Podcast#92 – #LaneHack – Coaching & Group Coaching Programs

Fill out this intake form and Email Lane@SimplePassiveCashflow.com

More details: SimplePassiveCashflow.com/coaching

 

Coaching packages including everything Lane knows and following elements:

Pick the path that is right for you:

    • Buy Hold Rentals
    • Remote Turnkey Rentals
    • Go big with Apartment Investing
    • Decoding Syndication as a Limited Partner
    • Raise money from others and Syndicate
    • Building a team

 

Find & Analyze deals

    • Be able to point out Sucker deals for “Californians”
    • Underwrite the property conservatively via cashflow analysis
    • Get every dollar on the table in the due-diligence period and punch list negotiation
    • Get the best financing option with Lane’s preferred lenders
    • Leverage Lane’s Deal-flow and Rolodex

 

Put it all together

    • How to setup your personal systems to not go crazy
    • Balance with your full-time job
    • Optimize taxes with my best practices and the proven professionals to advice you
    • Best technology to use
    • Learn the investor mindset and remove limiting beliefs
    • Future goal setting and clear 5-year plan after our program is over

 

Other possible scope of services

    • Growing your brand
    • Syndicate big and small deals
    • Start your own podcast
    • Internet marketing
    • Networking the right way

More details: SimplePassiveCashflow.com/coaching

Are you stuck holiday shopping?

Sitting around waiting in lines or family to finish holiday shopping? Here is some good reading?

https://www.cnbc.com/2017/12/14/older-wealthier-americans-are-the-new-renters.html

https://www.realpage.com/mpf-research/leaderboard-annual-permits-remains-largely-unchanged-october/

https://www.axiometrics.com/resources/axio-media/blogs/marriage-family-household-statistics-could-help-explain-propensity-to-rent/

http://www.nreionline.com/multifamily/has-multifamily-market-growth-been-stronger-urban-or-suburban-settings

https://alndata.com/multifamily-floorplan-distribution/?utm_source=December2017Newsletter&utm_medium=Email&utm_campaign=Read+the+Article

Like this type of content? Please email to a friend! Want to join the closed Facebook group? Use this link to setup a time to chat: https://calendly.com/simplepassivecashflow/20

Defaulting on my mortgage & Credit Score Impacts

I recently attended a local real estate Meet-up and there was a talk from a lender. Instead of wasting your time traveling there and inevitable fluff in these meetings… here are my takeaways from Credit Score SME presentation… 

1) Previously 50% utilization on each credit card (not an aggregate of all cards) is now 30% to have an impact on the score. Things are getting stricter.

2) They now look at “payment acceleration” meaning paying the minimums every month is looked down upon. Might want to pay 50 bucks one month then 55 then 60 then 65…

I recently had the experience of missing the payments on two of my mortgages and went into default for 30-60 days and got register mail sent to me for being a naughty boy. My autopayments got backed up and the mail got sent to my old address in the move to Hawaii. Things are fine now and I got everything caught up. In the end, I saw my score take a 60 point hit, but I don’t really care because for commercial loans it does not really matter what your personal fico is. It just can’t be terrible. And by the way I got caught up and saw some of my credit card interest rates go up.

credit score

After

A lot of you guys who book a call with me are using HELOCs to purchase more properties. The optimum credit score for that is 620.

Also wanted to thank you all for the support this year and wanted to give people of big plans for 2018! 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. Please email the website and podcast to a friend. And remember If you or someone you refer invests at least $50K into one of my future deals you will be invited to my exclusive Ali’i Mastermind with other 12-20 other serious investors to discuss deals and our own portfolios.

Mark Ferguson interviews me on Investing in Out of State Properties

Hi guys, I figure you are tired of hearing my voice but I was recently on Mark Ferguson’s podcast. He is killing it in Denver as a home flipper and doing it right by putting part of his earnings to cashflowing rentals… Here is the post from Mark’s website below:

Lane Kawaoka is my guest on this week’s episode of the InvestFourMore Real Estate Podcast. Lane is a full-time engineer but also loves to invest in real estate. Lane has always worked on the west coast or Hawaii, where it is really hard to find cash-flowing rental properties. He has had to invest out-of-state to find deals that made sense to him. On this show, we talk about how he first got involved in real estate and how he both bought houses from turn-key companies and on his own. We also talk about what his current goals and how he is changing his investing strategy.

Click the green button below to listen to the podcast

How did Lane first get involved in real estate?

Lane graduated college and became a full-time engineer about ten years ago. He wanted to buy a primary residence but had to save up money to afford properties in his area. He finally bought a house for himself, but it was not as great as he thought it would be. He was always traveling for work and never had a chance to enjoy his home. He decided to rent out the property, and that became his first rental.

How to use house hacking to buy rental properties.

Lane realized he loved the passive income that his rental property provided, and he decided to keep buying rentals. He bought a duplex in Seattle for $250,000. That duplex rented for $3,000 per month and was also a great investment. The problem he ran into was the market exploded in Seattle much like it has in Colorado. His duplex was worth $400,000 a few years after he bought it, but rents had barely risen. Finding any good proprieties in the Seattle area was really hard.

How to invest in rentals when prices are high.

How did Lane start investing in out-of-state rental properties?

Lane knew he could not invest in the Seattle market any longer, so he looked into turn-key rentals. Turn-key rentals are properties that have already been repaired, rented out, and have property management in place so that investors can buy a property and start making money immediately.

Lane bought a property in Birmingham Alabama for $70,000 that he rented out for $850 per month. Lane bought a few more turn-key properties and then started to buy properties himself with the use of agents and property managers.

How did Lane make sure he bought good turn-key properties?

Lane has a number of tips for people looking to buy turn-key rental properties:

  • Get a 3rd party to check out the neighborhood and area if you are not familiar with it.
  • Don’t be afraid to find your own property management company.
  • Sometimes, buying properties with a loan can be a benefit because you need to get an appraisal that will confirm the value.

I also think people looking to buy a turn-key should not be afraid to get an inspection done on the house. You could even order a BPO to be done on the property.

How to complete due diligence on a turn-key property.

How has Lane bought out-of-state rental properties without a turn-key company?

If you want to buy out-of-state rental properties on your own, it can be tough, but it is possible. The problem with many turn-key companies is getting a good deal is very tough. If you can find deals yourself, you may be able to make more money. However, you need to find:

Lane has bought a number of properties outside of his areas without using a turn-key company. He said the key to pulling off the investment was finding a great property manager. If you can find a really good property manager, they can help you decide where to buy properties and what they will rent out for, and they can help you find contractors and agents.

How to invest in out-of-state rentals.

How can you contact Lane?

Lane loves to help others invest, and he is also working on syndicating large multifamily deals. Make sure you listen to the podcast to hear what his plans are with apartments and why they have become his focus over single-family rentals. You can find lane at simplepassivecashflow.com,where he has a podcast and many free resources for investors.

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Podcast#080 – Moving from Single Family to Multifamily Investing

Hey guys I’m about to get naked here… I am personally making a shift in my portfolio to MFH Investing and wanted to see if you could help me find a buyer for my stabilized 10 property 1.2M portfolio.. 10 B Class properties in Birmingham/Atlanta/Indy (rents $900+/month)

I have selected a few potential turnkey rental sellers, however, I wanted to leverage my network and see if we can cut the broker commissions out of it. I’ll give you details on how you can get the P&L for the past few years on every property but first…A few PSAs.

  1. National Save for Retirement Week: October 15 – 21, 2017
  2. Scam emails to get information from more and more wholesalers
  3. Insurance want 5% deductible

My story – bought a couple of rentals in Seattle and 1031 exchange those to 10 SFH essentially turnkey rentals out of state in Atlanta, Birmingham, Indianapolis.

The other day I asked the question on BP… did not get much of a response since BP is a platform for newbies or active investors who flip or wholesale homes. SPC is a platform with secret Facebook groups of profession W2 employees with some cash and little time on their hands.

https://www.biggerpockets.com/forums/223/topics/481347-crossover-point-for-turnkey-rentals-vs-syndication-as-a-passive

As I talked a few podcasts ago of a 10k repair, and multiple other headaches, my attitude for these SFHs are changing. Its kind of funny talking to the many of you that are setting up calls to get on the Hui Deal Pipeline Club to getting sent the deals I come across:

https://simplepassivecashflow.activehosted.com/f/3

Please go through the first 20 podcasts in early 2016 and love the story of this SFH buyer but then they are like WTF you are turning on us like a villain going to MFH.

“Find me an investor who has 50 SFHs and I will show you an investor who was invested under a rock and stoned himself to death with said rock” -Archimedes

After over a few hundred investor consultants over the past couple years here is what I tell W2 employees. For those who are able to save more than $30k a year or have substantial liquidity (over 200k), being a landlord and especially flipping is a lot of work. If you like it cool… but just remember why we got into this… To be free from a JOB. Directly investing in a turnkey rental or small MFH is a good way to start to learn and build up the war chest to go into my scaleable investments such as private placement syndications. Whatever you do, try to be as close to the investment as possible. This is the fundamental problem I have with Wall Street who takes too much fees off the hard working efforts of the middle class.

The straw that broke the camels back…

One of my Atlanta properties went over a changeover, tenant went MIA, went through process to evict – always start the time clock. Armed sheriff had to go and remove items on the street, dead cats were found, $5000 just to remove items, concern over the property could have been condemned. I got Proserve out of Atlanta to go in with radiation suits to clean it up, got a bill for $27K, wtf, some of the scope items were a little ridiculous like 500 dollars for gutters, 5000 for paint, and siding etc. I had them re-estimate it to give me the “dude I’m not a rich idiot price and got it lowered to 20K.

There is no such thing as turnkey. Check out these disaster photos… https://photos.app.goo.gl/R4PZLuOLGHONO5Rl2

Tony Robbins says “Things don’t happen to you but for you.”

This was a sign from above which many of you guys hear from me that I sort of believe in. I was already mentally making the shift to making the move. Going down the quote from the repair company it was clear that a lot of the scope items were a bit excessive and the pricing was inflated. This was to be expected, for example paint on rooms that did not really need painting for $5000 or new gutters cleaning for $500.

If you want to see this document. Please leave me an iTunes review or send me an email referral to a friend and i’ll send it over. Lane@SimplePassiveCashflow.com

Stages of trauma… denial, anger, sadness, motivation.

What I know now I am able to now only make a high yield but a fraction of the effort. None of this screwing around sending docs to my lender in the evenings for a couple months to get one dinky SFH to cash flow a couple hundred dollars a month then do it all over again 20-50 times… then to have it all taken away with a large capex or turnover repair.

Tony Robbins says “You destiny is shaped in your decisions.”

We waste so much time making decisions. A lot of people myself included get shiny object syndrome when really its an excuse.

This was my hero moment or burning of the boats moment to leave the security of a few thousand of passive cashflow a month to go liquid for a while. Hopefully Amazon will announce that Atlanta will be the new second HQ on their quest for world domination.

One drawback about selling is about repaying a lot of depreciation recapture and capital gains going back all the way from 2009. As you remember I traded my two Seattle properties for the majority of these rentals via a 1031 exchange. This is why I am not a fan of a 1031 exchange no matter what you hear on a surface level on other podcasts. Another reason to keep listening and please do me a favor and share it with friends because we go deep on this stuff because I’m learning everyday. I’ll repeat I don’t like 1031 exchanges because many of us are going to graduate in large syndications and that is not a like kind exchange. Executing a 1031 most likely means you are going into a lukewarm deal and lose all your negotiation power as a buyer. But i’ll expand on this at a later date.

Picture of my back of envelope tax hit

I want to be very clear… If you are not an accredited investor, sophisticated, or have a large sum of liquify… single family homes is the starting point for you. Too many call me with lofty goals and have list of pro’s/con’s of MFH vs SFH, but you need to know the basics before you screw up the big stuff. You have to pay your dues. Set that barrier to entry lower because most people won’t do anything.

That said for a limited time I invite you listeners to make offers on my portfolio of SFHs “Lane’s Pac-10”. List price is 1.2M right about 1% Rent-to-Value Ratio (More info –http://simplepassivecashflow.com/podcast-3-rent-to-value-ratio/)

I figure it was only fair if I showed you my naked photos… I mean P&Ls that you take a few minutes to complete a form with your investor profile on.

And if you are listening to this after 2017 and would like to see how frequency of rental checks, vacancy, late payments, repairs, cap ex across all my properties please leave me an iTunes review or send me an email referral to a friend and i’ll send it over.Lane@SimplePassiveCashflow.com

Mastermind Club: If you or someone you refer invests at least $50K into one of my future deals you will be invited to my exclusive Ali’i Mastermind with other 12-20 other serious investors to discuss deals and our own portfolios. SimplePassiveCashflow.com/mastermind

Podcast #071 – Fundamentals – Recent Setbacks in my Rentals

Setbacks in a rental investment merely teach you about yourself or the systems you use.

Wait, catch yourself if you are feeling sorry for me… Setbacks in a rental investment merely teach you about yourself or the systems you use. It is an opportunity for growth! And in real estate is a capital improvement that is bolstered in the future.

Rental Investment Costs incurred to date are as follows:

Attorney’s Fees                                $268.30

Eviction Services                              $1,310.00

Total                                                  $1,578.30

Haul, Disinfect & Clean                   $4,800.00

Total                                                   $6,378.30

(Less) Security Deposit                     $1,295.00

Total Out-of-Pocket Exp                   $5,083.30

Always underwrite and double check you have the buffer!


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Podcast#56 – Interview – Sep Bekam – W2 Electrical Engineer never looks back and why he does SFH and not MFH

Sep Bekam is a full time real estate investor and was able to get out of the rat race when he was 31 years old. He currently invests in 4 states and has acquired a portfolio of 50 houses and 80 apartments with his investors. Sep has been interviewed twice on the Real Estate Guys Radio Show and recently co-founded a real estate crowdfunding company. He enjoys helping other investors avoid making the same mistakes he did when he first started.

Quitting your job frees up so much time to progress business
2009 came around and getting fired was the best thing!
Oh no investing is stocks like Washington Mutual

1) How much simple passive Cashflow are you making today and how are you doing it?
(You don’t need to give a number if you would like privacy. You can be vague such as halfway to quitting my job, cover my mortgage, Make 25% of my expenses, over $10k, although people like when people open up the kimono.)
• Six figure range
2) What is your Han Solo moment – Han Solo and his buddy Chewbacca from Star Wars were cruising around the galaxy as lowlife smugglers but then cross paths with Luke and Leia and his life took a pivot point. Describe the resistance that was the catalyst for change. Did you “burn the boats” or did you let it happen naturally – was there an internal (you decided to make a change on own – what was thought process?) or external (you got fired) trigger?
1. Live in Orange County, California
2. Love to travel, paintball, attend seminars
2. Went to school for electrical engineering because that’s what I was taught
4. Started working and felt like Office Space
5. Was very stressful, 2008. Recession hit, I had a nasty, egotistical boss (also an engineer)
6. I was told when to go to work, when I could take a break, when I could eat, and when I could see my friends and family.
7. And then I was laid off after 4 months. I go to school for 26 years to be laid off after 4 months
8. Then went on to pursue masters in robotics
9. Cousin introduced me to Robert Kiyosaki’s book called Conspiracy of the Rich
10. Fell in love with real estate investing. Found podcasts
11. Big influencers: Real Estate Guys (Robert Helms & Russell Gray), J Massey, David Lindahl, Ken McElroy
12. Got the cash flow bug. I wanted to own apartment buildings. I thought it would give me freedom so I could stop trading time for money.
13. Tried investing in OC but nothing cash flowed. Then I began searching for markets that had properties with better cash flow. Everyone told me I was crazy and I should invest locally
14. Bought my first 2 properties in Phoenix. Two 4-plexes.
15. Evictions, broken windows, bleach on the carpets, management excuses, etc. while working full time job
16. When I started investing, I made virtually every mistake possible: overpaid for properties that appraised low, meth labs,
Robert Helms: “Live where you want to live, invest where the numbers make sense”
• Investor Identity – Why does it matter?
• Marketplace: How to find good emerging real estate markets
• Team: Team includes: Property Manager, brokers, leasing agents, evictions Attorney, contract review attorney, Mastermind, insurance brokers, public insurance claims adjusters, CPA, tax attorney, securities Attorney if you are raising capital, etc.
• Deal:
-Self managing vs.hiring a property manager. Managing the Manager
-If I fail, it’s my fault. If I succeed, it’s because of my Team.
Why I am focusing more on single family rental portfolios than apartments?
• When the crowd is going one way, there is a lot of opportunity in the opposite direction
• Gurus often compare owning 1,000 apartments to self-managing 1 house
• Why not manage your houses like an apartment complex?

3) Worst life/business moment what did you do after? Lesson learned?
-When a bank tried foreclosing on one of my apartment complexes…even though we never missed a mortgage payment.

4) A mark of a high performer is to put your ego aside and accept the help of others and mastermind. 2 week experiment and 6 month project? (90-180 day goal) Perhaps people can help you out? Any secret habit to share?
Secret Habit #1: Fast way to underwrite deals: 1.5% rule
Secret Habit #2: Surround yourself with investors that are ahead of you. Not the talkers.
Secret Habit #3: Investor Identity

5) What is your simple passive Cashflow number? Now imagine you had 2x that amount… Describe your ideal day, detailed routine, and what projects you are working on.
• Simple Passive Cashflow number: $50,000/month.
• Double that: $100,000/month
• Travel to Europe 6 times a year. Underwrite deals while living in Lake Como, Italy for 3 months.

6) Something that you have recently or thought about “burning your cash” on for time savings or an improvement in quality of life.
• I could hire more employees, expand the team, invest in additional marketing to be able to help, teach, and create 1,000 millionaires per year.

7) Tony Robbins identifies two large concepts that we are continually struggling to gain perfection at: #1-Art of Fulfillment and #2-Science of Achievement. If you died tomorrow and this was your final words of wisdom, what is your secret to the “Science of Achievement?” And “Art of Fulfillment?” How you do contribute back?
At the Unleash the Power Within seminar, Tony talked about the importance of measuring all of the important aspects of life to ensure fulfillment:
Draw a wheel (circle) on piece of paper and divide it up into 7 or 8 spokes. In each spoke, write the following:
1. Finances
2. Relationships
3. Time
4. Body
5. Emotion
6. Mission
7. Contribution
Then shade each spoke from the center on a scale of 1 to 5. 1 being awful and 5 being excellent. When you’re done shading each wheel, you’ll notice that some areas might be a little bit off balance. Just like the tires on your car, if they are off balance then your car can’t go as fast or run as efficient. It’s important to make sure that the wheel is balanced.

8) Anything we missed and contact info if you would like anyone to get a hold of you. URL?
Facebook: Sepehr Bekam
Like Our Facebook: Real Estate Investing Quotes

 

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American Home Preservation (AHP) looking to close on their biggest pool of 799 homes

American Home Preservation (AHP) is a sponsor of the Simple Passive Cashflow Podcast. But more importantly, I personally invest money in the fund. It literally pays my car lease!

Watch 40-minute webinar here:

Highlights of the investment

  • You are helping people stay in their homes as AHP buys the loans from the banks and attempts to structure a more manageable payment schedule for the existing homeowner
  • AHP pays 12% a year. You get 1% every month like clockwork
  • I use it as an “Opportunity Fund” holding tank because of the liquidity
  • The interface is sleek… check it out

You can start with $100 bucks and then you can incrementally increase your investment however you want.

InvestinAHP.com