All Forum Posts by: Aaron Lee Murphy

@Alfred Harris

So I gave an example based on you funding the purchase and the rehab. Generally, in most cases a Bank won't loan on a property that needs a lot of rehab. But, lets say you use a hard money lender for the purchase and a private investor for the rehab costs. So yes, you'd have to pay those lenders back, plus interest. Using the same example...lets say you use all $80,000 (re-finance) to pay back your lenders. That's assuming you borrowed $65,000 and payed another $15,000 in interest and holding costs. You still walk away from the deal with a stabilized property that's cash flowing. Then you do it again...and again...and again...using other peoples money. It works the same whether its your money or not. 

@Alfred Harris

Example:

You buy a property for $40,000

You rehab the property for $25,000

You now have $65,000 in the property

You then stabilize the property by renting it.

Once the property is stabilized...you get the property appraised.

Let's say the property appraises for $100,000

You then refinance the property at 80% (LTV) for $80,000

So you can now pull out $65,000 you initially put in and then leave the additional $15,000 in as equity

..or you can take out the whole $80,000

So now you can do it all over again...and again...and again... using that same $65,000

Hope that helps...

@Meryl McElwain

The audience is always the motivated seller. The art of wholesaling is to find out the sellers motivation, and being capable of tapping into that motivation in order to get the home under contract. Motivation can come in many forms, such as... Retirement, moving to another state, medical issues, need cash for kids college, spouse died, inherited a distressed property, etc.

Many people will sell their home for a discount (wholesale price) in order to move on with their life. A good and seasoned whole-seller skillfully finds these people and are able to come to terms that benefit both parties.

Books

The Real Estate Wholesaling Bible ... Than Merrill

The Art of Wholesaling Properties ... Aram Shah

@Andrew Votsis

I live in California and am dealing with a high priced market as well. If you find that your particular market won't work...then the idea is to try and find a market right outside your town/city. I don't think that trying to invest out of state is necessarily always the next best option, especially when your not familiar with those markets. If investing out of state is subsequently your only option, then choose a market that you might have a relative in, or someone you can trust to be your boots on the ground. 

If you're absolutely motivated to investing in your current market, then I would suggest finding properties in distressed areas...(maybe C- or D properties) with an opportunity to add value. However, distressed areas come with their own challenges. 

Good Luck !!!

@David Tsang

Try checking in the Marketplace on the BiggerPockets website. There is where you can find properties for sale. Good luck !!

@Kim Lanclos

You can access those at the filePlace on the BiggerPockets tools area on your dashboard. Not sure, but, you might have to be a plus or pro member. Good Luck !!!

@Mark K.

The best thing you can do is use leverage when buying property. Leverage is your friend. The more personal cash you put into a property...lowers your cash on cash return % (ROI). The point is to use as much leverage as necessary without over-leveraging. If I were in your position I would keep the local rental property you already have to get a HELOC and use that $$ to purchase your second property in which you can do the BRRRR method (which is option 1 in your post). Pull the money back out when you refinance (cash back) so you can pay back the cash (HELOC). Then do it again...and again...and again. The rental property is your foundation to grow your portfolio. You're in a far better position to succeed by keeping the rental property you already have and growing from that.

Good Luck !!!

Yes , that is a common method for finding off-market deals. Craigslist is a good place to start. Make sure you target mom and pop listings. They're easy to identify.

Good Luck !!

@Alexander Ball

GO TO THE SEARCH BAR AND TYPE IN : "EDUCATE ME , RENTING FURNISHED ROOMS "

@Roy N. answers this question very well.

Hey Michael , It would be a good idea for you  to search the forums for this particular subject you are inquiring about...there's endless amount of information that has been posted already. It would be best to seek out a real estate attorney in the state you plan to invest in.  Good Luck !!!