All Forum Posts by: Andrew Angerer

How much equity do you have in your current duplex? If it is reasonable you should consider a HELOC. It is like a credit card but attached to your property so the interest rate is not super high. I recently got one, and it was super easy to set up, and almost free to acquire now I have access to 55k for a new property.

If your equity is too small, consider private money lenders, right now, the economy feels good for many people (despite some warnings) thus money is easy to come by. You can find people that have big savings accounts (among others) and convince them that you can grow their money faster than what it currently is doing. 

There are many ways besides these two, I hope this helps!

--Andrew

Hey everyone, I'm glad to be back from getting married and going on a cruise! It was a wonderful wedding day everything went right and the honeymoon was amazing. I am now transitioning back into the real world and getting back on the horse with real estate investing. Tell me something funny that happened on your wedding day!

Right now, it is finding a value add property that is in a good neighborhood that is a good price.  I am sure they are out there but It would be great if there were more. 

I've just got to look for them.

I recently got a HELOC for 6.5% with my credit score, I was able to get the lowest APR but I chose to get 90% of my home equity value so it did increase.

This was at a local credit union in Dayton Ohio.

Looks decent,

Property values almost always increase over time, so be sure to have that in your calculator, it will make your long term investment look so much better!

Are you sure that you can sell the house for that much after you have put the repairs in? If not look at comparable houses that have sold recently, near by to get a better idea. 

Also, what is your plan with this property? buy and hold or fix and flip?

 Closing costs are typically the money that you pay to the real estate agent, broker and title company (among other things )

That's great you can increase your rents, but keep in mind you need to figure a cost per each unit to renovate and add that to your calculator.

It isn't impossible to get a loan for 0% down of YOUR money but you need to use other people's money, try to find some investors that this place has potential to get a return on their money and show your confidence in how well you can manage it. 

Also, by putting down some money you are lowering the monthly costs, thus your cash flow will improve. Zero down loans may exist but probably only do for the super rich who could probably pay them back with their own money. Keep in mind that the lower down you have on a property the higher your interest rates will be, plus you will need to buy insurance for anything lower than 20% and that will hurt your cashflow.

Research creative financing methods if you are serious about wanting this property.

Great property and it sounds like you made some great money on it. Always glad to see a success story!

Hi Isar,

  First, your closing costs look very low for a 800k property, typically assume at least 5.5% for this, which would be $44,000.

 Second, typically even if properties are in great shape you still will want to spend some money on repairs, typically one of the better ways to make money in real estate is to find properties that can have value added to them, via hiring contractors to do repairs and improve the property. 

Third, your cashflow is super low, and is comparable to what single family houses can make honestly in cashflow. You may need to consider finding a way to lower your initial asking cost, or raise rents. Keep in mind raising the rents will only work if you happen to have found a property that has rents lower than market value, if not this property is a bust.

Last, you probably won't be taken seriously if you think you can get this property with no money down.  Usually when other people say you can buy properties with low or no money down they mean YOUR money, usually you need a hard money lender that will give you money, then you use that money to invest in a property. Almost all banks want you to have "some skin in the game" or have some money in the property. Assume that you will need at least 20% plus some extra for fees.  

I'm not trying to pick apart your calculation but rather give you some constructive feedback. 

I hope this helps,

Andrew Angerer

 You are welcome, the biggest part of doing real estate is simply knowing how to do things right. You were very smart to come to bigger pockets first to have others pick apart your deal.

Don't be afraid to say you do not know how to do something, just spend time learning and ask thoughtful questions and you will be ready to invest in no time!

Best of luck,

Andrew A.