All Forum Posts by: Eric Black

Plus, so many Millenials saw their parents get burned, even those who didn't buy at the peak, some of them are turned off and don't see buying a home as a good investment. This means more renters for us! 

Hi Lekisha,

Doing a double closing may be difficult as many banks require you to sign an addendum stating that you cannot sell the property for a minimum of 90 days after you purchase it, especially when it comes to short sales. Again, it depends on the bank but most of the big banks have this addendum. You may need to contact the seller's lender/bank to find out if they will require you to sign this type of an agreement. If so then your double closing is out. 

As for proof of funds, the seller's bank/lender may ask for a pre-approval letter or proof of funds before approving the short sale but again this is something that will vary from bank to bank.

Cheers!

Eric

Ashley, it sounds like you already have the tools in place to help you when you get to that point. I hope you are able to reach your goals sooner than you plan and you've found the right place to get you there!

Cheers!

Eric

Hi Ashely and congrats on your early successes. 

The answer is going to be different for everyone so you'll have to come up with your own. However, a common "formula" is, assuming you want at least the same amount of money that you're making from your job, once you have enough passive income to equal or exceed that then you can quit your job. So if you're making $5,000 a month at your job then you'd want at least $5,000/month in passive income. One thing a lot of people don't think about is that, for many people your insurance costs will go up depending on what kind of (quality of) insurance you have through your employer so you'll need to factor that in. 

Best of luck!

Eric

Hi Anthony,

I am not a CPA so I can't answer that for sure. I would recommend talking to a few CPA's but be sure they really understand real estate investing. I would also recommend reaching out to @Amanda Han who is a very good CPA and knows all about investing. She was a guest on one of the earlier podcasts. 

Cheers!

Eric

Hi Vera,

Welcome to BP. You've come to the right place to get your questions answered. 

However, you're going to have to be a little more specific as to what advice you're looking for. How to what? How to negotiate the deal? How to find the seller? How to analyze the deal? How to calculate rehab costs?

Everyone on BP (well, almost everyone) is here to help but you'll have to provide a few more details and specific questions before you should expect to get any real helpful advice.

Cheers!

Eric

Hi Phil,

There's good news and bad news. The good news is there are banks out there who will finance a HELOC on an investment property. It doesn't have to be the bank that holds the first mortgage. I asked this question not too long ago. I ended up getting an 80% HELOC on a rental property on one of our rentals through our credit union. Sorry, they're only in California so they can't help you but here's the post with a lot of other recommendations:

http://www.biggerpockets.com/forums/49/topics/1748...

The bad news is, with a high DTI it might be hard to qualify regardless if you find a bank who will do the HELOC. Then again, every bank is different and they will also calculate your debt differently so be sure to ask a lot of questions so you don't waste your time.

Let me know if you have any more questions.

Cheers!

Eric

Hi Jim,

Yes, this is a very common occurrence and one that is often not mentioned by those who push getting an LLC for all of your rental properties. Many banks require the name on the insurance policy to match that of the name on the mortgage, regardless of who's name is on the title.

They're not discouraging LLC's, they're covering their own butts just like you're trying to cover yours.

Do some more searching on BP to see what others have done and recommend.

Cheers.

Eric

Hi Amanda,

Absolutely student loan debt will affect your ability to get financing. It's a debt you owe just like a car, credit card or medical bill. And you can't discharge it in bankruptcy so you're stuck with it. This is becoming a big crisis and may be the next "crash". 

As for point #2, never buy a property because you "feel" you can make money. If it's only $11k there's a reason. What are other properties in the neighborhood/on the same street selling for? What is wrong with the property? There are lots of $500 houses in Detroit but that doesn't mean you can make any money. If it's an older home be sure to research if there's asbestos in the home. If there is it can, and most likely will, cost you thousands of dollars just to get that fixed. 

Cheers!

Eric

Hi Stephen,

Sounds like you'll need to use a Skip Trace service. There are a million of them out there but some you'll hear mentioned on BP are www.findtheseller.com and www.spokeo.com. You have to pay a fee but it's usually small. 

Cheers!

Eric