All Forum Posts by: Aaron W.

@Kenny Hall Decide whether to flip or buy and hold will depend on your investment goals and whether the property can perform as a flip and/or rental. 

For me, I always invest to hold long-term. A successful investor I heard speaking once said: If you can't hold it, then flip it. If you can't flip it, then wholesale it.  This will give you a few options with each property you look at.

On the buy and hold side, taxes, closing costs (including commissions), repairs and maintenance, capex, insurance, and property management fees are always included in the analysis.

BiggerPockets has some decent calculators for buy and hold and flipping. This can save you time in building your own.

Best of luck!

@Kristen T. 5% seems high, but they can probably ask for it right now with the market where it is.

@Craig Anderson What sort of commercial real estate are you interested in?

@Kais Rona Taking action is going to be the best advice I can offer. The first deal more than likely is not going to be a homerun of a deal, but what you will learn will set you up for the next deal and all other future deals. 

Your first step should not be to choose a location to invest in. It should be to figure out your why in investing. What goals do you need to accomplish your why? Are you in it for cash flow or appreciation?  Do you need immediate cash flow or can it wait? What is your appetite for rehab?

Answer these questions first and then this will start to guide you in where you should invest.

Best of luck!

@Wei Jie Yang There's no one right way to do a partnership. As long as all parties find it fair and reasonable.  Even though you are bringing the capital, which is very important, the partner appears to be doing all the work. You are not doing anything other than collecting profits.  Is that worth 50%? That is something you both have to agree on. 

Whatever you ultimately decide upon, make sure both sides are satisfied and agree to it. You don't want any resentment because one side thought they should have more equity for whatever reason. There should be no hesitation to openly communicate on this or any issues affecting this partnership.  

Once you decide, make sure you have a legal agreement drawn up in order to make this official. 

Best of luck!

@Robin Brown The formula you list is a cash-on-cash return which is an important return when analyzing property. If you want true ROI, then you will need to make projections of how your property will do at some point in the future. For example, you can take your annual cash flow ($1,872 listed above) then make a projection of appreciation of your property. You will add all of that up then divide it by the amount of money you put into it ($50,000). This will give you an idea of an ROI.

There are many different ways to calculate ROI and I've provided just one.

Best of luck!

@Luke Nesler Please DM me and I will send you our PM. Very good one.

@Rachel Wagner You don't necessarily need to be pre-approved for a loan, but at least have substantive conversations with a lender who will lend for the deal. They should provide with you your upper limit for financing and some rough estimates on lending terms. This will help you write up the LOI.

We have a broker who will also provide a prequalification letter we can send with our LOI.

Best of luck!

@Joey Gorombey Your deal sounds no different from the overwhelming majority of deals out there. A stabilization period is usually needed to get the property from where it is to where it should be. 

Do you have any other income to cover the other expenses or the potential of a tenant not paying. Since the pandemic, there has been an increase in non-paying tenants. You will want to keep this in mind. Luckily, there are rental assistance programs out there but the tenant has to be willing to apply for them and some aren't. 

If this deal could make or break you, then I'd really think hard on whether or not you want to take down this deal. Even though it is hard to find now, but there will be other deals out there that will not be as high of a risk.

Best of luck!

 You don't need to promote yourself, but see who is in this group and reach out to them.