Rental Property Investor · St. Louis, MO · Member since 2018 · 33 posts · 23 votes
What steps would you take if you were in my shoes to start and build a portfolio? I’m interested in buy and hold properties, and I am just curious as to what some more experienced investors would do if they were in my situation?
Act as if you have no money, practice nothing down creative financing. Let your Mom hold your $40,000, don't blow it, if you can do deals without money, you'll make millions using the little you have, your cash is golden, conserve it! I have been teaching and buying using creative financing for 49 years. oh! don't blow your $$ on useless courses or on mentors who will try to attach themselves to your bread! Be careful telling the world how much you have. be careful of folks here offering you great deals
Look at 50 houses, keep a journal of all the details, listen carefully to the sellers, and agents. look at those house again in 6 months.
ask questions;
.mortgage balance,
.how much you need above your mortgage,
.know the potential equity in the deal, negotiate for equity (no equity, no deal!)
always make offers below market value
.ask can you help with financing, put request in your offer
.delay settlement as long as possible'
.ask for immediate possession
.use contingencies and assignment clauses
.Build in a automatic extension (you will always need more time)
. make sure that "time is not of the essence"
.use banking days, not calendar days
.learn how to control and roll while in contract
.ask for money back at settlement
.ask seller to pay for home inspection
. use a skinny contract offer, study and understand contract and creative clauses, they'll be your best friend and will make you millions!
.beware of agents, they represent themselves!
.make sure you understand comps
.don't make an immediate buying decision, think it over get opinions
.make a statement, "my goal is to earn a reasonable profit!" let seller and agent know that
.Talk less, listen more, take notes, don't tell on yourself, don't reveal too much.
.remember Cash IS KING conserve it.
.ask sellers to fix stuff before settlement
. Always ask for more, the furniture, the old car in the garage, money back and all .the lawn equipment.
. you should be in this business to make a profit, not to make a friend!
. if you don't like the deal or agent move on, there are many more sellers who will let you have your way.
.use the 7 words all the time "Is that the best you can do"?
.Do you need top price or a fast sale?
.learn "Power prospecting"
.learn to represent yourself
.study all expired listings in your area
.Go to housing court to find motivated landlords
.attend real estate auctions, take notes, network with other investors.DON'T bid unless you are sure you can get it wholesale
.Trust only your Mother
. be kind, smile and have fun as you learn this business.
If you dont already own your own home I would look at doing a house hacking situation as this will give you the hands on experience you need to go out and do more and more deals.
@Brandon Coleman I started my journey with a similar amount of CASH. I leveraged the banks money and bought a distressed SFH, conventional loan. I house hacked living my brother, remodeled everything, and refinanced after 12 months. The plan all along was a cash flowing rental. It was a massive learning experience and I had zero extra $$$ and had to leverage credit cards on few big ticket items. The cash-out refinance paid them off.
If you're serious about REI be prepared for surprises, hard work, and let downs because it will happen.
@Kody Thompson I don't own my own home but they're aren't many multi families in my market to house hack either. I've thought about just buying a SFH that I could rent later?
Doesnt have to be multifamily. If you can live in the basement and rent out the top floor until you have enough money to do that again and again and again. Millionaire in no time with that strategy.
@Jaron Walling Awesome! Does refinancing not kill cash flow? Doing the BRRRR strategy seems like the fastest way to scale, but if I refinance to get my money out the mortgage payment would be higher than if I just do 20% down plus repairs. Thats just what I've gathered from numbers I've ran on properties. Thank you for your reply!
@Brandon Coleman It kills SOME of the cash-flow but not all of it. Actually my payment went down because of the low interest rates. That's why it's important to find or create a good DEAL and know what properties rent for. I knew all that before I made any offers. The rehab budget went over, I didn't get all my cash out of the deal, but I'm completely fine with that.
@Richard Stover We have some older houses in my area with lots of square feet for cheap that I’ve thought about turning into multi families and house hacking. I’d just have to convince my GF to do that. Lol. Thanks for the advice.
@Caleb Brown All sound like great ideas. I could save a few more months and do a BRRRR on my own and potentially house hack that deal. Appreciate the ideas.
@Brandon Coleman Hey Brandon find two apt buildings for 100k put 20k down buy the first one go to another bank and put 20k down and buy your second one.
You can buy a SFH and live in one room or basement then rent out the rest. Where do you live bro. I think depends on the state, your money is enough for a 20% down payment.
Act as if you have no money, practice nothing down creative financing. Let your Mom hold your $40,000, don't blow it, if you can do deals without money, you'll make millions using the little you have, your cash is golden, conserve it! I have been teaching and buying using creative financing for 49 years. oh! don't blow your $$ on useless courses or on mentors who will try to attach themselves to your bread! Be careful telling the world how much you have. be careful of folks here offering you great deals
Look at 50 houses, keep a journal of all the details, listen carefully to the sellers, and agents. look at those house again in 6 months.
ask questions;
.mortgage balance,
.how much you need above your mortgage,
.know the potential equity in the deal, negotiate for equity (no equity, no deal!)
always make offers below market value
.ask can you help with financing, put request in your offer
.delay settlement as long as possible'
.ask for immediate possession
.use contingencies and assignment clauses
.Build in a automatic extension (you will always need more time)
. make sure that "time is not of the essence"
.use banking days, not calendar days
.learn how to control and roll while in contract
.ask for money back at settlement
.ask seller to pay for home inspection
. use a skinny contract offer, study and understand contract and creative clauses, they'll be your best friend and will make you millions!
.beware of agents, they represent themselves!
.make sure you understand comps
.don't make an immediate buying decision, think it over get opinions
.make a statement, "my goal is to earn a reasonable profit!" let seller and agent know that
.Talk less, listen more, take notes, don't tell on yourself, don't reveal too much.
.remember Cash IS KING conserve it.
.ask sellers to fix stuff before settlement
. Always ask for more, the furniture, the old car in the garage, money back and all .the lawn equipment.
. you should be in this business to make a profit, not to make a friend!
. if you don't like the deal or agent move on, there are many more sellers who will let you have your way.
.use the 7 words all the time "Is that the best you can do"?
.Do you need top price or a fast sale?
.learn "Power prospecting"
.learn to represent yourself
.study all expired listings in your area
.Go to housing court to find motivated landlords
.attend real estate auctions, take notes, network with other investors.DON'T bid unless you are sure you can get it wholesale
.Trust only your Mother
. be kind, smile and have fun as you learn this business.
Hey @Brandon Coleman - I'd definitely recommend going the house hacking route. $40k is a solid downpayment for in many markets. You can even afford something in expensive markets if you get an FHA loan.
One of the largest expenses you'll ever have is for HOUSING. You have a chance to set yourself up with a strong financial foundation at the young age of 22 and reduce your living expenses now, then move on to the next step which is saving more to reinvest for the next opportunity.
Congrats man and best of luck! You're on the right track.
@Brandon Coleman when I was 22 I decided to use my $18k and travel the world for 18 months. I visited five continents and 60 countries. I travelled by car, plane, boat, donkey, mopeds and anything else that moved. I ate the best pizza in South Africa, I got mugged in Cuba and then got my money back when I mugged my mugger, I got lost in the Sahara desert, I used the toilet in Ghandi’s child hood home, I met a girl in the Czech Republic and then another one in Thailand and then Spain, I ate amazing beef in Argentina, I partied with Russians in Moscow’s until sunrise, played soccer in Ghana and Turkey and Brazil, I saw the most amazing sunrise in Vietnam, I had Guinness in Ireland which taste better than anywhere in the world, I met my wife in Ecuador, I met incredible people everywhere and so on and so on and so on.
Before I left on my journey everyone told me to save my money, to invest it, to start a life. That is what everyone does after graduating college. I knew I would one day have a family and it would not be the same as a solo trip around the world. If I waited until I retired to do my world trip I would not do 95% of the things I did.
I did invest it! I saw the world and grew as a human. I had $1k left at the end of my trip but gained an appreciation for life. It made me a better person.
You don’t have to be as extreme as me and spend almost everything you have and I’m not saying buy a boat either but enjoy your life. Be smart in life and in work and success will come. You might have to wait until you are 40 rather than 30 to be a millionaire but enjoy life and what you do.
Spend $30k on a house hack, rent all the rooms so it pays the mortgage and then go travel the world with the other $10k. Come back a changed person. Good luck!
@Brandon Coleman Im going to be you by January hopefully and get my 2nd Rental Cabin here in TN. It is so exciting having my first one close in Mar and it is rented to 98% capacity. Living the happy life!
House hack the biggest most cash flowing quadplex you can buy with the lowest percent down you can. Try to get your investment back from cashflow quickly, move nearby and do it again!
I love what @Eric Teran and @Account Closed said!! I don't think I could have said anything better lol. What I will add is whatever you do, make sure you educate yourself on the action so that it's a calculated risk. Good luck!