All Forum Posts by: Brandon Logan

Sounds like you should have plenty of time between 7-10pm and weekends. =-)

You will only get out of this business what you put in. Put the hours in and everything else will fall in place.  

 Most banks like a 6 month seasoning period

Corey, Thank you for the question.

Lot's to discuss here. First and foremost, I don't look at appreciation. I'm playing the long game with my rentals so I'm not selling or do I plan to refi pulling money out. I'm not saying appreciation isn't a great thing and a buying factor; more or less I'm saying it's not a major factor within my plan. There is more to the benefits of rentals than stated above. You're not only getting the appreciation your getting cash flow, debt service and depreciation. When you factor in all the true benefits re blows stocks away. It's not even a close ROI. There is a reason more millionaires have been made through real estate than stocks or any other profession for that matter. There is also a reason reits are often the best producing stocks.The other key factory is the leverage of re. Can't really do that with stocks.

Let's chat about stocks. 

Here is my take and this is just my humble opinion. I started right before the big crash and there was a point in my life where I use to think poor me getting into re and 12 months later the bottom fell out. I was wrong. I learned a ton. At that time I was buying and flipping houses. It didn't take me long to realize most of the people I was buying houses from were older retirement aged people. Here is my problem with stocks. When you're young they tell you don't worry about the market fluctuations. Just leave your money in and you'll be fine. I agree when stocks drop don't pull your money out. Market corrections are often 30% or more decline and since 1920 they've happen on average about 7-8 years. Which has consistently been the average retirement cycle of Americans. Crazy coincidence, right? I think not. So right when you're ready to retire the market crashes. Well you need that money and you don't have time for the rebound. I can't tell you how many great people I've met who needed to retire put all their money into stocks and then couldn't retire based on the crash. That's what they teach us, right? Put your money into stocks and pay down your mortgage. I quickly realized putting my money in stocks would make me dependent on the market at the time I wanted to retire. I know I want to retire at 52. I hope I plan it right and the stock market cooperates. Basically, I hope I'm lucky and the market is strong at that time. I knew I didn't want to rely on outside factors planning my retirement so I went towards rentals. If the market crashes when I'm ready I won't care. I'll still be getting my rent checks in the mail every month. Again, I'm not selling so who cares if values fall. Rents went up for me during the last crash. I want residuals. the appreciate just looks good on my PFS and makes the bankers happy. Residuals are the key to everything in my opinion. 

Gotta run to my next appointment. Sorry I didn't spell check or review before posting. I'll look at the other questions this evening. 

Good questions. I have a crazy day today but I'll do my best to answer these this evening. 

Curious if you have advise or tips for building a relationship with the bank.

I'd get with a few banks. Interview them. Do you have any banking connections? Check there first. If not call a few in your direct area. Again, more localized banks. Have a well laid out updated personal financial statement. Be prepared. After that sell them on your plan

I used those numbers for ease of math. I just bought four duplexes in a package and used this loan. Typically, I've found the higher the price the harder to get the full spread. But again even if you don't get it full you still bring less. They'll require the difference or you can lower the rehab funds. 

I don't necessarily discuss with the banks before entering contract. I do my homework make sure numbers work upfront and move quick to contract. It does take more buying opportunities and makes it more difficult to find deals within these parameters. Even if it didn't fit perfectly the bank will go to 80% on noncommercial loans so if the appraisal came in higher than purchase and rehab it was still less down. That said, I missed plenty of deals in this stage of my investing career although I didn't necessarily look at it that way. I knew I didn't have the 20% and it would take me months if not years to save it. With that in mind I got to work looking specifically for deals that fit this loan. I made more offers with structure. I was told no more but it didn't really matter to me. I was focused on scaling with out multiple investor partners. 

I guess I should add the bank also lends me the rehab monies. So the bank will lend me 80k total for the property. An important piece of information. ;-)

Dan, 

Great question. Sorry for the delay my day got away from me. This loan was extremely important for me while trying to leverage my lack of funds into multiple properties. Typically, banks will lend up to 75-80% loan to value. This is why most investors put down 20%. In the beginning I didn't have 20% so I knew I wouldn't get far going the traditional route. I started using future value appraisals. How this works is fairly simple. First and foremost, when approaching a bank you tell them this is the type of loan you want. Do not offer 20% down. that's not an option. I've found smaller local banks to be much easier to deal with regards to these loans. Local banks are more connected to RE in their area and understand values better. They also often have better appraiser which is the key to this approach. I'll give you a brief example of how this works. Depending on your PFS and financial background will determine the banks comfortably in your LTV. I started getting 70-75% but now I get 80%.

So here is the approach. I'll go to my banker with deal in hand ( I'll use round numbers for this example so its more clear)

I have a contract to purchase a house at $50,000. I tell my banker I want to put 30k into the property and once I do the comps show its worth 100k. I'll give the banker a detailed list of my rehab. They order a future value appraisal based on that rehab. This is why going to local bank makes all the difference. They have local appraisers. I always meet the appraisers and tell them my plan and show them comps of 100k. If it appraises at 100k the bank will lend me 80k. I'm in the house with zero down. I've done this loan probably 500 times throughout my career ( I use to flip a lot) . It's the best way imo of using leverage and not bringing in partners who bring nothing to the table except down monies. Let me know if you have any other questions. Happy to help