New Member in Massachusetts

[James Guerriero]

Hello BP Community,

I am excited to be here and hopefully learn what i need to know to take this up a notch.   Ive been involved with real estate since my early 20s when I basically flipped a 3 family.  I took an extended hiatus while serving in the Navy and being stationed in Japan.  We came back in 2011 and shortly after bought our first 3 family in Salem MA.  My intention was to stay there for few years but we found a deal that couldnt be refused on a 2 family in need of major work in Topsfield MA.  We moved in and I did most of the work myself completely gutting and renovating the bathroom and kitchen and finishing off a 3rd bedroom that was lacking insulation, drywall,  windows, or a closet.  Once Topsfield was ready to rent we found what is for me my dream house in Topsfield and have been living there since Aug 2015.  Im getting the itch again and now I need to figure out what the next step is to purchasing some more property.  I like being a landlord so I think it will be another multi but the trick will be coming up with 25% down plus closing costs.  Im standing by to hear from all of your experiences and advice.  

[Nick Aalerud]

Hey @James Guerriero!  Welcome to BP!!  I second everything @Shaun Reilly just said, LOL.  

As for the 25% down payment - if you're having trouble coming up with it, you have a couple options, although each one should START with you getting acquainted with and following the advice of your new commercial mortgage professional (if you need a referral, let me know and send me an e-mail!).  Your mortgage pro will essentially run the deal and tell you what funds or income DO and DO NOT count, etc.

A few options:

1.  Borrow from friends & family -- this may  be obvious, but see if they'd be willing to accept a loan at a slightly higher int rate (7-10%?) to invest in your deal!  Check with the mortgage pro though to see if they disallow 2nd mortgages on the property... you may have to structure it privately.  

2.  Get the seller to hold a 2nd mortgage -- if you're going after motivated sellers, or even market sellers, many of them may be in a position where they can take a large chunk of the cash now from your primary and hold a soft seller 2nd, at a slightly higher interest rate.  Part of your negotiations - but remember to check with your mortgage person first to ensure they'd allow this!

3.  Start wholesaling or partnering on rehabs:  Wholesaling is a great strategy for those who don't have a ton of cash or credit, and is a way to pick up some $$ in a few months after you start your marketing machine up... BUT EVEN better, I support it since it will teach you how to bring in off market deals over and over again, despite market changes and even after you are flush with resources.  

BP, CREONLINE.com and lots of blogs around here can assist.  Wishing you luck!  And I love Topsfield!  :)