All Forum Posts by: Alexander Ball

@Joshua Lidberg

I don't have anything under contract, I was looking at properties on auction.com and huzbu.com.  I noticed they were listed as tenant occupied and they would have a single picture of the outside at best. It's obviously pretty risky to bid on a property where you cannot see in the inside and I don't want to buy something when I have no idea what I am getting into.

Hey @Pat L.,

Thanks for the response and that's a good idea! I'll definitely try it out and see if I have any luck.

Thanks

Yes, I know it's considered trespassing and illegal and that's why I would like to ask the community a few questions.

1.  Can I try and get ahold of the current tenants phone numbers and give them a call? Ask if I could stop by and see the property?

2. If I were to go up to a property, is there any legal way I can make them a proposition?  Like hey, for $20 I would like to see the quality of your home?

3. If I did #2, could that effect me closing on an auction if someone found out?  Could I get in serious legal trouble?

I have not done any of the above, I figured I get some feedback before doing anything stupid. I also know no one here is a lawyer and I accept that reality.

Thanks!

@Benjamin Seibert

Awesome job, I'm looking to get into Hagerstown.  I was wondering what your numbers are like and what numbers you're looking for in the area? How did you find the deal and how did you finance it?    

Hi, I bought my first house hack at the end of last year.  I will be acquiring at least one more (maybe two properties) this year.  After I have a couple of more deals under my belt, I would like to start working with family to purchase more properties.  At first, I would take small amounts to mitigate risk for everyone and ideally later scale up from there.  My family make good money and I would make it very clear 1. My entire financial position 2. Risks of investing and 3. Of course the returns.

I cannot seem to find a straight forward guide on how to do this anywhere, but maybe someone can help point me in the right direction.  What I want to do is the following:

1. Buy residential

2. Have a partner lend me money for the down payment and closing costs, I pay them a fixed rate of 8%+ for the amount they lend me.

3. They are only lending me money, they're not a part owner of the deal.  I pay them 8% whether the property does very well or terrible

Questions I have

1. Will banks still lend me money if a partner is supplying the down payment?

2. How can I structure the loan they give me? Can it be as simple as 8% until they call it due?

3. How much work does it take a Lawyer to set up the following agreement?

Thanks

@Nehemiah Wallace 

I'd honestly go for it then, 2-3 years is a long time.  Investing now and you could be in a very good financial position in a few years.  Just my 2 cents.  Also, I have to be honest I don't have kids or anyone relying on my so my position could easily be very wrong...

I have a few questions:

1.  Are you struggling to pay off this debt? As in do you struggle to make the monthly payments? will you ever struggle to make the payments? Have you ever struggled to make the payments?

2.  How long will it take to accumulate cash for a down payment if you were to pay it off?

3. Could you compromise by buying a house, get it cash flowing and then use that cash flow towards the debt?  

People only spend money on courses because it makes them feel like they're "doing something" towards their goal of real estate.  It's a stupid way to procrastinate in my honest opinion.  If you're going to lose money, lose it actually investing where you'll gain invaluable experience and knowledge.  I'd recommend the following

1. House hacking is hard to mess up honestly.  As long as you pay less a month than you currently do in rent, it's a success because you both learn a lot and of course save money.  It could be as simple as renting out 1-2 spare rooms.

2. Go to local meetups and google "your area" bigger pockets to find threads on investing in the area. It's the best way to quickly learn investing in your area.

3.  Research your area, find something that can work and GO for it.  I know you guys can do it, good luck!

This is actually pretty easy to answer (imo), just compare the returns of real estate from now until 59.5 and the returns on a 401k.  To make things simple let's say you start at 25 and start withdrawing at 60, so 35 years total.  If you invest 5k today in real estate and compound it at 10% return for 35 years that's roughly 140k. Alternatively you invest 5k today, double it to 10k (let's say they match up to 5k)  and compound at a very generous 7%, that's about 106k.  You lose about 35k every year you choose a 401k over real estate.  

I'd choose 401k for only the following:

1.  You're new to real estate and might quit the game

2. You want invested money that's 100% protected if you go under (it's protected from bankruptcy)

3.  You plan to invest money anyway into the stock market(etfs or index funds I hope) OR bonds.  In this case, you might as well get the employer match and let it sit for a while

I'd recommend explicitly listing out your requirements to a rental in a listing.  Let people disqualify themselves first, the remainders are far more likely to follow through,  it will save you a lot of time and a lot of headaches.  As for this couple, I would hard pass.  A felony shows a tremendous amount of irresponsibility, especially if it's his second one 20 years later.  Let me phrase it like this, if you make this exception then you'll make it again.  If not now, this WILL come back to bite you eventually when you give someone a chance and they mess it up.  I'd rather leave a property vacant 2x as long for the right tenant than cave and face the inevitable evictions/headaches/etc.