I intentionally arrived late to the meet and greet portion of the meeting, as I really wasn’t in the mood to speak to or see anyone. The first presenters were two mortgage brokers. I had seen them before and they talked about all the buying programs they had access to through the banks they work with. Unfortunately for me, none of their programs had anything to do with commercial property purchases, so I kinda tuned them out. The only tips I took from their presentation was:
- Appliances, no matter how expensive, do not add to property value
- Most good programs for investors usually require at least two years of landlord experience that are filed on tax returns (tee hee hee)
- When thinking about being approved for a loan, look at both sides of the coin. Makes sure my application makes sense to the bank
The next part of the meeting was a poorly executed webinar with some guy who runs an organization that offers discounts on services that landlords usually need. If we were members, as croup president Carla pointed out, we would get free membership into that organization as well. I liked the idea of the 30% off paint and discounts at Home Depot, but I still wasn’t completely sold on becoming a member. But then the next presenter came up. And this guy was… wow.
The next presenter was a guy we’ll can Donny. Donny’s business is unique, in that he doesn’t actually spend his own money. He gets investors to go into business with him, and here’s how he does it. He finds an investor who he trusts and vice versa, and uses their money to buy a property (in cash, of course). Donny buys it, puts the property in the name of a partnership LLC, and then manages the place. The investor gets a cut of the monthly profits, while Donny manages the property and takes the rest of the cut. Example? Okay. Donny gets an investor to give him 100K. Donny uses that money to buy a property that will yield $1500 a month. Donny promises the investor $500 a month, while he takes the rest for both profit and property maintenance. The investor loves this, because he’s getting a 6% annual return on money that was just sitting in a bank or in a CD making a max of 2%. The investor also gets that coveted tax-write off that rich people love so much. If things go well, the investor gives Donny more money to buy more properties, and Donny is now much richer and didn’t have to spend a dime out of his own pocket. As of now, Donny has over 200 properties with eight different investors. One can imagine just how much money this guy makes every year.
So how do I find an investor who has all that money and is willing to trust me? I dunno. While mentioning that they should not be local and should be rich enough to see the value in investing in that manner not only for the percentage return but also for the tax-write offs, Donny didn’t have a good answer for how to actually find investors like these. Most of his investor friends were his military buddies, so it was easier for him. He said we can look around and see friends or family members that have a lot of money saved up. Oh really? Sorry, I don’t see Brooklyn Mike or Nino stashing $500K away for a rainy day. The only person I know who has a fair amount of money in his bank account is Roy and… hmm. You know what? I have to write another post and get back to Donny. I’ve been staring at the screen because my mind is drifting on a subject that just came up. I’ll continue this in a Part II or something…
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