How can I make a "LIVING" in Real Estate-NOW?

Question

I use to flip houses, and sold some on LP's. When the market crashed I got out asap.

Last-year, spent over 3-months looking for a deal/flip and came up with nothing! Networked, letters, cards, you name it. 10 years ago I could find a deal in a week. I was a full time Realtor then, retired my license to flip houses. I still have MLS and CRS access too.

There is only one real wholesaler who is actually "doing the business" in Nashville that I know of, and he has yet to find me a deal.  He's on TV with mega ads during prime time, office staff, marketing, etc, etc. He gets plenty of junkers/low income/rental houses, but nothing in areas that I want that I'm use to being in. Non-ghetto in other words.  At the local REIN meetings it's all wanna be wholesalers trying to build a list, they never have any deals. Some call occasionally with no deals and comps that aren't even real comps, then I have to explain to them what MAO is and 70% minus repairs is the only way it works, and that buying a property for 80% of ARV before 1 dime of repairs, does NOT work. If I wanted to make-"nothing" I'd keep buying and selling cars thru my friends dealer.

I need to make a "LIVING"-NOW, could care less bout 40 years from now, or chasing dead-beats for rent every month. Flips/rehabs are all I care to do, get in, get out. I'm trying to stay in my own backyard, and not have to leave my family and run off to south Florida, or Phoenix. I talked to a guy on here last year that lead me to a wholesaler in Phoenix. I'm still on his list, but in a phone call to said wholesaler he told me the market had got soft, and a former wholesaler in the area also told me the same and recommended I look other places for now and that was October last year.

Anyway, as much as I despise rentals, if I knew how to make-a-living-NOW at it, I would get into it. I currently have about $230,000 cash available, and a 805 credit score. But with bank ridiculous requirements, limitations, etc, how does it work without private money? Buy land, build a 200 unit apartment complex, ok... how can I put that together and make it cash flow $200 or more per door and meet all other obligations?

Any suggestions/explanation of how I can make a "LIVING-NOW" doing anything in Real Estate and stay in my home area would be greatly appreciated. I can scrape by for now on $5,000 a month but need $10,000 to live or gonna have to sell it all.

Thanks.

Raymond B. · Answer

@Ronnie C.,

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Account Closed · Answer

I'm no expert.  But, as a manager, I learned to love grad students.  Many years ago, I lived in Nashville and worked at Vanderbilt University.  If you consider getting into the landlord business, could you maybe get into a large home with multiple rooms you can rent to med students?

I targeted law students where I managed a building next to a university, but it did not have a med school.  I loved law students.  All they do is study and they're too exhausted to party, and spend most of their time at the law library.  They also usually have internships over the summer somewhere else, and don't want to lose their housing, so they will remain tenants until they graduate, and sometimes another year if they intend to take the bar exam where they went to school.  So, if I could get a first year law student, I'd usually have them for 3 - 4 years, and some became lawyers and stayed on.  I rented small studios.

But, I heard med students are the same way.  If you allow them to sublet their units/rooms over the summer to other grad students while they go away for a summer internship, and sublet to a grad student coming to Vanderbilt for their summer internship, there isn't a vacancy for the summer.  There's a market for short-term summer housing, and they'll pay a premium for it.  My tenants told me they sometimes actually profited by being able to sublet for the summer their "furnished" units.

So, maybe instead of a multi-family property, if that's the problem (I don't know about this type of financing), then what about a huge old home near the university (or on a convenient bus line) and rent out rooms?

Might not bring in $10,000/month, but maybe you can build on that idea, owning more than one?

If you rent to students you want to rent to grad students, and you want the grad students who are too exhausted to party :-)  I advertised on the law student website for vacancies (with the housing director's permission) and I told my tenants if they refer someone I rent to, they get a $100 rent credit.  I often had a waiting list.

Just a thought.

Jay Hinrichs · Answer

@Ronnie C.

check your state regs... get whatever license you need to be a HML... maybe you don't need one for non owner occ commercial purpose loans.. many states you do not need any licnese for this activity.

Then take your cash and credit score to a bank.. put up the 200k for a 5 to 1 credit facility to back fill hard money loans... make loans at 15 to 20% which is common in TN  that's what I have always gotten in Memphis... borrow from said bank at 5 to 6%  make the delta.

that's 100k on the 1 million credit facility a year and 30k on your 200k.. that will get you started  then.. bring in private investors and fund deals for them once you have done it yourself and shown that you know what your doing... let all the others try to flip houses etc. while you collect your payments...

and then you can leverage it up... once you get to about 5 million you have a real business.

YOu bring in other equity partners for your cash component they can be passive or with you.

Curt Davis · Answer

You live in NashVegas and should know that one of the best flip markets in the country is only a short 3hr drive to Memphs.  You can buy homes here and flip fairly easy. You have enough cash to the whole deal cash and not need a private lender in this market.

Good luck

Account Closed · Answer

@Raymond B. Thank you for that, I've been trying to figure that one out for a while now!

Jay Hinrichs · Answer

@Dean Letfus

your not including points.  and many HML are 2 to 4 points 10 to 15% for 6 months bringing your apr up to the 20% range

Dean Letfus · Answer

Hard money is 9 to 12% max in Memphis now @Jay Hinrichs no one would be paying 15 to 20% unless they are crazy :-)

Ronnie C. · Answer

@Jay Hinrichs private message sent.

@Steve Babiak Thanks. It's a retarded system, but if that is how I have to use it, so be it.

Steve Babiak · Answer

Ronnie,

To message somebody, you can click on the user's profile link (their name above a post or in any @ mentioning them will work); once there, you will see a "Connect" if you are not already colleagues - use the connect to send a colleague request with a brief message and that will go through BP's message system.  If already colleagues, there will be a send message link.

Jared Lichtin · Answer

I've also heard really good things about Knoxville, especially near UT.

How can I make a "LIVING" in Real Estate-NOW?

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