Cincinnati OH newbie looking to learn & grind! Mentors? Partner?

Question

I'll get straight to the point.. I am looking to learn and grow from experienced investors! I am 26 years old, I grew up playing sports, I workout, coach and love personal training. Those are just a few of the things I love doing. I only highlight them because these things have helped me to not only be a team player but to grind and go get it! Also, I always had to learn from somewhere, a combination of my own research and learning from others and just doing it.

In real estate, I am ready to apply that same attentiveness to learn from those who know better, use my resources and GRIND to meet the goals that are put in place. I have listened and looked into so much info from BP and other resources and I'm ready to get going. Doing is the best way to learn. If anyone in the Cincinnati area, even from surrounding areas, is looking and willing to take a newbie under their wing and put my youthfulness, energy and drive to work, please let me know!

I have a small source of money for investing, not tons, that's without borrowing, a friend who is a contractor and has done huge projects (movie theaters, salons, hospitals, etc) in Cincinnati and other areas, a few other connections and just as important, the hunger! A closed mouth doesn't get fed so I figured I would reach out to this awesome community on BP that I just joined and see where we can go.

Thanks in advance!!!

Thomas Franklin · Answer

@Rebecca Bryant Since you are also interested in fix and flips, I propose the following action plan. The first step would find an Investor Friendly Realtor assuming you do not have access, to the MLS. I would suggest that you interview several Realtors and ask them the following questions, to ascertain if they are truly Investor Friendly, or if they are throwing you a sales pitch.

1. How many investors do you currently work with and how many investors have you worked with, in the past?

2. How many transactions have you closed, with investors?

3. Do you currently own any Investment Properties? If so, what type do you own?

4. Are you a member of any REIAs?

The next step would be to work with the Realtor and determine the hot markets, in your County, with the greatest number of sales over the last 90 to 120 days. Personally, I would prefer 90 days because markets are always changing. This list would contain the zip code and corresponding name of the municipality, and a breakdown of the number of SFRs. This will be your Farming Area. From this data, you can utilize a website bestplaces.net that will give you a breakdown of the percentage of homes that sold, in various price ranges, for a given zip code. This will identify the retail price ranges, in which you can list the rehabbed property and the price ranges, of distressed homes, you should target.

You can use the Realtor to help you find deals and also use Wholesalers. If you acquire a property, from a Wholesaler, once the property is rehabbed and ready for the Retail Market, allow the Realtor that provided you the zip codes, to list the property for sale. This creates a WIN-WIN Situation and gives the Realtor incentive, to work harder on your behalf.

I hope you find my comments, to be of useful value.

Thomas Franklin · Answer

@Rebecca Bryant If you can be be more specific regarding your REI Objectives, I may be able to provide you advice based, on my REI Experience since 1998.

Rebecca Bryant · Answer

thanks Account Closed, will do!

David Hayes · Answer

@Rebecca Bryant - something you might want to think a little bit more about is really refining your goals and what type of investing strategy you want to execute.  Then look at what you are missing to execute that strategy and partner and/or find people who can help fill those gaps.  If you make the deals win-win for everyone then you can build your team and execute your plan.  One of the first things you definitely need to do is understand your market, once you understand that you can much better determine if you really find a good deal or not.  If you find truly good deals - then there are lots of ways to make money on it.

Kevin Bolser · Answer

@Thomas Franklin excellent post !! Thank you

Thomas Franklin · Answer

@Rebecca Bryant I am not a fan of purchasing a Residential Multifamily Property known as "House Hacking." If you are looking to owner occupy, you may want to consider starting out, with buying a Duplex, TriPlex, or a Four Plex. Many Realtors will suggest purchasing a property using a FHA Loan, to reduce your out of pocket money. If the property requires rehab, the Realtor and/ or Mortgage Broker will suggest applying, for a 203k Loan. A 203k Loan is where the purchase price and rehab costs are rolled into a single loan.

Assuming you have a respectable FICO you can buy, with a FHA Loan (3-5% down, a 30 year amortization schedule, and a residential loan rate). You live in one unit and let your tenants pay the mortgage and other property expenses. This will give you experience as both a Landlord and Property Manager. The downside is you will need to live there, for a minimum of one year (to satisfy FHA Requirements); AND because you closed personally, you will not have Asset Protection, in the form of closing in the name of a LLC. What happens if one of your tenants has a slip and fall, on your property, or something else happens to them? You are on the hook and can be personally sued, for everything you own. Some people will say, "Take out a quality Insurance Policy and you will be protected." Ambulance chasing attorneys know their way around and can legally navigate around Insurance Policies. Another downside is you loose on the advantages, of the Federal Tax Code, by not closing in the name of a LLC.

If you want to close in the name of a LLC, Mortgage Lenders will offer you Commercial Loan Terms (25-30% down, a 15-25 year amortization, and a ballon due in 5-7 years). This is what I am encountering, in the current Mortgage Industry.

If you think you will go FHA, 203k, etc. and then Quit Claim the property, to a LLC, or a Land Trust you run the risk of the lender discovering a Title Transfer occurred and activating the "Acceleration Clause" or "Due on Sale Clause" that requires the loan to be paid in full, within 'x' number of days. These clauses are contained, in all Promissory Notes nowadays.

Many Realtors and/ or Mortgage Brokers will not tell you this information. Many, but not ALL are only focused on the commissions he/ she will earn and not focused, on your best interests. You many be asking yourself what can I do? Locate a Motivated Seller that will consider Seller Financing. You may have to put more money down (10-15%), but you can close, in a LLC, with no worries about banks. I have a lengthy Legal Opinion, from my seasoned Legal Team regarding this matter.

Rebecca Bryant · Answer

Awesome, thanks @Lee Smith!

Lee Smith · Answer

Get with your local REIA.. I work with a mentor in Cincinnati, Vena Jones-Cox, and she would be the first to tell you to get involved with Cincinnati REIA.. I have actually come over there for a meeting or two myself and I am in Indianapolis...

Account Closed · Answer

I agree with joining REIA as they are filled with resources, classes, trainings, and awesome opportunities for those interested in Real Estate.

Rebecca Bryant · Answer

Thanks @David Hayes , I know for the most part who I'm missing, but I'm not at a point where I feel that I can put together a team and lead but I feel that I'm at a point more where I would be part of a team and grow into being the leader that I want to be. I know the end goal is to have multiple properties to bring in passive income. Multi family being the main target. I am looking for people to help with determining good deals, which is why I want to connect with those in my area. I can do research, of course, and I do and will. But there's nothing like getting out there and seeing how it's really done. I appreciate and am taking in your input. Thank you!

Cincinnati OH newbie looking to learn & grind! Mentors? Partner?

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