All Forum Posts by: Bonnie Low

Yes, use your current properties as leverage, though I understand the desire to hang onto something with a lot of equity for safekeeping. That being said, your equity position doesn't have to be 100%. You could take out a HELOC on one or more of the paid off properties. The beauty of a HELOC is that you only pay on it when you are actually using it so it's there when you need it and costs you nothing when you're not using it. You could also 1031 exchange one or more of the paid off properties into something bigger as others have recommended. You are fortunate to be in the position you're in because you have lots of options. As long as you keeping moving forward you're growing. Some people only consider "scaling" to be big leaps and bounds, but real estate investing is a long game and that constant forward movement eventually equals scale.

Fortunately for you the cash flow still works out so this is just a temporary bump in the road. But, yes, you absolutely have been poorly represented by your Realtor and attorney. It's hard to say if it was intentional or just negligent, but just like you are responsible to do your due diligence, so are they, and they need to be working FOR you. Sounds like they were primarily working for themselves. Since good deals are challenging to find, you might go forward with this one and just take your lumps. But since you have written communications from your Realtor stating the tenant was month to month and the attorney didn't follow up on their end either, I would try to use that as leverage to get them to reduce their fees or commission to make up for your lost rental income if not in whole then at least partially. It's, at the very least, worth a conversation with them. You never know until you ask. If they're willing to work with you on this you might be able to salvage the relationship, but I'd probably find a better team to represent you next time. 

If you have no money, you'll need to partner with someone who does because flips absolutely require money. You might find a partner who wants to loan you the funds in exchange for partial ownership of the property with him/her. Or they might want to fund it if you find the deal and provide the sweat equity. Check out Brandon Turner's book on investing with no and low money down. There are some great ideas in there. 

I think people expect to hit a home run the first time and when they don't, they either feel they failed or get gun shy about trying again. In reality, it's difficult to get it exactly right the first time. But that doesn't mean it's a failure, it's jut not as good a deal as it might have been. Investing is like any other skill, you have to practice it. Mitigate risk as much as possible when you get started, but keep pushing through even when the returns aren't exactly what you expected.

Mortgage rates are already so low, even if you just have good but not great credit. It's hard to imagine that your rate could be so much lower with that rate buy down that it would pencil. How many months do you have to own the mortgage to earn back the $50k? And what else could you do with that $50k during that same time frame to actually be earning money on it instead? Most people are trying to stay as liquid as possible right now to see what the market is going to do so you might want to hang onto that cash and you're still likely to have a good interest rate if not from that lender than from another. 

Have you been to the property yourself and paid for a third party inspection? Getting your own eyes on it and that of someone qualified that you trust is the best way to know what you're working with. The BP calculators are great for making sure you aren't missing any line items. It should be easy to verify market rents and actual rents. Don't settle for the seller stated rents. Ask to see the rent rolls to verify. Asking to see maintenance records will also help you verify if there's deferred maintenance that the seller is trying to get out of. Finally, the seller might just be tired of being a landlord, looking to get out from under the property and whatever debt they owe on it or maybe they're spooked by the eviction moratorium and their tenants have stopped paying rent. It could just also be a good deal. I hope that's the case!

I think I'd start by talking to the County building department or assessor's office to see where the property line actually is. Is the garage actually on her property or is the property boundary drawn incorrectly and is actually on his? It's not uncommon for fences and other property lines to be out of alignment with the official record. This happened to our own property so when we rebuilt our fences, we had it surveyed and put up the new fence in the right spot to avoid any property line disputes later down the road when we sell. I'd also want to know if either she has the right to sell you the property if he "owns" a building on it or, more likely, if he has any legal claim to the structure if it really is built on her property. It sounds like more of a handshake agreement and that could really trip you up later if you try to sell it or even refinance it. It doesn't mean the deal can't be done, but if it was me I'd want to take the additional steps to make sure it an properly convey to me. 

It would be more than worth it to consult a real estate attorney in New York to find out if and how to do this legally. This situation raises a few red flags and I would want an attorney to make sure it's all on the up and up before putting any money forward or entering into a contract. It would be money well spent. 

Welcome, Kyle, and congratulations for getting started so early in real estate! Don't let your age deter you. There are plenty of young investors who are absolutely killing it. Have you thought about starting out with a house hack? Apartments are pretty ambitious and house hacking would give you the dual advantage of getting your feet wet and taking care of your own housing needs. As a first time home buyer you will be able to qualify for very low down payment so the barrier to entry isn't much and having others help pay your mortgage has some pretty distinct advantages, too. If you're willing to roll up your sleeves, you can start with a property that needs some work, add some value to it then BRRRR in a year or two when you're ready to move up. This is one of the fastest ways to get started. Good luck to you!

Ours is a pretty hot market, too. The houses I see sitting on the market a relatively long time are either a) over priced and the seller won't or can't come down on the price or b) they're just weird houses. In scenario a, you have to just hope that over time they'll come to their senses and lower the price to where it should be. In which case it helps to prepare yourself to be first in line. You can do that by submitting an offer now where you think it should be. If they eventually decide to lower their price they might reach out to you. In scenario b, weird houses are difficult and costly to work with. "Weird" can and does encompass SO many things. I've seen houses with strange rooms and funky spaces that people just don't know what to do with. Case in point: what appeared to be a normal 2-story house from the outside but we got inside and realized that the tiny, cramped central section of the house was a single wide trailer (yep, still had the axle underneath it) and they had expanded (with no rhyme or reason) on every side of the single wide - include building a second story on top of it! Or a house with an entire second story (2 bedrooms and a bath) with a ceiling height of 5'10". Stuff like that is costly to fix and sometimes the ARV just doesn't justify it. And then there are things like foundation issues that scare people off. They can be dealt with but most buyers don't want to take the risk. I keep saying I'm going to publish a coffee table book someday with pictures of all the weird things we've seen in houses.