Category Archives: Real Estate Investing

The topic for real estate investing

CAP Rate is determined by the cost and structure of financing

I wrote a short article about this over at LinkedIn. Click here.

Posted in General, Real Estate Investing, Time Value of Money | Comments Off on CAP Rate is determined by the cost and structure of financing

My thoughts on Bitcoin and cryptocurrencies

Bitcoin (BTC) has been hacked several times, mostly for “proof of concept” and not for nefarious intent. The algorithms for creating new BTC are now so difficult to compute that most BTC farmers are out of that business. The processing power to break the global BTC ciphering ledger is well within the reach of organized […]

Posted in Real Estate Investing, Time Value of Money, Wealth Creation | Tagged , , , , , , , , , , , , , , , , , , | Comments Off on My thoughts on Bitcoin and cryptocurrencies

Opportunity for Transactional Funding Lenders

Starfury Capital Management LLC is pleased to announce the opportunity for private financiers, credit unions, and banks to participate as Transactional Funding lenders for low risk, high yield investments. These investments are very short term, just one business day and offer 1% yield on the loan amount. Also, the lender only funds the loan after […]

Posted in Real Estate Investing, Wealth Creation | Tagged , , , , , , , , | Comments Off on Opportunity for Transactional Funding Lenders

Only Cash Flow Matters

2014 Q1 is almost over. The lamestream media says everything is rosy (yeah, right). The problem with a cliff, even a demographic cliff, is that it is such a sharp drop-off that most folks can’t see the cliff until they are teetering the brink, especially when they are moving fast and thinking about something else.
Two […]

Posted in Real Estate Investing, Time Value of Money, Wealth Creation | Tagged , , , , , | Comments Off on Only Cash Flow Matters

Crisis Investing in Real Estate

Booms and busts always happen. You can’t defy the Law of Gravity. What goes up must come down. Today, the real estate market is a Sellers’ Market in most areas. Most average folks view real estate investing as speculating in price appreciation. The real objective of real estate investing is passive positive cash flow.
The next crash […]

Posted in Real Estate Investing | Tagged , , , , , , , , , , , , , , | Comments Off on Crisis Investing in Real Estate

Preparing for another economic crisis

Housing prices will collapse with a nominal increase in interest rates. Get your financial calculator: N=360 (30 years), Rate=4% per year, PV=100,000, PMT=477.52, FV=0. Those are the numbers for a $100,000 mortgage debt at 4% per year, fully amortizing over 30 years. Change the interest to Rate=6% and recalculate PV=79,628.87. That’s 20.4% decline for the […]

Posted in General, Real Estate Investing, Wealth Creation | Tagged , , , , , , , , | Comments Off on Preparing for another economic crisis

Buy or Refinance Now

The valuation of income properties is directly tied to the cost and structure of financing. Real estate is a “borrowed money” business. As interest rates rise, the capitalization rate required to service the debt for a purchase or refinance also rises, and thus the valuation falls. As the valuation falls, existing debt Loan to Value […]

Posted in Real Estate Investing, Wealth Creation | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Comments Off on Buy or Refinance Now

The Equity Waterfall for a Syndicator

I just wrote an article about my preferred structure for structuring the equity financing with senior equity, preferred equity, and common equity.
A syndicator that raises private equity may consider an equity waterfall that is similar to a combination of debt and equity. Treat the senior equity like a 1st lien and the preferred equity like […]

Posted in Real Estate Investing, Wealth Creation | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , | Comments Off on The Equity Waterfall for a Syndicator

Guru Interest Rates

I am often astonished at the real estate “Guru” who charge outrageous (unpublished) interest rates for their products. As if their astronomical pricing isn’t bad enough, they offer time payment plans that are nothing short of usurious, making high credit card interest rates seem reasonable in comparison.
I recently sat through a yet another long-winded video pitch […]

Posted in Real Estate Investing, Time Value of Money | Tagged , , , , , , , , , , , , , , , | Comments Off on Guru Interest Rates

Capitalization Rate and Cash on Cash Return

I just added a new article on the correct way to calculate the Capitalization Rate (CAP) according to the cost and structure of financing.
An income property is generally valued on its cash flow, either the current cash flow or the anticipated future cash flow after repositioning. The valuation of the cash flow is calculated according […]

Posted in Real Estate Investing, Wealth Creation | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Comments Off on Capitalization Rate and Cash on Cash Return