All Forum Posts by: Blaine Alger

Hey Ben, 

From my perspective, I think you would be able to get approved for something. I'm not sure if the mortgage industry in Canada is the same as the US, but 50k seems like a substantial enough income to cover a mortgage but i know they also take into account your existing debt-to-income. I have heard of people who have actually paid off their student loans by buying a house hack and using the saved income to pay off their debts. 

I think you should just talk with a lender. They will be able to more accurately answer your question then I would and if you aren't able to get approved, then they would be able to tell you what you need to do in order to get approved in the future. 

-BA

I would suggest you continue to dive into all of the resources that BP offers and educate yourself about the REI world. There is ton of FREE learning resources on here and it is amazing the amount of information one can obtain by consistently participating on the site.

Sounds like you are off to a good financial start but given your age, I don't know if you have a consistent source of income yet. If you do, great! Go talk with a lender let them take a more in depth analysis at your financials and they will be able to tell you what you can get pre- approved for or they'll let you know what you will have to do to become bankable.  If you are unable to get a loan by yourself, you can always see if someone would co-sign for you or seek out owner finance/creative finance opportunities.

If you have any other questions, feel free to reach out!

-BA

Getting past the first house is the biggest challenge in my opinion. There are so many "what if's" and it can feel very daunting at first glance. Once you work your way through the first property, and get the template down, then it is just copy and paste for the next deal. 

Here are the steps i would focus on in order to get started:

-Make sure your financing is lined up. Anyone who tells you that you can buy houses  with zero money is full of it. It is not impossible but i don't see how it is feasible for someone who is starting out and has no track record. Once you gain more experience then you can start looking for those no-money deals, but at first, just stick to the easy stuff (20-25% down, personal rates, 30 year term).

-Know how to run your #'s.  You definitely don't want to start off your investing career with a deal that loses money each month. 

    A.  Get your market rent. I use the rent-o-meter app to get a ballpark and then i cross reference that with listings I see on facebook marketplace/Zillow to get the exact rent amount nailed down. 

B. Identify all expenses. You will have your mortgage payment but then be sure to account for taxes and insurance. This total payment is called PITI. Then I take away 25% from the rent amount to account for the variable expenses (property mgt, vaccines, cap ex, repairs/maintenance). Don't forget to check for unusually expenses like HOA, trash or utilities if the units don't have separate meters. Then take the rent, subtract PITI ,variable expense and then you are left with your pure cash flow.

-Go find some deals. Start by getting connected to a RE agent in your market,I would suggest trying to find someone on BP because they will be up to date with the lingo and have somewhat of an investor mindset. Something I did not know when starting out, is that a RE agent is free for the buyer because the seller is the one paying the commission. So there shouldn't be any reason to go meet with someone and have them start looking for deals for you. If your market is super competitive, then you might want to consider looking into off market deals but that is a completely different conversation.  
 

I hope this doesn't feel  too vague because i always try to give concrete advice but if it does, feel free to message me and I would be happy to go more in depth.

-BA

@Bruce Lynn

Ahh, see thats the thing. Waco is a great rental market because there are so many blue collar jobs that provide consistent demand for housing (I have heard that 80% of homes in Waco-proper are non owner occupied) but there is a lack of white collar jobs that would keep Baylor graduates here or bring working professionals from Austin/Dallas. I think those are the type of jobs Waco needs in order to really take off.

Most of the people I see that are moving into Waco are out-of staters that have their own business or work from home so its not like there is a strong supply of decent paying jobs.  I know an investor  from LA who is in the entertainment industry and moved out to Waco but he is able to work remote. There is another family I know who moved from Oregon but they have their own cabinet business.  Very rarely do I ever meet people who moved to Waco for a specific job that already existed and that is because there are none/ they are hard to find. 

Chip and Jo cannot carry Waco on their back forever. In order for Waco to realize its potential, they need more corporations that will provide an influx of jobs for college graduates and higher earners. But the issue with that is we are still 1.5 hours from the nearest major airport. We do have a regional airport that provides connecting flights to Dallas but it is unreliable/expensive and they are unable to extend the runway to land  bigger commercial jets and don't have room to expand the common areas that would accommodate more customers. At one time, Southwest talked about operating out of the airport over by TSTC instead of Love field. This area had room for the infrastructure to accommodate bigger jets  and the increased customer traffic. However, that deal fell apart and Waco missed a big opportunity. 

In terms of economic development, we just had a new mayor elected this past fall, Dylan Meeks. He worked with a small venture capital firm in town for a while and he is currently the GC for a big title company. I think he has the right business/real estate mind and I am excited to see what he will be able to do with the city. I am hoping he will find a way to bring those big firms in to town that'll provide that supply of white collar jobs.  

If he is able to put the pieces together to make that happen, then the world better watch out for WACKO, TX! 

-BA

@Daniel Meador

I'll send you a PM and try to shoot you in the right direction.

Check out hipcamp.

It's airbnb for camping and they have been getting alot of action from venture capitalist over the last couple years. I have not used it personally but like the company and think its a good idea.

I would suggest you go talk with a lender to see if you can even get approved for something. I'm not sure what your financial's look like but since you are young I know your credit history is most likely fairly new and a lender might have problems with that.

If you can't get pre approved, then find out what you have to do over the next 2 years in order to make it happen. 

Hey Johnny,

I do a little bit of wholesaling every now and then.  

First advice i would give you is that wholesaling is hard. It's not as easy as everyone out there on the internet makes it out to be. If you expect you are gonna send a couple text messages or call a seller or 2 then walk away with a 10k check, then you are mistaken. 

You need to learn how to communicate with others, value properties, estimate rehab costs and know the legal standing of wholesaling in your market.  No doubt it's hard but if you are willing to hustle and  put in the work then there is some money to be made. 

Shoot me a message if you got any other questions. Always happy to help.

-BA

Tyler, congrats on finding your first potential deal. 

To answer your questions:

1-4. 

Buying the property in your LLC would be ideal but it can be difficult to do that sometimes because when you use your LLC to buy the property/get the loan, the bank is no longer looking at your credit, they are looking at the credit of the business/LLC. I would guess since yall just set up the LLC then your business has no existing credit. There might be ways you can get around this but you have to go talk to the bank and see. I'm guessing if you signed a personal guarantee on the debt then they might let you get around it. Also with an LLC you will be looking at more commercial loan terms which will be less favorable than personal rates. You would be seeing terms that would be 15-20 yrs and rates that are between 4%-5%. This will make your payment higher and reduce cash flow.

I would recommend to just get the loan in your own name for the advantage of better terms. You could even choose to live in one of the units and get in to the deal for a lower down payment (3.5%-5%). You might be able to get in for less than 20% but you will have to shop around at some local credit unions/community banks but you will have to carry PMI (private mortgage insurance) regardless. I'm not sure how much you have shopped around but some banks will require 25% down for an investment property.

5.

It would definitely help to bring your banker the PDF from the BP calculators. You have to remember that it is just a person you are talking to and they might be able to be persuaded by you presenting them the numbers in an organized and professional manner. However ,at the same time, they do have a bottom line and they won't pass it no matter how pretty your spreadsheet looks. But it never hurts to give it a try and ask. 

Hope this helps.

-Ba

Just go to zillow and change the filters to show what is for rent instead of what is for sale.

This will just show you whats on the market and you can get a look at the condition of the property and compare that to the rent they are asking. 

Compare that to your property and then you can see about how much someone might be willing to pay.