All Forum Posts by: Andrew Ware

Great show Ryan Murdock !

Welcome to BP Harrison! I'm up in Gardiner. Similar to you in going to try to get a property management job while I work on my investor dreams.

I'm often a little befuddled when I see complaints about BRRRR or whichever strategy. I'm not so much talking about the original poster because he is looking for solutions. You are a little thin on the monthly rent at .8% monthly rent for 187k property so I'm not surprised the banks aren't jumping at it. It would, however, be a pretty successful flip. You'd get a return of something like 55k-60k after debt service, insurance, realtor, etc? At the very least even with the 5% loan you nearly have all your money out and holding 37.5% equity? I don't understand the complaint. Your profit is sitting in equity and that you have a good condition rentable house. The rest of the "sweat equity" that you'd like to take out has gone to your lender. That's the cost of doing business without capital. Another poster is saying he has a great candidate except he'd be underwater in 6 months. Well that's not even a good candidate. At least not in the position you are in with the money you have available (at least not with my definition of underwater.) It's true BRRRR is not a cure all. And neither is anything else. I'd like to house hack, all I'd have to do is divorce my wife and put my mother in a home. As an actual response to the post I'd try shopping it to 20-30 more lenders not 2 or 3. You've got to find that lender who understands your vision and wants to do business.

No your math doesn't work. You are 80k in your cash and 360 of the banks cash into the property. *IF* you can get 80% LTV on 460k they will give you 368 meaning you just get 8k after paying back loan, and that is assuming they don't charge you any fees or points and good luck with that. There wouldn't be any point in refinancing.

Plus your cashflow is thin.  This would be a pure appreciation play.

How about other things to watch out for like liens, etc.  I have a similar situation in that I have a strong guess that something hidden is going on with a property.  It was pending then fell out.  I was looking at it and met a "new owner" who "bought it 2 months ago" but it is now in pre-forclosure. The price also dropped a lot.  What steps should I not forget?

1. Title search

2. Call the other failed purchaser?

3. Thorough inspection

I'm probably just scared and paranoid.

Welcome aboard Matthew!  I'm in West Gardiner.  I'm trying to do 2-4 unit value add rentals.

Seminars aren't your best bet. You may end up worse off than when you started. Seminars are usually sales pitches or setting you up for one. Can be legit but I feel it's the wrong way to start. Start with books and podcast. Learn learn learn. As you are learning talk about it with everyone who will listen. You will find out that people you know or they know people who are doing what you want to do. My hair stylist has 20 units. My wife's friend's husband has a million dollars and climbing of rentals. A 62 year old guy at work who is earning low 30's at the job is buying SFH's all cash and rehabbing them himself and is now sitting on 5 free and clear houses in 6 years. And there's a lot more. So you asked how I trust them? Well that's the wrong question. How do they trust ME? I paid my dues. I have listened to nearly all of the BP podcasts twice, read a pile and a half of books, I analyze deals and am getting good at it, I have useful advice for people who have been doing this for 10+ years even though I've never done a deal yet, and they can see I've been paying down my debt and getting my credit score back up to get in a better position. I have relationships with these and more people now. I don't want anyone to help me. I need cash it's true. But I'll get what I need by helping someone else. Think about it from their point of view. This guy who mostly knows what he is doing brought them a deal. They check it out and can see it's a really is quite good. It makes sense to them that we really can make a tidy profit even splitting me half. They don't have to do all the work from finding the deal, through rehab and selling it. They sit back, let their money work for them, give me advice, and make sure we are on the right track. They also know that I would do everything in my power to protect their investment, am more worried that they make money because I want to do this many times not just once. On top of all that we (will) have a contract explaining our expectations and what will happen if things go wrong. Here's your homework if you are serious for your situation. Set for Life by Scott Trench The Book on Investing In Real Estate with No (and Low) Money Down by Brandon Turner The Millionaire Real Estate Investor by Jenks , Keller, and Papasan Rich Dad, Poor Dad by Robert Kiyosaki As many of the Bigger Pockets podcasts as you can listen to Max cost $35 unless you can get them free at the library

I started with negative money and I still have no money. But honestly I'm getting a lot closer. I just analyzed a deal that was a good deal with room to flip. And I had some people interested in money partnering at $40k for the house. Turns out the docs weren't updated and the house sold 2 months ago for $30k. I conservatively estimated that there was $45k of value after rehab costs so that's more like $55k. If I can bring deals like that to people they will be interested. So I'd say. Yes you can start with no money. But it's hard work, you better figure out what you are doing, and you really need to start positioning yourself to be able to buy.

This is typically done for tax purposes, frequently in a trust but not always. They potentially could also do it for asset protection or credit purposes. This isn't an unusual strategy if they are in a very high tax bracket and you are young. Or if they are elderly and try to make things easy to avoid probate for estate planning. It can be done poorly though and cause unintended consequences including higher estate taxes or difficulty with ownership due to liens, lawsuits, divorce, etc.

How does one go about finding the larger players in a town? Say at least 50 units. I figure just talking to people would work. The only other things I can think of is tax rolls or buying a list. The REIA I know about is for a large region. I'm not ready to invest currently but am looking to be useful in Brunswick or Topsham Maine until I am.