All Forum Posts by: Account Closed

"Back in the day" when taking a sales class in college, we were taught to write down every objection to our product, and then a response for that objection.  Lets do this for real estate objections/fears and how to overcome them.  

For example

Objection: I am too busy in my job. 

Answer: The most important thing you can do for your income is to create additional streams.  If you have one income stream, a job, and you loose that job you have lost 100% of your income.  If you have a job and just one income producing rental property then you have a safety net.  With each additional rental property you become less reliant on that job. 

Or.....

Objection: I am afraid that I will loose money.

Answer: Nobody wants to loose money but if you invest in a 100K college education you wouldn't consider that money lost.  Every deal that I have lost money on I have considered that an education expense and I have learned enough to make 10x the amount of the loss in my next investment.  

So everyone, throw out some excuses you have had or throw our some answers to other objections.  Lets all help each other get over any objections we or other people are putting up.

Hey David, 

You might ask for a copy of the sellers K1 and or schedule E for this property. I think it is super important to base any ROI calculations on actual numbers not projections. If you can't get them then I would almost suggest you need to be extra careful on your budget projections. You would also want to reserve for larger expenses called capital improvements. This deal sounds a little lean to me.

Thumbs up!

I would say you need at least a 2 point spread on the cost of capital and the cap rate.  If your cost of capital is6 then you need an 8 cap. You can't make a 5 cap deal work with a 6% mortgage rate.  Also make sure you believe the expenses on the cap rate.  A lot of sellers tweak the numbers via a proforma to make the cap look better. 

here is a link to the flyer

https://drive.google.com/open?id=0Bw8mOLnYX43HaTVZSGdSTjhrX0E

I actually own three houses in Duluth and know Duluth very well.   A few years ago Duluth tried to create a 300 foot rule meaning that one rental license could not be within 300 feet of another rental license unless that was already the situation then that house would be grandfathered in. They gave a date that all houses need to have rental license in by in order to be grandfathered in so many  homeowners who didn't want to rent their house out still went out and got a rental license. It's my understanding now if you buy a house that doesn't have a rental license you are able to " bypass this rule "by paying the fee of $2500 or maybe $3000.   In my opinion the city is somewhat difficult to work with. They seem like they come up with a new law against the landlords every few years. I may be interested in selling my three college rentals to you. Feel free to PM me if you want to discuss it further. 

congrats on your first deal Matthew, I grew with Andrew I'm not a big fan of self-directed Aire's but partially because I've never done one. I invest in stocks in my IRA which allows me to have somewhat of a balanced portfolio. To raise money from the private sector I would think you need to bring the deal to some individuals that have money. The deal would have to be attractive enough for them to invest in you. The Minnesota multi housing association has a meeting on November 10 which might be a good thing to bring to that group and discuss it. I'll be at that meeting if you're interested I'd be happy to look at the deal for you in person. To find out about the meeting go to bigger pockets/events. It's under MMHA meeting in Bloomington Minnesota.

Hello, 

I am looking to increase attendance at our next MMHA - Minnesota Multi Housing meeting which is November 10th.  Here is a link to the event. Please let me know if you can attend.  It will be a world class event. 

https://www.biggerpockets.com/forums/521/topics/370638-mmha---how-one-owner-grew-his-business-while-having-a-day-job

Tracy,

I have a contact in Minneapolis looking for this.  Can you send me further details?

Very cool.  Looking forward to meeting you.