if we travel to see a deal (leveraging a current listing of theirs as a talking point to get convo started).
5) Making regular LoopNet rounds
6) Going on property tours
7) Networking on BiggerPockets/LinkedIn/Facebook, etc
8) Going to Meetups, events, and conferences
9) Partnered up with another new sponsor/operator to duplicate efforts, fill gaps, etc (What do you do well and what does he compliment).
My partner is better at making connections and relationships than I am. I’m more analytical and investigative. He’s an eternal optimist, while i’m Mr. Engineer worst case scenario. He can get shiny object syndrome whereas I’m much better at keepings things on task. We’re both at the same level/point in our investing so we have a good synergy with the perspective we’re coming from. One of the things we like is if it takes looking at 100 deals to get 1, maybe us both looking cuts that in half lol.

2) What is your Han Solo moment…

I had two.

1- One was a couple years into my career and i started think there was more than this for 30-40 yrs and began exploring other stuff (as mentioned before)

2- Shift from single family to multifamily. My a-ha moment mentioned before.

3) Worst life/business moment what did you do a er? Lesson learned?

I’ve had those crappy issues that come up with rentals, like plumbing issues, tenant issues, foundation issues, etc which sucked. Although one big one was not listening to my wife about a single family house. I had a tenant turnover in one of my rentals and I had been mulling about selling and focusing on multifamily. Instead of listening to my wife who encouraged that, I did the easy thing which was find a new tenant. I had gotten so in the routine and it was the easy option even though I knew I was ready to step into next thing. It ended up being my worst tenant ever (she paid but was really needy) and a headache. I ultimately sold it a few months later.

Lesson learned: Listen to your wife more. While she isn’t involved directly in the nuts and bolts, she is a better judge of character and intangibles in both myself and others.

4) Current 2‐week experiment and 6‐month project? (90‐180 day goal) A mark of a high performer is to put your ego aside and accept the help of others and mastermind maybe folks can help you by you asking.

2-week: Let’s see when we get there. Lot of personal type things likely going on (not sure if that’s valuable for your audience?)

6-month: Sponsor a 75+ unit, class b/c apartment. That’s my one thing.

5) What is your simple passive Cashflow number? Now imagine you had 2x that amount… Describe your ideal day, detailed rou ne, and what projects you are working on.

6) Something that you have recently or thought about “burning your cash” on for me savings or an improvement in quality of life.

Meal service, not the recipe in the box but the fully prepared, proportioned individual meals. I enjoy cooking but not thinking about what I have to eat is something that I find makes my day easier, especially now that I have a baby. It’s just fuel, i can eat the same thing everyday and be fine. Plus it helps me stay on the straight line nutrition wise.

There’s a good book on this topic called Happy Money I recommend.

7) Something that you changed your mind on? Our ego o en gets in the way of greatness.

2 Things:

1. I used to think of insurance for the financial aspects only but now I think about the riders, disability kickers, etc. Having a kid changes your thought process so now i’m more thoughtful about things like insurance, estate planning, etc. I’m still behind on that stuff, but now these long term planning things are in my thoughts.

2) Owning a house isn’t a big deal. We recently sold our house and moved to an apartment for a number of reasons…yada yada yada. I’m not full Grant Cardone though.

8) In this sellers market… what are you inves ng in? What should a someone who does not have a substan al level of cashflow yet be inves ng in?

My cash value life insurance/infinite banking strategy is my core foundation. I see that as the warchest and can let me sit on “cash” without losing too much. I’m obviously still actively pursuing multifamily, it’s harder of course with the current market, but deals can be found in all markets.

Nothing wrong with being patient if you think things are frothy. 100% of nothing is better than any percent of a bad deal. Being patient is the hardest thing.

brent@hellomultifamily.com

Podcast #107 – Fundamentals – The MFH Broker who takes flowers to 80-year-old ladies and the brokers point of view from Mark Allen

YouTube Link: https://youtu.be/25UY_v17bt4

Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math! Here are the Show Notes:
Mark Allen is a broker
Started in 2009 and went to Westpoint Academy
Got a $35k loan to get started in FL
Started with subject to or assuming the loan method of acquisition
2015-2016 sold initial properties and started flipping properties while working the day job
lead to MFH
Saved the money from flips and day job to go into MFH
You can find Mark at SVN and check out his podcast
ROI on time is more for Commercial than residential
Provide value by driving properties, pictures, transaction beat
Yadi matrix, co-star offer owner data
Face to face is better than email or phone
Bring 80-year-old sellers flowers
once or every two months a touch point with some value
As an investor go right to the broker and all of them
CCIM is a higher level designation (but that’s your job as an investor to know what a deal is)
Loopnet/correct C is a good way to find active brokers who are perhaps hungry
SVN, Marcus, Colliers, JLL, CBRE are popular brokers
Call brokers and introduce yourself
Share pitch deck with broker and share team so you show that you are credible

Podcast #104 – Interview – Brad Tacia – Mechanical Engineer transitions from SFH to MFH

YouTube Link: https://youtu.be/Z0SM21dLsCc

Text “simple” to 314-665-1767 to get access to the Hui Google Drive files and the 2018 Rental Property Analyzer

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math! Here are the Show Notes:

Doing one house gets you started to gain momentum
Han solo moment was went when into MFH
At first wife was nervous in the beginning but with success came on board
Moved to MFH when had 5 units and 2k in cashflow
SFH is the way to go to learn to rent and pick out a property manager but its a personal question
Worse moment was seeing 2008
A pain point that forces people to make a change
Working up to expenses plus 20k
Do a little bit each day
Set goes every year – 40-50 goals – review once a week
Personal Background
Grew up in Oxford, Michigan
Graduated from General Motors Institute/Kettering University in Flint, Michigan in 2000 with a Bachelor’s in Mechanical Engineering
Married to wife, Lindsay and have 3 kids together
Started engineering career in 2000 and progressively moved up in position and responsibility to an engineering manager
Currently a program manager for automotive supplier Brembo

Real Estate Projects
Purchased primary residence in White Lake in 2008 as a foreclosure and rented out old primary residence in Madison Heights – “accidental landlord”
First intentional rental was a 3 bed 2 bath house in Waterford in 2011, added 3 more in Waterford from 2012-2014
Bought 12 apartment units in Monroe, Michigan in 2015
Bought 12 more apartment units in Monroe, Michigan in May 2016
In due diligence on a 63 unit apartment building in Lansing, Michigan
Goal is to retire my day job 2 years from now. From there, options I am looking into are real estate syndication and home inspecting

Success Habits
Keep a quarterly finance sheet to keep track of Net Worth, Assets, Liabilities, Income, & Expenses
List out yearly goals for family, finance, health, learning and track each week
Make sure to do things daily to get closer to goals
Dave Ramsey
Lifestyles Unlimited
REIs for networking
Checklists
Books
Millionaire Real Estate Investor – Gary Keller
Rich Dad Poor Dad – Robert Kiyosaki
The Complete Guide to Buying and Selling Apartments – Steve Berges
48 Days to the Work You Love – Dan Miller
What Color is Your Parachute – Richard Bolles
The Slightest Edge – Jeff Olson
Compound Effect – Darren Hardy
Quotes
“Leverage is key to wealth” – In regards to money, time, knowledge
“Money is on the other side of fear”
“Most people overestimate what can be done in the short term and underestimate what can be done in the long term”
“If you give a house a cookie…”
“What gets measured gets done”
“Spectacular achievement is always preceded by spectacular preparation”
“Those who say it can’t be done should get out of the way of those doing it”
“Go as far as you can see, once you get there, you will see farther”
“Play the game of money to win, don’t play not to lose”
“Don’t quit when you are tired, quit when you are done”
“Make sure your ladder to success is on the correct wall”

Contact Info
Email: bradtacia@gmail.com
Facebook & Linked In – Brad Tacia
Facebook Page – Apartment Investors of Michigan

Podcast #102 – Starting from nothing + Losing an Apartment + Transitioning from Active to Passive Income with Pat Hiban

YouTube Link: https://youtu.be/dSNwXUhxpLE

 

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Download the FREE 2018 Rental Property Analyzer for free: https://simplepassivecashflow.activehosted.com/f/14

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math! Here are the Show Notes:

$480k horizontal income
Podcast is not simple passive cashflow
Used commissions to invest into real estate
Started out trading tome for money, working 40 hours a week, and was left with a $100 every week
Sold timeshare presentations
Danny got 3-4 of these a day and was the leader at the time and Pat beat him
Went to college and went to real estate sales where he is making commissions
Discovered horizontal lines – bought SFHs and moved to apartments and other buildings/businesses
Lost 2/3 of initial investment
LTI – After you pay your bills – currently $200K a year
Moving around current investments
18% lawyer loan, some private equity notes, apartment building syndication
Crossed over at age 46 to financial freedom number
Works 3 days a week (Tuesday-Thursday)
Chose to not work as much in 40s
Look where the poor creative lives because that is where the transitioning area is
Robert Kiyosaki says don’t buy where there are crane
Alchemist talks about the beginner’s luck – Pat started investing in non-real estate investments in 2008 – 50-100K here and there and 50% of them failed
Rip and duplicate things that are working
Real estate rockstar podcast!

Podcast #97 – Investing via Crowdfunding Sites to open the country club – A Chat with Reality Shares

Here are the Show Notes…. But first please leave me a review: http://getpodcast.reviews/id/1118795347

Reality Shares came from the Jobs Act
April 2013 Reality Shares began
Accredited only
14-20% Class B MFH estimates
Also have preferred equity options 10-14% IRRs
1st lien debt or 2nd lien 7-12%
If you are not connected Crowdfunding options
From a syndications view, they are charged an origination fee
1% asset management team (from cashflow) from reality shares
1% Funding Fee, 1% Asset management fee
Some crowdfunding is taking equity upside
Due diligence – credit checks, background checks, 3rd party check of purchase price verification, then look at the deal (market, pricing)
Less than 5% of deals make it to the platform
There is a max the crowdfunding site with one syndicator (2-3M) to diversity risk for the firm
Reality Shares is a Broker-Dealer