All Forum Posts by: Alexander Zurn

@Yashar Basmenji ask your loan officer about the California First Time Homebuyer Program. Most states offer them. Is the property going to be owner occupied? Aside from standard loan qualifications (with the exception of lower income required to qualify), owner occupancy is an important factor. In some cases they have programs that help with Down payment assistance, making you spend less out of pocket.

Good luck!

@Christian Reyes first think of every and any way to reduce expenses and increase income. Listen to podcasts and read forums/blogs for ideas.

A popular strategy is also to consider having the taxes lowered. I don't know how much this may or may not help but you can go to court and ask that they be lowered to a more comparable homes (do some research on comps with lower assessed value and therefore lower taxes). NY taxes are crazy though so I don't know if this is normal or not.

Another option is to search just outside where the high taxes are.

Good luck!

@Steve Romano go to trulia.com - put in address and scroll down the addresses page - a crime report will color the mapped area surrounding the address in green (good), yellow (decent) or red (bad). It will also provide a list of each crime directly next to the colored map.

Good luck!

@Kalubalu Shah This is a classic question not only for beginners.

Cash Pros: no mortgage, ability to take it all out in refinance, can leverage (finance) House 2 b/c House 1 is all cash

Cash cons: the cash is temporarily (or permanently) gone, not leveraging the most out of your dollar, if the property doesn't refinance where you think it should - you can't get all your cash back

Loan Pro: potential to maximize your leveraging ability, tax incentives, experience in going through the loan process

Loan Cons: holding costs/mortgage payment, acquire debt, interest rates rising make it tough to refinance (for the time being)

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Depending on the amount of capital you have, I might recommend the BRRRR strategy. Further detail below but start researching the BRRRR strategy.

BRRRR

Step 1: Buy - buy distressed property all cash

Step 2: Rehab - Rehab the property using cash

Step 3: Rent - Rent the property

Step 4: Refinance - Cash out refi the property to take out the money you spent on buying the house and the rehab (make sure the rent covers your new mortgage & expenses - this is part of your up front analysis)

Step 5: Repeat - repeat the process

Good luck!

@Swethareddy Rachumalla is you spend the $1500 now I feel it is fair to assume that you will have to eventually spend the $4000 (maybe more) to fully replace down the line. If you can afford it, I would do the $4000. I don't know if you're trying to rent or resell but a new roof will only help complete either strategy.

Good luck!

@Sasha Josephs good buyers/investors that you want on your team will not be pushing you for a deal. For up front with them. Tell them you are looking and when you find one you just want to have some one that would be interested. This could be a good influence towards finding a mentor as well.

@David Walls brings up a good point, don't run away from the deal because you don't have buyers. Heck, maybe you'll get your buyers list through finding great deals (aka sellers).

The more you ask and read about, the more you'll develop a plan of action that suits you.

@Christopher Abernathy your individual profiles aside - it happens sometimes that funds run out. However that does not mean all of California Department of Housing is out of funds. Google "first time homebuyer in California". Most states offer great first time homebuyer programs that give you the opportunity for a 2nd mortgage (downpayment assistance) to make it $0 out of pocket - minus a few specific fees. These programs are generally pretty good and worth using while you're an early investor.

I would recommend doing your homework on their programs and then contacting a participating lender to discuss further. Good luck

@Sasha Josephs I would recommend buyers because what if you find a seller today... who does the property go to? Once you find these sellers they will want to sell quickly so it is important to have buyers lined up first.

Good luck!

@Steve Connolly if you are a wholesaler you bring deals that you have gotten under contract to other investors that will pay you a fee (amount depends on how good the deal is) for bringing them the deal.

For example: Let's say you come across a property that you can get under contract for 40% below assessed and actual value (i.e. the property is assessed at and comps confirm its value of $100,000 - you get it under contract for $60,000 because you know the owner wants to get rid of it and it needs about 10k worth of work). Once you have it under contract, you bring it to your list of cash buyers that you've spent months acquiring and show them the numbers in a nicely printed PDF from the BP Wholesale Calculator. You tell them "I'll give it to you for $70,000 - you put the 10k in so you're all in $80,000 - then resell for $100,000 - a gain of $20,000!" (or something like that..).

You and your cash buyer agree to a deal where he/she will buy it at $70,000. Upon closing, your cash buyer gives you $60,000 to close with the property's owner. Once closed and you technically own it, you go to another room and resell it to your cash buyer for $10,000. You spent none of your money and you made $10,000 with no property to show (which is what you set out for).

A few of the points may change of course like the numbers, a double closing, your relationship with the owner and your cash buyer are vital. It's very difficult but is "the rage" for a reason. I must put the disclaimer that it is very difficult and takes time to master as well a lot of time! (Meant to repeat myself)

Hope that helped. Good luck!

@Timothy Howell when you close on an FHA loan, you will sign an owner occupancy cert stating that you will occupy the home for at least 1 year before moving or renting out.

If there are other aspects to your questions let me know.

Good luck!