All Forum Posts by: Andrew Bosworth

Jaya,

I admire your desire to get started!  Steelton has a few nice neighborhoods, however, this is not necessarily the most desirable investment location.  It was a former steel town which companies abandoned years ago.  Rents may increase a bit over time, but appreciation will, IMO, be hard to achieve here.  The Harrisburg area is a decent market, but there are a lot of areas you want to avoid.  Without knowing much about your property it is hard to comment, however, I would proceed with caution in future investments. 

Know the area you are investing!  Don't get yourself into a bad situation simply because it is in your price range.  There are a lot of "affordable" properties around here, but most you'd want to pass on. 

Take it slow.  If you can't afford the area you want to invest in, then save more, find a partner or get creative in some other way.  BP is full of good resources and a bunch of great people willing to help.

Does anyone have a generic investor agreement letter they have used in the past?  I am raising capital and have been asked by an investor to provide them with something in writing outlining the agreement.

Fairly straight-forward agreement: I borrow their cash for a period of time for the purchase/reno of a property, in return for a fixed rate of return.  Personally guaranteed.

Taylor, at the end of the day it's your name on the property and your investment.  Only you can determine what is best for you.  If you feel you need to take action, do it.  Otherwise, rework your lease agreements for next time!

You'll figure it out.  Best wishes!

Scott Nipp,

Thanks for the feedback. I'm new at this too! I agree with your comments. The important thing to do when making an offer is to be able to back it up with numbers. If you can do this, it seems the lender is going to be much more inclined to provide the loan you are seeking. My goal in this deal is going to be to consolidate to a single mortgage (to pay the HELOC back asap).

Jayme Mendal,

You nailed it, getting the property below value is key - though determining market value on a MF (which I am pursuing) can be difficult.  When working my numbers for a potential property I work backwards to determine my asking price - I estimate 100% financing with a goal of $200 cash flow/unit/month.  If I can achieve a minimum of $200/unit with 100% financing, then it is worth pursuing. 

With that said, the current rate for a HELOC is lower than current mortgage rates, though the HELOC typically has a 20 year term and variable rates (in turn a higher payment each month than a traditional 30 year loan). This doesn't mean you need to pay off the HELOC right away, but it is probably wise to consolidate the debt into a single loan and take advantage of current low rates (just my newbie opinion!).

Jeff S,

"Really though the biggest risk is being afraid to take a risk and ending up with very little IMO."  - Well said! 

I made a recent all-cash offer with a HELOC (I was outbid), but am now considering using a HELOC for the down payment on a larger property.

Has anyone here used a HELOC for the down payment, then secured a single mortgage for the entire amount (to repay the HELOC right away)? If so, would you recommend this approach?

Thank Rob K!  Probably should have read the 4 Hour Body in preparation to going to the beach...

Thanks Al.  I've never heard of Rhinoceros Success - the title has me interested!

Thanks John! 

Any REI reading suggestions while at the beach for a week? I have three kids...so I 'm not looking to dive into anything overly technical.

Last summer was 4 Hour Work Week...

Bryan, 

A year later...  What offer price did you decide on?  Did you get property?