All Forum Posts by: Aaron W.

Where can I find what activities count for qualifying for a real estate professional designation?  

TIA

@Mark Berardi If you can, you should try to hold onto a property for as long as possible. This is the way to build true wealth. You can take the equity out through refinances or HELOC then use it to acquire more property.

Take action. That is the best way to get over analysis paralysis and fear. They don't need to be huge action steps, but small, simple movements ahead will eventually build enough momentum to take larger steps.  

What is your why in investing in real estate and what are your goals to accomplish your why?  Money sitting on the sidelines is losing value the longer it is there.  How active do you want to be in the business?

@Shan Stratton I was able to get 30 year financing on a 4-plex; however, it is not with a traditional bank. There are many lenders out there that offer permanent financing for properties. The interests rates may be higher than current residential rates, but they are not astronomically high. 

It is impossible to predict where interest rates will be in the future, but we do know they are currently still at historic lows. That means rates will eventually move up. Locking in a rate now will allow you to enjoy the benefit of the lower rates. If they go up in the future, then you'll look like a genius. If they go down, then you can always consider another refi.

Best of luck!

@Hunter Swanson This may be too small for a commercial broker to consider but you can definitely ask. Properties of this size many times are handled by residential brokers. It doesn't hurt to ask both types of brokers for these properties.

Best of luck!

@Joe S. Some tenant lease agreements have a clause in there that states the tenant is responsible for certain aspects of the maintenance and upkeep. It is usually basic items and if they do not want to handle it, then you can send a maintenance person to take are of it for a charge. You should find out from your PM if they have anything like this in place.

Best of luck!

@Bobby Forsythe A HELOC can be more advantageous if you don't already have a deal to put the capital to. The interest rates are typically a little higher and have a limited withdrawal period.

A cash out refinance will typically have a lower interest rate, but you must start making payments right away, so it is better if you already have a plan for using the capital.

You can't really go wrong either way, but some planning on how you plan to use the funds may help determine which way you go.

Best of luck!

@Jason Malabute  

For your interest rate question, you can run this in a mortgage calculator to find out what the monthly payment will be. You will plug this number into your underwriting to see how it affects your returns.

For the occupancy question, you can run the Breakeven Occupancy and Default Ratio numbers.

Breakeven Occupancy is calculated by adding up the Total Operating Expenses plus Debt Service (mortgage) and dividing it by your Gross Potential Rent.

Default Ratio takes the Total Operating Expenses plus Debt Service (mortgage) and dividing it by the Effective Gross Income (Gross Income plus Other Income minus Economic Vacancy including Physical Vacancy, Loss-to-Lease, Concessions, and Bad Debt).

Hope this helps. Best of luck!

@Davis Chem This is a very broad question. Other than learning about why and how they got into real estate, the questions should be catered to your individual situation. For example, tell the mentor about yourself and where you are currently at in the journey, then ask something like, "If you were in my shoes, what would you do to get started?"  This is just one example.

Best of luck!