All Forum Posts by: Aaron K.

I agree with @Andrew Johnson the penalty is very high and many investors would be happy to earn 10% on their money and you are considering basically throwing that guaranteed 10% away. I think that there may be other options that don't include paying the penalty if you are dead set on using retirement funds to invest in real estate such as a loan secured by your 401k if you have one or as you mentioned the self directed IRA option.

If you do decide to borrow from family be very careful, be sure they want to lend money and you are not pressuring them.  Also get everything in writing to make sure all terms are clear, it is not worth losing family or friends to make a couple bucks.

An agent would have it listed on MLS so there would be more eyeballs, and some buyer agents will see FSBO and advise their clients against going that route due to some sellers being unreasonable and/ or most not wanting to pay a commission. If you have had luck in the past you can give it a try and if it doesn't work out then you can try with a Realtor.

In my quick look on zillow and redfin I didn't see anything wrong with the house, my biggest concern would be the Google street view showing the home in its un-rehabbed state along with the neighboring properties.  It could also be difficult for other agents to show if you don't have a lockbox.  I hate to say it but if your agent has requested agents contact them before showing and your agent doesn't answer their phone that can be a major problem.

Not exactly sure because I can't see the contract but I would assume that your hard money lender is selling the note to another investor (many do) and that fee is to cover that.  It could also be their estimate to cover standard closing costs through escrow and title but I doubt it.

My recommendation would be to get a W-2 job in a field closely related to real estate.  You mentioned that you are graduating with an engineering degree; if you are a structural or electrical engineer you might find something that deals directly with real estate and real estate investors.  Also it would allow you to pick up properties that require rehab in your area of expertise that others might want to stay away from due to having to pay an external engineer to evaluate.

If it is truly private money lending it will vary from person to person and be different in different geographic locations.  It will also depend on the time frame of the loan.  Higher interest rate and less points for short term; lower interest rate and more points for long term.  For hard money lending I'm seeing about 9% with 2.5% in points for California for someone with little to no experience.

Normally a high percentage of owners is a good thing as it usually means the neighborhood is stable and a place where people want to live long term.  The only exception I would see to this is if houses are extremely inexpensive ($65,000 or less) meaning most people who have decent credit would qualify to own instead of rent.

It usually depends on the bank that owns it, however if it was on market the listing agent should be in contact with the bank (their client) and be able to give you a better idea of time frame.  If you used a Realtor you can ask them to ask the listing agent to get an estimate on response time.

Cash flow really depends on how much you're willing to put down and what condition the property is in.  A lot of what I have seen for multifamily especially is properties that are below market rent, but once rehab is complete and rents are raised they should cash flow modestly.  the Inland Empire also has very little to zero rent control, so it is a good option.