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Looking for second deal, have to be creative
Hey all! My name is Aden Brust, I bought my first deal (duplex) in northwest Arkansas at the age of 18 in March of 2022, I am 20 now and looking for my second deal because I feel I have just been stuck since I got my first deal. It took me forever to remodel the first duplex and get tenants in there (huge learning experience which Im super grateful for) but now I feel like I need to get over this hump and get moving again. I don't have a W2 and all I have is the first duplex income and some photography income from my photo business. Im asking if anyone here has any creative ideas that maybe I haven't thought of to get the next deal, as well as any just general tips for getting your second deal. So far these are my ideas for getting into the next property.
- Seller financing by pulling off market list of all 2-4 unit absentee owned 100% equity properties in my area
- What is the best way to go about this as well? Cold call? Letter? Email?
- Somehow using the equity in my current duplex (around 75k-100k)
Thats about all the ideas I can think of, so please let me know if you have any other ideas/thoughts!
Goal is to get another duplex by April this year and then another one to move into and house hack before September.
Hey @Aden Brust!
Seller financing is an option and may be a good option if you can find the right people.
The other option would be a DSCR loan. They do not look at DTI. If you go that route be sure to tell them your age. Some lenders will not lend to people under the age of 21. With the DSCR loan you could cash out refinance the property you already own, 75% of what it is worth, and then use the money to help buy the next property.
Not as familiar with house hacking, but seller financing or financing through a local bank would be the best option. With current income, it may be hard to go through a local bank.
Good to see you're back at it Aden! Best of luck in the future.
Man, I would really hone in on your goal. Honestly, you have to drive two cars in real estate. One you already started, and that is the passive income vehicle. This one answers the question: Where can I park my money to make a good passive return. The second one is the Capital growth vehicle. This one answers the question: How am I going to get more capital in order to feed my life now, and have extra to through it into the passive income vehicle. The capital growth vehicle could be flipping, wholesaling, agency, owning another business (photography), or just a high income job.
However, when searching for properties, pull the list for what you are wanting and hoping for, but don't say no to a flip. You could flip a property and then take all that new found capital and buy a duplex on market, because it will now cashflow with the amount of capital you put into the deal.
My investors have found 1. Direct mail to be the best, 2. SEO greatest returns, but fewer deals, but when you get them they are home runs. 3. Cold calling. Choose one at first and get really good at it. Don't stop until you get a deal.
Thanks for the info Brian! I'll definitely have to look around for some lenders and see if anyone has a DSCR option, I guess I assumed it would be a no without ever asking a lender! Have a great day!
Thanks Jamie! Good to hear from you.
Thanks for the info Ryan! That makes a lot of sense and I think that is definitely good advice not to try and market for specifically seller financing and open my mind to wholesales/flips as well to build cash! For my first deal I used direct mail and I think I got lucky getting a deal only sending 40 letters out! But for some reason I went away from it and tried cold calling because I thought it would be faster to hit my goal of a property by April but maybe I should just stick to direct mail! Do you also cold call/email/ etc while waiting for responses from mail? Or do you just wait it out?
Thanks,
Aden
Great question. I have more money than time. So I have filled my time up with other real estate activities like follow-ups. however, if you don't know what to do, cold calling is always great. It gets you really good at talking to people.