Getting Started in REI!

[Eric Woods]

Hello all,

I currently work an 8-5 job that is very analytical and numbers-oriented.With a solid background in finance, I would like to leverage my skills in analyzing deals and get started in the real estate investing arena.

GOAL:Purchase SFR (3/2) rental property in the next 12 months to create passive income source

Requirements of SFR:

• ≥$200 per month in cash flow (Income – Operating Expenses – Debt Service)
• Use property management company
• Good location (schools, low-crime, etc.)
• Certain property condition criteria (ex. no foundation problems, etc.)

Financing options:

• Seller financing would be ideal, but I understand this is 1 in 100
• Most attractive alternative:
  • Conventional loan – 80% (thus, 20% down payment)
  • Most or all of down payment financed through private lender
  • Thus, my only out-of-pocket costs would be rehab expenses (but best case scenario if private lender can cover those as well)

As you can see, my goal is to buy an SFR with as-little-to-no money down as possible (at a nice discount, of course) and create instant equity through forced appreciation.A few questions for you experienced investors out there:

• Does this financing sound reasonable? Would a newbie be able to swing this?
• If I chose to refinance 12-18 months down the road, what are some common challenges I could run into with lenders, assuming that the property appraises?
• Understanding MLS is a competitive environment for investors, what are some strategies for finding deals from other sources? More specifically, I'm speaking to properties such as pre-foreclosures?

Any input would be greatly appreciated.Thanks!

Eric