All Forum Posts by: Blaine Alger

Congrats Zach, it sounds like you have a pretty detailed plan.

You asked a bunch of great  questions but I can't type fast enough to answer them all, haha.

I would suggest you get a relator though. Make sure you find someone you like and is familiar with the  lingo. Ideally, you want someone on BP because they will know all of the same strategies. Another benefit of a Realtor is that they will let you know of anything that is about to come on the market and they might get you in before it hits the market.

In regards to putting more than 5% down on an owner occupy:

Im not sure why you would want to do that because then you are gettin rid of one of the main benefit to owner finance loan: a low dwn pmt. Only reason I would put more than 20% is if I was trying to chase more cash flow. But then that might lower your Cash on Cash return. Personally, I would stick with the lower dwn pmt unless it was an unusually situation.

I would be happy to answer any other questions if you want. Send me a message and maybe we can talk sometime next week.

-BA

I would say the best market to start in would be one your are familiar with and have a connection to. Ideally, you would want to start investing locally, but I understand that is not possible for some people.

So if prices are too expensive in your own market I would suggest look in areas where you have family/friends or maybe used to live there.

For example, I live about 3 hours from where I grew up but I still look for deals in that area because I am very familiar with the county and know all the in's and out's.

-BA

If the LLC is just the holding company for your properties, then i would recommend Stessa. I have played around on it a little bit and it is fairly user friendly.

It is an accounting software geared more to rental property owners. If you are doing alot of flips and wholesale through your LLC then I don't think it would be as good and your are better off with quickbooks or wave.

I have an LLC but i use it for Acquisitions and pay myself through it. I don't do my own books but if I were to, I would probably use the free version of Wave. It looks easy to use.

-BA

Well, first off I would suggest to focus in on one thing you want to do. It can be tough to get going when you are bouncing between different ideas (flipping houses, rentals, house hack).

Now once you get some experience then you can dabble around in between different strategies but it would be my advice to just focus on one for now.

If you are gonna be house hacking or just have a rental property or 2, then i don't think a LLC is necessary. Usually a umbrella policy can give you enough protection from liability. Eventually, you will want to move everything into a LLC but at the moment it is not important (others might disagree).

To answer your question on private money, it depends what you are looking for. There is money everywhere but you have to have the right approach and most likely some experience to get access to it. For a beginner, your best bet will be hard money and there are a lot of national and local hard money lenders. Go to your local meet up or ask around and you will find where the money is at.

Feel free to message me if you got any more questions!

-BA

@hugh 

@Account Closedundefined

You are definitely making a valid point and it is very reasonable.

I would be lying if i said a balloon payment didn't stress me out and in a perfect scenario you would want the seller you carry the note for the full 30 yr. However, that's not entirely practical in your normal owner finance deal (from my experience) because sellers want to cash out eventually. For me personally, if it comes to 5 year balloon payment or not buying the property at all, I would pull the trigger and do it. 

And your reasons for looking at seller finance in the first place is spot on. My specific situation: recent college grad, currently "self employed" trying to see what I can do in the RE game before i have to go get a big boy job. So as you can see, I am not a banks most promising prospect but I do have a significant amount of cash saved up so that leaves owner finance as my only option to be able to scale without turning to someone for a cosign on a mortgage. 

I appreciate your input though, that is all very relevant information and I see where you are coming from.

QUESTION FOR YOU:

In your experience, how much rate are you willing to give up in return for a longer balloon?

@Dennis Wayne

So sorry you feel that way but I think you are missing the point. Bigger pockets is a community where investors from all levels of experience can come together to share what they know and grow together. If you want to have a discussion about who is more experienced, I think that is in a different forum, but i'll save you the hassle and give you that title if it makes you feel better. Good chance you are wise beyond my years but thanks to the education that I have received through this amazing community over the years, you can't discredit my knowledge.  

I am just providing my educated personal opinion on the subject to provide others the opportunity  to form their own. There is no right or wrong answer. 

If you are such an expert, give me some concrete details on why you don't like balloons, i have seen you give 0 support to your argument. I genuinely want to hear your opinion so I can educate myself and maybe  be worthy to be in your all mighty  presence one day.

@Dennis Wayne

Congrats.... but i didn't think we were having a competition to see who has done the most owner finance deals. I was just stating my opinion and trying to provide a different perspective.

Like I said, balloons are not ideal but I wouldn't let it stop me from buying a property. But everyone has a different risk tolerance so i can see how one can be predisposed to the idea.

You didn't really provide any reasoning in your initial post as to why you don't like balloons. Come back with something other than one sentence to back up your claim and I would be happy to change my opinion. There could definitely be something I am overlooking, so educate me.

I disagree with @Dennis Wayne about the balloon.

Ideally, you don’t want a balloon but if it’s the only way you are able to get into the property then I would go for it. It’s better than not buying the property and then you have 5 years to get your financing right and go get a bank loan on the property and pay off the owner finance. You will also build equity over the ballon period and might not even have to bring a down payment to the bank.

5 years is the lowest I would go, so try to push for a little longer just in case there is a crash. But if you feel good about the property, don’t let the ballon scare you off.

@Alex Folchi

Those are pretty decent terms.

Is that ok just the seller carry back or are you talking about seller finance of the whole property?

( I was under the impression you were talking about seller carry back where the owner carries some of the down payment for you but you still and go get bank financing)

It is great that you are realizing the power of RE so early on! You are definitely in the right place and I would encourage you to continue to participate on BP and take in all the info you can.

 I would like to emphasis the finance part that @Benjamin Seibert mentioned. Learn how to manage and save your money now and it will definitely help you out in the long run. When you look good on paper, the banks will love you and it will be easier to buy houses.

I encourage you to try to get out there and take real action. You learn so much and gain confidence when you actually try to do things opposed to just reading about them. I know it can be kinda hard at such a young age but there are ways you can get your feet wet. Try to find someone who is doing what you want to do and reach out to them and see how you can help them. Opportunities like this are great learning experiences! 

Feel free to send me a message if you have any other questions. I'm happy to help!

-BA