Potential First Deal

[James P.]

I have a family member that has a property and she owes $80,000 on the house. I asked her if she'd sell it to me basically and she replied yes. I've heard that creating a LLC is not the first step, but still important. I am thinking I begin a LLC and pull a fha gift equity loan from a lender to buy the house. I was hoping that through this loan I'd be able to get a 203k loan to follow suit, so I can force appreciation. I would then refinance and pull the equity to pay off the fha gift equity loan and hopefully the 203k loan and whatever is left purchase another property!

Does this sound a little right or even possible?

[Christopher Blanco]

@James P.

"I have a rough idea and it seems sound enough to plan on buying the house."  should never be uttered by a real estate investor. My mentor once told me a phrase, and it changed the way I look at deals. He said, "We are in the business of talking ourselves OUT of deals, not into them."  You cannot go into a potential deal and just "see what happens". You have to know what happens and be ready to control the surprises. I would tread very carefully here or you could be in for a very expensive education.