All Forum Posts by: Anthony Barrueco

I loved Atomic Habits!  The habits that help me overall definitely contribute to my success as an investor.  Having a morning routine, getting a workout or walk in, making sure I check email in intervals, stay off Facebook, going to bed at a decent hour, etc are all things that help me be personally and professionally successful.

@Anthony Barrueco - for a mind-shift change around habits and daily actions, I'd highly recommend Atomic Habits and Extreme Ownership.  

Atomic Habits focuses on how your daily decisions and actions are evidence of who you are and what you want to become.  There is never one defining moment, but a series of small moments that don't look like they're moving the needle (and thus, most people quit as they don't see the instant result), but these small unnoticeable decisions/actions are the foundation of your identity. 

Extreme Ownership will radically shift your mindset to own everything and never point the finger again. One of the most powerful quotes to me is "discipline is the path to freedom." The author has also been on the BP podcast if you want to get a free peak into the high-level narrative of the book. 

For more tactical advise on daily habits, check out Miracle Morning and the highly touted SAVERS routine. 

I certainty agree with Adam's advice. As a first-time investor, it's always best to start close to home. That being said, I wouldn't limit yourself to just Upstate New York. I would also consider looking at properties in parts of New Jersey and Connecticut -- pretty much anywhere within an hour's drive of you.

In 13' I bought a four unit building, all 2/1's with a 203k. All in around $360k, I did the streamlined version. So my repairs were only cosmetic, my value add was solving the issues at the property and filling vacancies.

I refi'd it two years later to get rid of PMI (monthly insurance on your loan since you're only putting 3.5% down) Its doubled in value and earns really well, what made it a great deal is the combination of the awesome financing to let a new guy get started and an awesome property.

Remember it won't turn a bad deal into a good deal if the property just sucks. Match it with a good place that fits your needs and it can be a new investor home run. The process was fun, but I wouldn't want to try it with a complicated property. You want to be in and out and off the banks radar and everyone paid asap with these things. Then use your own cash to get wild once they are gone.

I've also used this type of loan on a SFR conventional where I put 20% and got $60k to renovate my personal home. But I HAD to get permits etc, which was ok for me but again.. you're dealing with a third party who wants all the details. Its kinda annoying but worth it in the right scenario.

Both were fun, stressful and complicated processes but not that bad. Just a new aspect of finance and construction. 

@Anthony Barrueco you should have your team together so it makes the process smoother. Real estate agent(s), contractor(s), title company, lenders, property management, etc.

@Anthony Barrueco A rehab style lender will help you accomplish the goal. The loan will be either a percentage of the purchase & rehab amounts OR a percentage of the ARV (after repaired value), whichever is less. Some lenders will go down to a $50K min. loan amount.

Things to keep in mind: 

If you are a first time investor, the lender may want to see a mid-FICO of 660-680+, so they know that you can qualify to refi into a long-term loan

Lenders love cash reserves. The more the better, especially in the current COVID market

Take title in an LLC on the short-term loan (purchase & rehab) and the long-term loan also. The rate will be a little higher, and the loan leverage a little lower than if you took title in your name, but it should keep the loan off your credit report

Dealing with contractors can be a challenge even when the project is local to you, but from a distance, even more so. Target a rehab project that will not be too extensive. More along the lines of cosmetics (kitchen cabinet replacement, vanity replacement, toilet replacement, carpet replacement, painting, etc.)  Try to stay away from new framing, new electrical, plumbing, heating, etc. Swapping parts should be the focus of the rehab.

Never pay contractors in advance for labor. Always get eyes on the progress before cutting checks.

Best of luck.

@Anthony Barrueco Agree with @Will Fraser. Hard money would be the way to go but I know on our end we'd want to make sure you have some boots on the ground to monitor the project if you aren't able to physically keep tabs.