All Forum Posts by: Albert L.

Hey BP, 

We have unfortunately fallen in the typical newbie investor pitfall and deployed a good chunk of capital to our first deal are now struggling to find ways to do the second (most likely a BRRRR project so this problem doesn't come up again).

We've considered some of the following as next steps and would love to hear any advice on what the best route (if any) is...

Get Into Flipping/Wholesaling 

(+) We can somewhat quickly re-earn some capital and at the same time, learn how to find off market deals, run ARV's and estimate rehab costs.

(-) The market is somewhat unstable and we're stuck here in the Bay Area so it's a bit more competitive and dicey to dive into those ventures.  

Hard Money Loans

(+)  CASH! Woohoo! Hello financing, hello deals. 

(-) Oh wait, we don't have enough in our reserves to step in in case something falls through.. 

Private Lenders

(+) CASH! Woohoo! Hello financing, hello deals.

(-) We are newbies... I personally would not trust me to manage a project. I've only just begun...why would I trust you? 

Personal Loans 

(+) I think we're seeing a pattern here... 

(-) Didn't qualify for SoFi, Lightstream given the mortgage we just got on our first deal. 

Write A Book 

(+) Oh, that's a new one. Book idea would be to interview people who became self-made millionaires through real estate. It would be great way to learn, build a network and if I'm lucky, earn a little of extra income from any sales made

(-) This would take some time... and it doesn't fit directly with my goals in getting a BRRRR project done by this year

Do Free Work 

(+) More learning opportunities, build some credibility with potential mentor

(-) It's free work

Suck it up and start saving. Take the time in between to network and get educated. Consider leaving corporate, pursue another job opportunity with greater cash earning potential 

(+) Going back to an agency, commission style setting would give us an opportunity to double my income. Worst case, I would be taking a small paycut that would still afford us a decent standard of living and allow us to save a bit each month. 

(-) I could fail and not earn anything on top of my base salary and it would take a bit longer (3-4 years) vs staying at corporate (2-3 years). 

Thanks for reading my life story here. Would love to hear any thoughts on how I can keep this momentum up! 

Cheers

I would recommend checking with your property manager on those rent prices and see how long other properties in the area have taken to get rented out. Keep in mind, it's not the best time of year for new tenants as well so you'll want to factor those vacancy numbers in too

@J. Martin - What is the refund policy? I've tried messaging yourself and I've emailed the organizer a few but times but haven't had much luck. I'd love to go but had an emergency come up that weekend that I'll need to attend to. Please advise, thanks. 

@Andrew Postell - I agree with your advice. Being a newbie investor, I was definitely eager to just get a first deal done. In hindsight, I wouldn't say there was any regrets in moving forward instead of saving for another year before going forward with BRRRR. I learned a lot in the process and the deal was still a solid deal.

There's always tradeoffs with any decision. Maybe this is my harsh wake up call that there's consequences I now need to pay for playing my card too early. :)  

@Jaysen Medhurst - thanks for the quick response and confirming some of the gut feelings i had regarding my qualifications. 

Our only rental is a duplex in Cleveland. Looking to do in the same area with small multi's using the BRRRR strategy. We're trying to assemble 65-70k to get the initial ball rolling. I've looked into other suggested HML from bigger institutions (Lima, Lending Home, Coventus, etc) but have run into a combination of problems from not having a LLC, the loan amount not being big enough, or the high points/interest rates that'll throw some of the numbers off.

I have the other pieces of the puzzle figured out with refinance lenders, contractors, property managers, realtor, etc etc and understanding how the numbers work...my greatest barrier is just having the cash! (aka, every newbie investors problem). 

Fellow newbie here. My first deal was actually off the MLS, but that came after looking at almost 150 deals and catching a break with the seller who was motivated. I agree with the others above.. get to know not just a city but a neighborhood (or zip code) within that city and dig deeper into the actual blocks. Focus on just that and you'll start to see patterns and more importantly, give you the confidence to start making offers.

If you're trying to minimize cash ot of pocket, your best route will be some sort of BRRRR strategy, which will depend highly on what the ARV is and how accurate you think your rehab costs are. There's personal loans you can get for under 100k which will charge about 13-15%-ish but with no fees but again, that'll dependent on how the numbers look.

Hi Char, feel free to message me privately. I've just recently started in Cleveland but happy to share some contacts and my experience thus far investing from out-of-state. 

It's great that you're posting on BP, that's a great first step. Next is to just network with other investors in the area and hear their advice on what zip codes are good, what returns and rates they're seeing so you can benchmark against that and really just taking action on looking and analyzing deals. 

Good luck! 

Hey folks, 

We closed on our first property 30 days ago using a conventional, 25% down 30 yr loan from a local bank and have been applying to get a personal loan to potential BRRRR or flip on another property with no success.

It's been a humbling experience but honestly a bit surprising too given my high credit scores (above 740's), low DTI (roughly 28%) and stable, high net income from W2's.

We've tried SoFi and Lightstream and are considering Wells Fargo next, but wanted to see if there's a bigger underlying issue we're missing here before continuing forward with our applications. 

Question - how does my recent mortgage play a factor in securing a personal loan? (if at all)? What am I missing here give the typical factors when strong credit score / low DTI are there?

Thanks for reading and helping a newbie out! 

-Albert

Bit confused here. 

There's a property we're looking at that has 2 separate buildings on the same lot - 1 duplex (3BR/1BA upstairs, 3BR/1BA downstairs) and 1 SFH (2BR/1BA).

They are next to each other in the same vertical line. 

When I looked up the records, I'm seeing 3 different terms that I'm trying to understand from a legal perspective. This would be a potential buy and hold property but would still be good to know in case I do get in a situation where I need to sell. 

Land use: 5300 - 3-FAMILY PLATTED LOT

Property Class: THREE FAMILY DWELLING

Zoning Use: TWO FAMILY

I've heard to just stay away from these types of 2 buildings on 1 lot deals but I can't help my curiosity to understand how this works. 

Thanks BP! 

Albert