Be Patient or Figure Out a Creative Strategy?

Question

Hey Everyone,

I'm attempting to start investing, but am possibly hitting an early roadblock. Recently I went through the process of trying to get pre-approved. Ultimately I was told that I would need to have a co-signer as a result of only working part time at the moment (I am starting a full time job in early October).

A possible solution that I am considering is having my friend/potential partner go through the same process to qualify for a mortgage, since he has had a stable, full time job for some time now. He has already shown willingness to do so, therefore I am wondering whether this may be the best route to take, or, should I be patient, continue to learn/network and revisit my own situation after I start the full time job in October.

Trying to find a balance between patience and looking into creative strategies to get started.

Any advice is always appreciated and let me know if more information is needed to understand the situation.

Shaun Reilly · Answer

@Patrick Wheeler it isn't bad to have a pre-approval or to look for creative deals.  More tools in the toolbox just means you have more options.

I will agree with Jean that if you are just getting in the game you should be looking at and running the numbers on a lot of properties.  Sure there is a chance you win the lottery and find a smoking deal in the first couple you look at.  More likely though you will look at dozens (if not hundreds) of duds before you find a good one.

So I'd simmer down on finding ways to get your pre-approval before next month and bone up on some creative financing strategies and start analyzing some properties.

Steve Vaughan · Answer

I would get busy getting 'creative'. I don't need to be, but after refinancing a bunch of properties in 2012, I vowed to never go back into a bank except to make deposits!

I get my seller-financed rentals from tired landlords and landlords that have had it with crappy management.  Look up addresses of tired properties for rent or if you know of the worst PM in your area, look up the address owners of the properties they are advertising for rent.  Send the owners a postcard or quick note.

Learn how to work 'in' your business. My best seller sold to me on contract the first time because I put my clipboard down and stopped a toilet from running while I was touring apts. Fixed a doorbell, too, in front of him, in 12 seconds. These old guys did it themselves for years and want to see you will be able to do the same.

Don't be afraid to work 'in' your business while you're new and growing . Worry about working 'on' your business when you're analyzing multi-million dollar deals all day.

Good luck @Patrick Wheeler!

Shaun Reilly · Answer

There are lots of articles and discussion threads here on BP that talk about ways to analyze properties.  You can also check out the BP calculators, I think you can use them a couple times on a trial basis before you would need to upgrade your account.  Should give you a good feel on what to look for and if you really like it getting a Plus or Pro account isn't that expensive.

You also can just look up sheets on calculating NOI for a rental.  Just don't worry about things like cap rates if you are only looking at 1-4 unit places.  They don't really mean anything, but figuring out the net operating income is still very useful in comparing properties, then figuring out if there are any advantages in financing options.

Jean Bolger · Answer

According to your profile info, you are just getting started learning about RE. Frankly, you're probably better off not having funds for a while. You should go look at and analyze a LOT of properties AS IF you had funds, though.  That way you'll start to develop a sense of whether you've got a real deal on your hands or not. It's easy to jump on the first possibility starting out and then be sorry later.  Besides... October? that's like two weeks away, how much patience does that take?

Jack Butala · Answer

@Patrick Wheeler

There are no road blocks, only speed bumps.

Financing real estate has probably never been more difficult.

Finding tenants has probably never been easier.

Here is my advice:

If this is your first deal, make sure it's perfect.  Make sure you review 100s of deals or more.  You will be amazed at how much you can learn without spending a dime.

Eventually you will find one that you never thought possible.

Here is an example:  We just bought 40 acres in Oregon for $2,000.00 total and sold it for $12,000 before we could close on the acquisition.

There are so many myths in real estate investing.

I have made this mistake: "get a loan on a rental house or an SFR flip and hope for the best."

There is a science to renting, flipping and real estate investing.

Please let me know if I can help.

Patrick Wheeler · Answer

@Ann Bellamy My apologies! I genuinely thought there may have been a mix up, but glad there isn't.

Jack Butala That is very true. Like I have mentioned to others, I am definitely going to focus on studying and analyzing deals so I can educate myself in that area.

Patrick Wheeler · Answer

@Ann Bellamy I could very well be wrong, but I believe the group's website and meetup group had different locations for tonight's event.

Barbara G. Seems like it is very important to establish each other's goals before starting out, as well as figuring out the roles of each individual and sticking to them. And Mike yeah I guess that is why I am trying to cautiously hustle lol.

John McConnell · Answer

Sorry @Ann Bellamy I just realized this morning when I was going over my calendar. Can't wait to see the new place. Hopefully the traffic will not kill me getting there. Barbara G. I guess the definition of partnership needs to be clarified but yes, having someone go through the trenches with you is a huge motivational factor. On the days when things are not going so good you have someone there to push you along and vice versa. I'm all in favor of working with anyone in any capacity because whatever happens I will be continually learning. As far as a traditional partnership, of course there needs to be safeguards in place in order to protect each persons interests. I think it's all about connections and working with people doing things you love to do and sharing that experience with likeminded people. We are after all in the people business..the rental/sales/ownership/money is just the byproduct of how well you work with people and solve problems.

Patrick Wheeler · Answer

@Steve Vaughan That definitely seems like something I would want to do early on and should be comfortable doing for a long time!

Ann Bellamy · Answer

@Patrick Wheeler, they all say Garcia Brogan's, you had me going for a minute there!

Be Patient or Figure Out a Creative Strategy?

Most Popular Reply