All Forum Posts by: Blaine Alger

It sucks stay in California and tell all of your friends too......

Just kidding, I am not that knowledgable on the investing market in CA but you don't necessarily see Texans flocking to California to buy property. Over the past month, I have met multiple CA investors who have moved to my market. 

My .02 is that  the CA market has already " been there, done that". I think there is much more upside in Texas relative to price and  our political environment is more friendly to landlords/investors.

You can come, but just be sure to tell everyone back home how "bad" it is once you get here.

I think I need a little more clarification to give you a decent answer. What do you mean by pulling out your equity when you obtain 30%? 

In order to do this, you would need to do some time of forced appreciation to be able to pull out a sizable amount. The banks will require you to sustain a certain LTV (loan-to-value). So if you have a 100k property, most banks will only finance 75%-80%. Once you get to 30% equity you might only be allowed to pull out 10k, which is a decent amount but I don't know if it would be worth your while to refinance to only pull out that amount.

I think what you are trying to go after is a BRRRR. This is when an investor will go out and buy a property with cash, rehab it to increase its value and then refinance to pull out a good chunk of their money to more on to the next deal. This deal would look like this: buy a property for 80k, put 20k into the rehab, it is now worth 120k (this is all hypothetical). You then can go to a bank get a 80% LTV and pull out most of your capital out of the deal to go out and buy the next deal.

Let me know if this makes sense or if I just totally messed you up. 

@Isacc Lightbourn

Congrats on getting a plan together, that is a step in the right direction. 

Only suggestion I would make is to try and get your feet wet in the industry while you are still in school. I am not saying you have to go out and buy your first property but I would encourage you to go out and find an investor and see if they have anything you could help them with. This could be making cold calls, helping them at a project, or maybe utilizing your technological skills to help them upgrade their business.  

There are multiple other ways you could bring value to them, but this is just a start. This will allow you to take action and get a feel for the industry.

You will hear arguments for both sides but my personal opinion is no, unless you are going to actively use it and sell houses at a brokerage.

If you are just going to be an investor and use it for your own properties, I don't think it would be worth it. 

It also gives you another hurdle to over come when talking with sellers and trying to get off market deals. It might scare some sellers off who are predisposed to the idea of a real estate agent which is why they are selling to an investor off market.

I have no experience but i have heard a couple stories of guys that have given it a shot.

It is an interesting strategy but I think it is very difficult and I would think you need prior experience (or partners with experience in the field) in order to pull this off successfully.

The one thing I do know is that the maintenance expense for a gold course is absolutely ridiculous, so just be sure you allocate a sufficient amount towards your expenses if you end up underwriting this. 

Well I would start off by not telling them you are a wholesaler, just say you are a local investor looking to buy a couple more houses. When you start telling people you are a wholesaler, sellers will get confused and you will have a hard time explaining it to them. Just keep it simple.

Then once you break the ice and build some rapport, you will want to try and get the seller to tell you as much as possible about the property. This includes the condition of the property and all the major systems ( roof, HVAC, electrical, plumbing, etc), what the property is rented for, when would they be wanting to sell and what they would be willing to sell at.

These are just a couple things to keep in mind but there are a multitude of other questions you could ask and you will figure it out as you go. I always lead with, "So tell me a little bit about the property." and just see what info they will put on the table.

1)

I think it really depends on what you are looking for. If you are wanting some consistent monthly income and want to avoid capital gains or bumping your income into a different tax bracket, then continue to owner finance them. I think no matter the lending environment, you will always find someone who would rather deal with an individual rather than a bank. If you want to just pull your cash out of the deal and move on to the next deal, then push your buyers to the lenders. I think you can implement a healthy mix of both exit strategies. 

2)

I have no input on this point but I just think it is really cool concept. Let me know if you get any good responses on this. 

 Any time.

Feel free to reach out!

@Ari Hadar

There are plenty of ways a rookie may provide value to an experienced investor. You just have to leverage the skills you already have.

Lets say you are a master at excel, you can approach an investor and see if they need any help creating financial models.

If you have some accounting experience, you can offer to help with booking keeping. 

If you are good with communicating with people, make cold calls for an investor and find them deals (this is how I got started).

If you have no useful skills, just offer your time and drive around neighborhood looking for properties they may be interested in. 

Go check out the local facebook marketplace or craigslist adds. You should be able to spot some wholesalers in your area who are listing their deals on those platforms.

Reach out to them and see if you can help them run their business in return for them teaching you how to get started.