All Forum Posts by: Brian Alfaro

@Beau B. Bray Thanks for sharing! I am also looking for my first deal, and I can give you some advice when working with Hard Money lenders as that is who I have been getting term sheets from on houses I’ve made offers on. Hard Money is hard because it is EXPENSIVE. I’ve found you need $20-25k in cash reserves for every $100k or so you borrow. For example, if the house costs $50k and needs $45k in rehab, expect to need to have $25k sitting in an account. These funds are for: Upfront Points - HM lenders charge 2-4 points depending on the lender that must be paid up front. That means if you borrow $100k you have to pay $2-4K in points. Down Payment (if necessary) - this is depending on the deal and your credit worthiness. Six Months of Interest Only Reserves - if your monthly payment on the loan is $900 then you need $5400. 1/2 to 1/3 of Rehab Bridget to start the project - YOU have to pay the contractor out of pocket to get started. You get this money back on your final draw from the lender. So if you’re rehab is $45k they’ll need between $15k and $22.5k (depending on lender) in your account. Using the small numbers you’ll see- $2k (points) + $5,400 (reserves for interest) + $15k (rehab kick start) = $22,400. This doesn’t include any other “fees” the lender will surely have and any potential closing costs that may be associated with the deal. Just a friendly tip! Hard Money is great for getting started, but the deal has to be JUST RIGHT. It can’t sort of be a deal if you’re tight on cash. In my market, I personally wouldn’t recommend using HM unless there’s a lot of room in the deal and it’s less than $100k all in unless you have over $30k in cash to be looking at the bigger deals and rehabs. If the deal is solid you’ll get all your money back and be all in for “no money” and be able to BRRRR the house, but that’ll take 6-12 months of your cash sitting in the property before you get it back for seasoning on a refi.

@Skylar Dejesus Congrats! As a beginning REI myself, reading these stories is motivational! Thanks for inspiring me and others to get started. Looking forward to hearing how your portfolio grows.

Great support here! I agree with everyone’s messages about diet, exercise, sleep, etc. The old saying of you are what you eat is true. If you eat junk, you’ll feel like junk. Plan your meals out in advance and try to avoid foods for lunch that will cause you to loose energy or get sleepy. Good food will help recharge your body for lunch and give you the energy you need. Bad food (like fast food) will do the exact opposite. Sleeping at a consistent time and getting whatever your body has told you is a good amount of sleep is also key. You need to find out what that number is - 6-7 hours is likely the range. Go to sleep at a consistent time and get the same amount of sleep daily will help your energy levels throughout the day. Finally, exercise is extremely important. I try to start most my mornings with a 6am walk or 2-3 mile run. After that I meditate and get mentally prepared for the day. A good breakfast is also important (cereal or sugary snacks are not good breakfast). If you don’t eat a good breakfast you’re more likely to eat junk snacks in between lunch and breakfast or overeat for lunch. Just my two cents! Hope it helps.

Just wanted to say this thread is FANTASTIC and very helpful. I am currently focused on building my capital through SFH deals. I hope to do my first property later this year/early 2019. However, I'm always thinking a few steps ahead, and getting into MF is my goal in the next 3-5 years. The information and reading material referenced in this thread will surely be helpful in my journey.

I am looking for a good broker as well, so this was very informational! Thank you everyone!

Welcome to BP!

Would love to get some more specific info on recommended companies specifically as well! There are a lot of PM companies out there... I'd like to hear who does a great job for small MF housing and larger apartments as well.

@John Janasiewicz You're in the right place! Welcome to BP! 

I've only been on here for a few months, but I've dived really hard into educating myself on SFH REI and am getting just as deep into Multi-Family/Commercial currently. The BP Community & Podcasts have been great! I am at a point where I am mentally ready to invest and feel like the best education left for me to get is actual experience. I am being patient and playing the waiting game as I get close to my target capital goal to begin investing. In short, my long-term plan is to begin investing in SFH (much lower barriers to entry) or small MFH (Duplex, TriPlex, Etc) to raise capital and build my resume with the goal in mind of getting into larger MFH/Commercial properties as quickly as I can.

I'll send you a message so we can connect! 

Thanks for sharing, @Jhoana Olarte

Great info, @Sharon Tzib