Co investment Howto?

[from online forum]

My relative in china has $50K cash. I do not have any cash, but I can get a loan.
We want to co-investment a house something like $220K.
How can we divide our owner percentage ?  The total cost is based on $220k or including the interest?

One good answer:

1. if this is your first investment house, think twice, because there is no easy way back.
2. if you insist to do it. check the numbers three times.
3. if you still think you can make a killing, form a LLC.
4. you should treat 50k as 2nd note, paying interest to your friend.
5. you pay yourself a reasonable management fee for your time.
6. when you sell, split the profit as to article of incorporation. its all about negotiation.

Roof numbers

[from online forum]
22 SQs, $2000 ~ $2500 material, $3000 Labor (another two quotes: $11000 and $9000!)

5SQ: $390 Materials, $160 Labor
(at menards, 3in1 shingles, 15$ a bundle, architectural shingles, $26 a bundle. today I used architectural, 5 sqs, $390)

Dividends Don't Lie

[from online forum]

I'd like to recommend "Dividends Don't Lie" by G. Weiss and "Dividends Still Don't Lie" by K. Wright. I read them last year and was very impressed.

Their method is to buy blue chips at discount. Dividends serve investors not only as income but also a metric for valuation.

The major argument is that dividends are announced in advance by companies and actually paid out. Unlike earning or even free cash flow, dividends do not lie.

The board members are the ones that really know how their firms are doing. They are not likely to raise dividends only to fail to deliver, especially for the long-established firms with a history of paying out.

Last, the current yield can be used against historical patterns to provide good valuation.


Enjoy and judge for yourself

Landlord Lawsuit Prevention - How To Avoid Litigation

Landlord Lawsuit Prevention - How To Avoid Litigation
By: Kevin Kiene

Why can't we all just get along? Because greed is part of human nature, and where there is greed, there will be someone who would rather make a quick buck through an easy lawsuit than actually create something of value.

Enter: landlord lawsuits, bane of our existence, and serial in nature since everyone just loves to hate landlords, under the false assumption that all landlords are miserly and rich. There are ways to minimize the incidence of these lawsuits, however, without offshore accounts or complex legal ownership structures.

Landlord Lawsuit Prevention Strategy 1: Lead-Based Paint

You can't win a lead-based paint lawsuit. Say it with me: "I can't win a lead-based paint lawsuit." The tenants kid has a friend over, and it happens the friend has lead poisoning, they can sue you and win. The tenants shove lead-based paint chips in their own kid's mouth (don't laugh it happens), they sue you and win. With me here? It is impossible for a landlord to win a lead paint lawsuit.

That's the bad news. The good news is that there are ways to minimize the likelihood of one occurring in the first place. First of all, you MUST comply with all lead-based paint laws in your state. This probably means a lead paint inspection in between every tenant, and providing a series of lead-based paint disclosures to the tenants when they sign the lease agreement. I can tell you right now that families who like to sue prefer the easiest targets: landlords who don't follow lead-based paint laws to the letter. By showing fastidious attention to detail, you can send a strong message.

A final note: health problems from lead-based paint occur when very young children ingest the paint chips. This means that, if you have an applicant with children under six years old, you should take extra precautions to check their legal history and see if they've ever been involved in a lawsuit (particularly a lead-based paint lawsuit). Beware of serial litigators; they'll take you for all you're worth, and then some.

Landlord Lawsuit Prevention Strategy 2: Mold

I'm sorry, but toxic mold as a national health hazard is a myth. Yeah, yeah, yeah, I know toxic mold can make people sick, but genuine cases of toxic mold sickness are EXTREMELY rare.

Now for the bad news: it doesn't matter that it's not a common risk, because the public believes the fear-mongering campaigns that the media has used to score ratings. This means that you can be sued for toxic mold poisoning, and you'll probably lose.

So what can you do? Prevention, prevention, prevention, starting with choosing rental properties to purchase. Look for any evidence of water infiltration, or leaky pipes or ducts. Be aware of any water problems in the property before buying it, and make sure you correct them before signing a lease agreement. You should also consider having a mold inspection performed prior to signing the lease agreement, by a licensed toxic mold remediation firm. When you do sign the lease agreement, make sure to add a clause into it that tenants are responsible for informing the landlord or property management company immediately if they notice any signs of mold growth, to put some of the responsibility back on the tenants.

Landlord Lawsuit Prevention Strategy 3: Make It Personal

If you take nothing else away from this article, take this away: tenants are far less likely to sue landlords that they know personally. You ever hear people say "Hell, they don't have to like you" WRONG! They do have to like you, because who wants to sue someone that helps them fix their resume, or sends them Christmas cards every year? Time spent getting to know your tenants on a personal basis is time well invested, and is both the easiest and most effective method of preventing landlord lawsuits.

Being an absentee landlord is a guaranteed way to find yourself in the middle of a lawsuit. Instead, be proactive, show some initiative, because with a little effort you can prevent lawsuits before they even occur to your tenants.

Read more: http://www.articlesnatch.com/Article/Landlord-Lawsuit-Prevention---How-To-Avoid-Litigation/492822#ixzz1gU3UwYCX
Under Creative Commons License: Attribution No Derivatives

REIT: HCN

HCN Dividend 5.7%,  Average return 14% （1992-2011）

Success Story: Can you get rich by Real State? - yearend update of an old post..

[From online forum]

haha, can one get super rich by investing RE? the answer is NO, there is only one Donal Trump, but can an average person be financially free by investing RE? the answer is difinitely yes.
compare to most people, I am not a smart person, I don't have an post graduate degree, just a average guy can easily get lost in mountain people mountain sea.  but I can happily say, I am near the point of financial freedom, and for that, I think I am way better off than 95% of the people, will I get to 1%? maybe not, my goal is only 10 mil.
there is no secrets in RE investments, time consistency and scale. I believe scale is very important, it can further reduce per unit overhead, lower average management cost, increase occupancy rate, and achieve better cash flow.
today, I hold a porfolio of 9+ mil, own and manage 134 units, with 50% leverage rate, 3 full time workers, life so far, is beautiful.

2008-07-17 19:25:30

I had been involve with RE since I got out of college, it is by far the best tool to accumulate wealth that I know.

My profession by trade is ex-day trader(10 years, did make some and did lose a lot, thanks to Amzon, Lu, Exds and some others), now Fulltime Super DAD( don't pay alot but the fun is priceless ), small business owner(pays good but getting up at 9 is hardest part), part time bill collector(goto court once a week minimum go after deadbeat tenants), and the rest of my spare time, RE.

I involve with many phase of RE, from land development to construction to we all know what - LandLord, Landlording is not the easiest task, most Landlord give up after a few units, because the time and money they had to spend on it, what they don't know is there is light at the end of the tunnel, the more unit you have, less headache you have because you can then hire out, basically yes, economic of scales.

Leverage is the a important tool, but it is also the biggest barrier, Fanny Mae used to limited 10 mortgage per SS#, and now I think they lower that to 4 mortgage, so we have to do some creative financing, there got to be 100s of book on this subject, you just have to learn it and convince people and make it work for you. I am not talking about unlimited leverage, I am talking about controlled leverage, a leverage you must comfortable with, off my 7.4 mil portfolio, I personally invested less than 100k in it, the rest of money are from refi, rehab, land sale and flipping.

1. my avg per unit value at apartments 50k, duplex to 4plex at 75k, SFH range from 80k to 200k. My cost are much less than that, because more than half of them are once bank own REO, I buy them less than 50% on market value, rehab then refi at 75% and I pocket the cash. (I know, this is sub-sub-prime, and this is how the banks lose all the money)

2. my avg mortgage is less than 40k per unit, but I carry a higher interest rate ( mostly at 6.75 but some are as high as 7.875 ), to me, even 10% is cheap money if there is money to be make.

3. Property tax rate is 1.6% (120/7400), yes

4. Monthly rent avg $550 - close, some 1 bedroom unit low as $375, some SFH is high is $1750.

5. my area has a few world class orthopedic company around, so the avg appreciation is better than other area in Indiana, house under $150k still appreciated 10% last year, while overall market here is 3% to 5%. so cheaper houses has its own advantages.

6. my avg net profit per unit is about $100 per month.

thanks everyone for reading

Income, Poverty, and Health Insurance Coverage in the United States: 2010

http://www.census.gov/prod/2011pubs/p60-239.pdf