All Forum Posts by: Chris Bluem

Any insights would be appreciated, thanks!

Hi All,

I am looking for some advice regarding my real estate strategy going forward and specifically the sequence of the events to make it happen. Below is a little background.

I am looking to downsize my current home (FHA) and purchase two properties, one multifamily (My FHA) and another smaller property (apt/townhouse) with my partners FHA or 20% equity. A family member is also a real estate agent and would provide me with the 3% commission on the purchase of the new properties, minimizing cash outflow on the new properties.

So my high-level thoughts are, I could downsize and buy two properties, which would reduce my monthly living expense by 1) a smaller primary note and 2) income from the MF offsetting a portion of the primary note, and at the same time I would be able to pull the equity I have built up in my current home, plush my current cash on hand, to further invest after the dust settles. Also, note that I am pretty young, have a god/stable income from my primary job and great credit.

So I have a few questions on how I should think about executing this from a timeline perspective and also ask what you would do in this situation?

To purchase the MF (FHA) would I need to sell my FHA home prior, or can I purchase at the same time as the sale or even before?

Would I need to buy the second property (apt/townhouse) with 20% or FHA first, then sell my current house, and then purchase the MF FHA?

Should I try to BRRRR this MF property and refinance it with my FHA, or better to purchase turnkey? And I guess the same question goes for the apt as well?

I have the idea down, but just a little caught up on the sequence of events, and also throwing the BRRRR in there adds more complexity, given that would take more time and also would be my first project of that scale, but could save cash outflow.

Any advice and input would be greatly appreciated, thanks in advance!

Thanks, Chris

Thanks for the feedback. I would be ok with smaller amounts down (5%) or situations where you had to put money down and then could get it back out. But looking to understand if I missed any options outlined and if the ones I listed were possible as well.

Thanks for taking the time to read and respond. I am starting to look at a few rental properties (SFH & Multifamily) and beginning to run the numbers. So I just wanted to make sure I understand some of the strategies to finance the deals and also if I am missing any, and also have the opportunity just to see what everyone has to say as I am trying to learn as much as possible. My goal, given limited funds would be to finance with zero equity down. I have a good paying job and good credit.

BRRR Strategy - so the idea behind this (using simple numbers), is that for a property with an ARV of $100K, I would need to get it for ~70% minus repair cost (assume $10K) so lets say $60k. I purchase with cash/hard money/credit lines, put the $10K into the property, rent it for ~6mo, and then refi for 80% of the ARV or $80k. This would yield me the property and $10K cash to repeat

In simple terms is that right? and on the multi family side when refinancing, does the bank look at cap rates or do they loan more like SFHs? Also, i know this ranges, but on average what are the types of properties that are best to target? Ones that need a lot of work, or ones that need slight upgrades? I assume the more work the more discount when buying but also more risk, so just wondering what might work good for someone starting?

Other scenarios - What about properties that are in decent shape or even turnkey and cashflowing with a good cap rate or being sold below comps? What are some ways to finance these deals with no cash (or being able to get the cash back out)?

I could get a residential mtg and have the current owner take 20% as a second note. Could I pay 20% higher price than listed, and get a credit that is used as my equity, and essentially finance 100%? I could purchase the property, lets say 25% under market with hard money, wait 6mo and then just refinance at 80%?

Random Questions - So when you purchase a house lets say with hard money, and it is rented and cashflowing, you have to wait (typically) 6mo until you can refi that property? For hard money loans, most I have seen advertised cover 80% of the purchase price, but is it common to get (one you have established a relationship) 100% financed assuming you get the property 20% under market? To get these types of deals what is the most common method to find them (say when getting started), is it through wholesalers, MLS, Zillow tracking down current MF landlords, investors looking to exit their properties?

Any other insights, strategies, opinions, or words of advice would be greatly appreciated. Thank you!

@Brandon Johnson this was a great read for me and very appreciated. I am in a similar boat as you were two years ago and reading your story is very inspiring. If you dont mind, I may PM you with a few questions as I look to get started. Thanks again!

@Jerryll Noorden thanks for the feedback, I am taking notes. And on the paid programs, I am in the same boat, its more that I just want help to actually get started vs reading on the sidelines. So it is more to throw me into the fire.

@Kuba F. Thanks for your feedback as well. You mentioned driving for dollars. I have done that a bit for fun. Once I stop a place and get the address, do I follow that up with a mailing? Leave a note in their box? Track down their number and call?.... I have not joined any groups yet, but have researched two big ones in my area, now I just have to go. And thanks for the links, I am looking forward to the reads, and will follow up with you on any questions after! Regarding offer prices, I am looking at what the value could be after renovation, subtracting what I think a full rehab would cost (given the location), and subtracting margin from there. These are on the MLS so I will try to see them to get a better idea of rehab, but assuming a full rehab.

@Jose Flores - Thank you so much for that response, that in and and of itself was very helpful and I have added many of the things you listed to my notes for taking action. And I 100% agree with you about building systems. I started with scripts because if I can find properties on the MLS, have the right contracts with appropriate clauses, and have the scripts to help me pitch the story... Then I can TAKE ACTION. I am an analyst with a heavy finance background, so I dont want to get overwhelmed building a plan for a year with all the tools and have zero execution. This way, I can get moving and get a feel for things, and if I get zero contracts (at first) that is OK with me! But, agree and plan on building the whole infrastructure/systems/toolbox, and I took note on what you listed. And I appreciate the mentor feedback as well, my thoughts were that I would rather pay for a program if I can get up and running in 6months vs learning over the next year. That would be worth it to me, so it was more around a paid program that has shown to work, but that seems difficult to find. But I agree with your mentor comments, they were very insightful and spot on, and I am excited to build those relationships over time! Lastly, number 5 always wins!

@Chrissy Parsons - Thank you, I agree with you and it seems so does @Jose Flores. My only thought was that I want to learn what I am doing before throwing money at the wall. So it was more to work deals from the MLS so I can learn the process, learn the phone, learn the contract, etc... Learn learn learn and then scale and invest.

All others - I appreciate your feedback as well. I plan on getting licensed in the near future.

Hey All,

As someone looking to get into wholesaling I have a some questions around a few topics in which I was hoping to get feedback, input and advice on.

To be clear, I am just starting, I have done research but I have not sent my first contract out, although I have found a few listings which I want to pursue with offers. My goal is to send out 3 offers by sunday, if not anything at least to get the ball rolling and start getting on the phone and following up and talking to people on the subject. I am located in South Florida.

Below are the topics:

Contracts: I have two blank contracts from local title companies, and I am currently just reviewing them to become very familiar. Do you all, on a normal basis, list any type of special contingencies/clauses to add extra protection in order to get out of the contract within the inspection period? Is there anything specific I need to really pay attention to outside of the inspection period on the contract?

Scripts: I have seen a few good BP post on WS calling scripts; however, it seemed that most of the posts were dated and didnt have the scripts any longer. Does anyone have scripts that they would not mind sharing to help me get familiar with how I should frame my services and the call?

MLS: I am curious as to what percent of your deals you get off the MLS. Before spending money on marketing, I want to learn the business better finding and working on deals from the MLS (so they are free), so that I can work out the kinks there and then add in direct mail.

Also, being new to the MLS and WS in general, it was easy to get overwhelmed with the amount of residences available, so I was curious as to what some of your strategies may be to help narrow the funnel when looking on the MLS (price point, neighborhood "grade", days listed, status changes, sqft, beds/baths).

Paid Mentor Programs: I am very interested in joining a paid mentor program, and I wanted to ask if anyone here has paid and had success in a mentor program before. I have looked at Wholesalers Inc, however they are based on direct mail and I would like to get the business down on the MLS prior to jumping into direct mail. I have reviewed the mentor section but it is a little all over the place so I wanted to ask in here to see if anyone has paid, and has had success in a paid program. (I know that I can learn everything for free in the BP forums, but for me it is worth the money for a little more hands on training, and more importantly speeding up the learning curve)

Thank you all very much for your time. My apologies for the long post; however I am very excited to hear your input.

Hello BP Community!

My name is Chris, and I'm a excited REI noob from South Florida and I'm looking forward to gaining and sharing all sorts of knowledge here on BP!

My background is in Finance, Valuation and Strategy and I have spent most of my time working in corporate, as well as one year on Wall Street... which all equates to not much real estate deal experience.

I am most interested in wholesaling, BRRRR strategy, and finding a financial way to take down some large cash producing assets/portfolios.

I am looking forward to gaining and sharing knowledge with everyone. If you have any recommendations, advice, SF networking recommendations please feel free to let me know!

Thanks!

-Chris