All Forum Posts by: Aaron L.

@Austin Fruechting congrats man! Couple questions (I apologize if you already answered these in the above comments). I think you mentioned you had a goal of 85k/yr in order to be financially free. I figured someone would only need 40 or 50 units to achieve that goal, especially if the units have great cashflow as you shared in a previous comment. I'm curious...did it actually take 107 units to achieve your goal or did you hit your goal much sooner? Is there a certain dollar amount per unit that you aim for, or does it depend on the deal? Last question: are your properties in decent areas, B, C+, etc? I'm also from KC and know the area pretty well. Thanks!

@Thomas S.The surrounding blocks are owned by other members of his family. Perhaps "landlocked" was the wrong choice of words. What I meant is there are currently no roads into the land, but those could be built. The land must have some value?...there are people who have expressed interest in buying it including government, mineral company, and a developer.

Hey BP,

I have a friend who owns tons of land free & clear..it's been in his family for decades. The land is "landlocked" by other parcels of land around him...so there's not much access to it. The government has expressed interest in buying it, as well as an oil & gas company that wants to mine it...however, none of that has materialized so far.

So here's the question: how can he access the equity in his land in order to purchase cash-flowing assets? He's looked at an equity line, and they might lend 30-40% LTV. The rate would be high due to the fact that it's vacant land, like 8 or 9%, but could potentially give him access to a few million (land is worth 10 mill+).

Also...How would you invest that money? First thought is apartment buildings... He wants to create a passive income stream to support his family long-term. Also, he's a total newbie with no RE experience other than renting out 1 SFR a few years ago.

Thanks in advance for the help! 

@Austin Fruechting it's a great plan, but in order to refi in 12 months your uncle would need a minimum of 80% LTV to refi. To go from 96.5% LTV to 80% in 12 months can be tough. If he gets a killer deal to begin with and has built in equity that could work, but in this market it can be hard to get a deal like that with an FHA product, no? But...another great thing is if he is living in 1 of the units for a low/free monthly cost, he can set aside all that money he is saving for 12 months...and then use that money to pay down the 1st loan to 80% if he's not quite there.

Also, I've heard FHA recently made a change and you can't get an FHA loan if you own another house within a 100 mile radius...even if the first house is financed with a conventional loan with 80%+ LTV. You may want to check that out as I've heard conflicting reports about that new law...

@Ian Reeves no prob! I was born and raised in Canada, which is why I know about RBC 😃

@Ian Reeves your Canadian friends can get a mortgage to purchase a second home in the US through the Royal Bank of Canada. Depending on their credit, etc. they'll need to put 20% dp for a secondary home (vacation property, etc.), and 40%+ for an investment property. The dp is a bit steep, but the interest rates in Canada are way lower... and getting a mortgage in Canada is a dream compared to the US. Just an idea!

https://www.rbcbank.com/help-and-faqs/mortgages-and-loans/top-10-u-s-mortgage-questions/index.page

Awesome! Have a great day. 

thanks for the info. last question: Did you compile a list of distressed properties as you would for a regular campaign or did you just mail to the houses you wanted to live in, regardless of whether or not they were distressed?

Welcome Danny! We know each other outside of BP. Glad you're taking the plunge into RE investing, BP is a great resource. 

@Chinmay J. I hear what you're saying about possibly losing negotiating power. Thanks for taking the time to reply!