Would you be interested a real estate investment trust?

[schockergd]

Can you show us examples of such homes for sale?

Here's a real quick report on properties in one zip code that have sold since Jan 1st of this year. I'm sure there were more but this is just as a quick grab.

http://dl.dropbox.com/u/9427554/properties%20(1).pdf

Property #2 was sold in 2004 @ $150k.
#4 #5 #6 #7 didn't need any repairs. #8 was two detached working houses (people were living in them at the time of sale) for $25,000.

Where is this Circleville Ohio?

Not just there, most of my county & surrounding counties are like this.

 

[avatar33]

Homes in shitty areas.

That's the problem for me.

Would I rather pay 20k-30k for a home in a shitty area, and rent it to sketchy people that can cause all sorts of problems over time...

OR

Pay 100-150k and go to a nicer area where I can find quality renters that will pay on time and not destroy the fucking house.

 

[schockergd]

That's the problem for me.

Would I rather pay 20k-30k for a home in a shitty area, and rent it to sketchy people that can cause all sorts of problems over time...

OR

Pay 100-150k and go to a nicer area where I can find quality renters that will pay on time and not destroy the fucking house.

The thing is , it's all relative in the market.

In my case, the market is almost all homogenous because we're not talking about large metro areas with good areas & bad areas, we're talking relatively smaller towns without such areas. Just average areas, good areas, great areas.

Plus , would you want a 10% return on a "Good area" or a 20% on a "Bad area" if risk is mitigated in both cases?

In the case of the SFD I have here in town, I've had 3 months of late payments (by 2 weeks on average) since April 2007. No evictions, tenants do 90% of the repairs in the house, I just supply materials. Total market time between the 3 tenants I've had in there has been less than a week. (All for a house I paid $43k on).

 

[robbie222]

I got into rentals when they were giving mortgages away. I have 0% down on them. It results in awesome cashflow but no ability down the road to cash it out. At least, not for a while, I do have a 15yr loan on the apartment complex which is slowly getting some principal behind it.

As for 200k - I live in a area of the United States where 1400 square foot homes can be bought for $30,000 and rented for $750 a month. The great issue is that banks wont loan on a $30,000 house because Freddie and Fannie don't buy loans under 50k.
O

How hard are they to rent out? I have a few rental properties in real nice areas and they are always rented, but others I know that have them in shit areas have high vacancy rates.

I wish I had that cash-on-cash return here in Mass.

 

[blureach]

Why do you want to start a REIT as opposed to a private (real estate) equity fund? From the looks of what you are doing, I would think a fund is more simplistic and provides you more control.

*I am limited in my REIT knowledge

 

[productionhead]

btw shocker, you might be able to raise funds easily come 2013 with crowdfunding laws, check that out

 

[schockergd]

btw shocker, you might be able to raise funds easily come 2013 with crowdfunding laws, check that out

I am unaware of any changes to crowdfunding laws in 2013. The ones I read on the books as of this minute are terrible and would effectively limit me to 20 or 30 investors (I can't remember what the SEC limit is). I would LOVE to crowdfund, but as far as my understanding is, and talks to several legal guys it wasn't a option.

Why do you want to start a REIT as opposed to a private (real estate) equity fund? From the looks of what you are doing, I would think a fund is more simplistic and provides you more control.

*I am limited in my REIT knowledge

Technically, i'm not offering a true REIT corporation, I loosely use the REIT term because people know what that is. What likely would be done would be a LLC formation with passthrough benefits to partners/shareholders. Same tax-free benefit as a REIT, but much less paperwork and no 100 shareholder requirement.

How hard are they to rent out? I have a few rental properties in real nice areas and they are always rented, but others I know that have them in shit areas have high vacancy rates.

I wish I had that cash-on-cash return here in Mass.

SFD demand is always extremely high, which is why I Like them as opposed to apartments. I would rather take a SFD in a average area than an apartment in a good area. People who are looking for homes as opposed to apartments typically have higher living standards, and have higher pride-of-ownership (even though they don't own it).

Mass cap rates are around 7% to 8% last time I checked. Thus why I want to offer REI to people who don't live in areas with favorable cap rates.

 

[blureach]

I am unaware of any changes to crowdfunding laws in 2013. The ones I read on the books as of this minute are terrible and would effectively limit me to 20 or 30 investors (I can't remember what the SEC limit is). I would LOVE to crowdfund, but as far as my understanding is, and talks to several legal guys it wasn't a option.



Technically, i'm not offering a true REIT corporation, I loosely use the REIT term because people know what that is. What likely would be done would be a LLC formation with passthrough benefits to partners/shareholders. Same tax-free benefit as a REIT, but much less paperwork and no 100 shareholder requirement.



SFD demand is always extremely high, which is why I Like them as opposed to apartments. I would rather take a SFD in a average area than an apartment in a good area. People who are looking for homes as opposed to apartments typically have higher living standards, and have higher pride-of-ownership (even though they don't own it).

Mass cap rates are around 7% to 8% last time I checked. Thus why I want to offer REI to people who don't live in areas with favorable cap rates.

I see.
I was involved in something similar on my investments in Arizona. I didn't actually do any flipping myself.

Are you using the 50-200k to finance with hard$ or alternative finance routes?

 

[productionhead]

'The Jumpstart Our Business Startups Act (JOBS Act) became law on April 5, 2012 and requires the SEC to implement rules within 270 days to allow entrepreneurs to raise up to $ 1 million in equity from small investors through crowdfunding platforms.'

 

[KennyPowers]

If you don't have $50k of your own money to invest then you're obviously not someone I want to invest in. Come back when you have revenues.

 

[schockergd]

If you don't have $50k of your own money to invest then you're obviously not someone I want to invest in. Come back when you have revenues.

I've got a few HELOCs available to me as well as the possibility of using a HML to secure about $100k of startup financing, i just don't like those methods.

'The Jumpstart Our Business Startups Act (JOBS Act) became law on April 5, 2012 and requires the SEC to implement rules within 270 days to allow entrepreneurs to raise up to $ 1 million in equity from small investors through crowdfunding platforms.'

I talked to 6+ investors & brokers about crowdfunding this type of project. Every single one said that it was impossible under regulations that exist.

Crowdfunding would be my ideal method to do this. It would be much easier for investors and would allow me to deffer risk.

I see.
I was involved in something similar on my investments in Arizona. I didn't actually do any flipping myself.

Are you using the 50-200k to finance with hard$ or alternative finance routes?

Cash>Purchase>Rehab>Rent>Refi

I can do a cashout refi and get 75% LTV on a property, but it has to be repaired & rented out, otherwise banks are effectively loaning a fraction.

 

[Andrew Scherer]

As for 200k - I live in a area of the United States where 1400 square foot homes can be bought for $30,000 and rented for $750 a month. The great issue is that banks wont loan on a $30,000 house because Freddie and Fannie don't buy loans under 50k.
O

he is not lying - the "flyover states" are where investors are cashflowing rentals on a major scale afaik

I can do a cashout refi and get 75% LTV on a property, but it has to be repaired & rented out, otherwise banks are effectively loaning a fraction.

who does the repairs?

 

[schockergd]

he is not lying - the "flyover states" are where investors are cashflowing rentals on a major scale afaik



who does the repairs?

Initial rehab is by one of 3 contractor crews that I already work with (I sell bank owned properties on the side, so I've built up a few teams for this stuff already). Whoever gets the lowest bid gets the job.

For small repairs, I've got 2 or 3 guys that work for cash. Most of them work for $20/hr and do amazing jobs. They can take care of about 80% of problems, pretty much everything but septic & HVAC.

 

[galacon]

Are you seriously trying to raise investment capital for some retarded fucking Ohioan REIT here? On WF??

You must be the diseased offspring of an aids infected mongolian goatfuck, yes?

Stuff your under-spot silver and other "offers" in your ass, and fuck the fucking fuck off, mate. Peddle your bullshit schemes at Wafo, Dp, or BHW, I don't think anyone of any intelligence here wants to read this bullshit.

Goddam, I mean, REALLY?!

But hey, if you can actually GET some fucktard to invest with you, why not, right?

WRONG.

 

[schockergd]

Are you seriously trying to raise investment capital for some retarded fucking Ohioan REIT here? On WF??

You must be the diseased offspring of an aids infected mongolian goatfuck, yes?

Stuff your under-spot silver and other "offers" in your ass, and fuck the fucking fuck off, mate. Peddle your bullshit schemes at Wafo, Dp, or BHW, I don't think anyone of any intelligence here wants to read this bullshit.

Goddam, I mean, REALLY?!

But hey, if you can actually GET some fucktard to invest with you, why not, right?

WRONG.

 

[redmonkey]

Is $200k the max you'll take per person or per REIT?

 

[greenleaves]

He is just jelous of what we got going... can I just wire $50k to you right now?








Oh wait, I'm not retarded, so no thanks. Good luck finding someone on here who is.

 

[schockergd]

Just as a quick update, we became fully funded last week. A few had messaged me about this on here, but I'll be updating the progress of things at rentalstarter.com.

 

[AdamC]

If you're not a scammer, good luck.

If you are a scammer, good luck.

 

[blureach]

Just as a quick update, we became fully funded last week. A few had messaged me about this on here, but I'll be updating the progress of things at rentalstarter.com.

Congrats. I'll keep in touch as I decide where to put my next lump of drug money