All Forum Posts by: Carlos A.

Private money lender would be the route I would take.

Quote from @Ethan Tomlinson:

Hello! My name is Ethan, I am a brand new college student and I have been kind of stunned by what I have heard on BP, as I have listened and read books through High School. One thing that is common amongst all the podcasts and books is that its always said the beginning is the hardest, the first deal is the hardest. I want to do an FHA loan, except for the fact that I don't have the few year span of tax documents needed to get a bank loan. I know it's possible to have a parent cosign, but is it also possible to just find off market deals? I forget the name for it but it's when the owner sells the property to you directly and they basically become the "bank". Hopefully this question makes sense. I am just itching to do something about my life with real estate so I can start changing the lives of those around me.

Thank you for any replies!

Hello Ethan!

what you are talking about is called “seller financing”. It is a great way to find deals, but I will say, it takes some work to find those deals and a trusted lawyer to draw up the contracts. Continue to do your research and learn. Real estate is a long term game. It’s better to pass on a deal then to buy a bad one. 

Quote from @Arron Paulino:

Quote from @Carlos A.:

Hello Arron! 

Your question is a little vague. “How to proceed with decent liquidity?”. Depending on how your reserves/portfolio look like, there could be numerous strategies. 1031 exchage? Cash or refi? Finding partners? A bunch of different ways. 

A large multifamily in a decent area may be mutliple Millions of dollars depending on where you look. But depending on your ability to fund something like that, you could hit your mark (5k/mo) in one deal

 I think that's what I am looking for right now. I'm thinking, hypothetically, being liquid about $100k and seeing where that can put me in terms of building up my rental portfolio and/or seeking flipping opportunities to grow my capital to get into bigger projects. What do you suggest?

With 100k you could probably find some decent properties. Personally, I dont think that alone will be enough to generate your goal (5k/mo) regardless of what you put it in. Cashflow in general is pretty difficult to come by in today’s market. 
You might be able to find some larger multifamily buildings in the midwest (just guessing here) that you can use that 100k as the downpayment? But…if it were me, I would focus on buying 1 or two nice houses in great appreciating areas…best of luck with your investing!!

Hello Arron! 

Your question is a little vague. “How to proceed with decent liquidity?”. Depending on how your reserves/portfolio look like, there could be numerous strategies. 1031 exchage? Cash or refi? Finding partners? A bunch of different ways. 

A large multifamily in a decent area may be mutliple Millions of dollars depending on where you look. But depending on your ability to fund something like that, you could hit your mark (5k/mo) in one deal

Hey Alex, hope you are doing well!

Although this might seem like a super exciting way to "get out" of your current situation, please understand that REI is a very competitive and difficult business. And this is a business. And like most businesses, people fail at it all the time. What happens if you make a mistake (which almost everyone new at this does) and you lose 50,100,200k?? 

When people are desperate, they are also the most vulernable. Dont go by what you watch on youtube or read crazy success stories online. Debt is real and bankruptcies happen all the time. 

Why not make a career change first?? It is MUCH easier to invest in real estate with a w2 job 

Hello Kamazja! Florida is tough nowadays for sure. I personally have a few properties ranging from Orlando down to North miami and can tell you that just insurance and property taxes alone are making it more and more difficult to invest here. 

I’ll say the cliche thing and advise you to invest in yourself. You’ve done a great job saving up those 10k! The best thing would be to find ways to build you skills, network and experience first and then worry about investing later. You will find that you can leverage relationships and an open mind much more effectively than that cash you have in the bank!!

Quote from @Peyton LaBarbera:

But why wouldn't an increase in the cap rate decrease the property's value?

Or are they just saying that because of rent increases then the property would act like a 6.6 cap?

I'm still I bit confused if you can't tell

Cap rate can be effected by 2 factors: NOI or Purchase Price. 

the seller is saying you can increase rents to get to a 6.6 Cap rate (in this case it would take NOI being 165k to get there) 

What you’re doing is keeping the current NOI (132k) and dividing it by a smaller Purchase Price (2M) and getting that same 6.6 Cap rate  

Something that could help clarify your goals would be defining what you consider “good cashflow”?

Additionally, if you are willing to get creative, you can definitely find cash flowing deals out there. Have you looked into seller financing? Trying a subto deal? 
What about different types of real estate? Small industrial warehouses? Mobile home parks? Etc. 

or lastly, maybe owning the debt (being a private money lender)?? Thats another way to create cashflow

Being in a similar situation, Im currently trying to find a lender who will give me a heloc on a rental property. It could be a great way to leverage the equity and scale using the BRRRR method or even just flip houses

Oos investing can be pretty simple if you get a good property manager. However, I will say from experience, the midwest will allow you to cashflow well at a significantly cheaper price point but you will see very little appreciation. If you are concerned about only cashflow, I would say thats is where you want to look, if you are interested in creating long term wealth, maybe somewhere local could be the better route