All Forum Posts by: Chris Coleman

@Omar Diaz here are 5 items to review when looking at potential real estate markets:

Population Growth – We want a market in which the population growth is steady and ideally increasing. Definitely not decreasing! Basically, are people moving into this area or away from it?

Employment Growth – Look at the employment trend in the area. Has unemployment been on the rise or has it been decreasing over the last 5 years? In other words, is there solid job growth? Positive trends in employment are a good sign of a growth market.

Diversity in Industry – What are the major economic industries in the city? Who are the major businesses, corporations and employers? Ideally, we want to see a variety of major industries and employers within the market, along with business moving into the area, as this is a positive sign that job creation and growth will likely continue. We generally want to stay away from areas that are dominated by only one industry or only a few major employers.

Rental Trends – What have the last 3-5 years experienced in terms of rental trends in the city? Are rental vacancies increasing or decreasing? Is the city experiencing a growth in rentals, or is it slowing down? Of course, for investing in rental real estate, we want markets with lower vacancies and ongoing demand.

Landlord Friendly - With so many states enacting various types of rent control laws and such, we ideally want to target areas with lower regulatory hurdles for property owners and landlords.

Hope it helps.

@Robert Shedden events and meetings like that can definitely be great places to network.  One benefit, of course, is simply building relationships with other like-minded entrepreneurial professionals. In my experience, I have found that you never know where an great opportunity will come from next...often the unexpected relationships.  So building relationships like this is always a good business (and personal) practice.

From a real estate investor perspective, it helps if you know your goals for the meeting. Are you looking to connect with other people who are also real estate investors and therefore maybe could become a partner on future deals?  Are you looking to connect with brokers, lenders, property managers, insurance agents, contractors, or others who could become part of your investing team?  Maybe all the above?  Either way, set your goals and approach the meeting with that in mind.

@Garrett Lutz start off by asking four questions...

First, is he trustworthy?  Can you trust him to be committed to you and your success, and honor his end of the deal?

Second, is he competent?  Is he knowledgeable and experienced in the business?  Has he been where you want to go and done what you want to do?  Does he have the track record and relationships to evidence his success? 

Third, is he capable of teaching/mentoring?  That is, he may be awesome at running, growing, and succeeding in his own business, but can he successfully teach and mentor someone else (i.e., you) to do the same?

Four, are you committed?  Your success will not happen overnight and it will not be easy.  Are you committed to staying the course and doing what it takes to steadily learn, grow, and build your business?

If you can confidently answer "yes" to these four questions, then 12% is a great deal for you.  Just make sure that you both agree, and put it in writing, when does that 12% stop.  Is he just teaching you the business for a certain amount of time and money, or are you becoming business partners for the duration?  Therefore, you need to know will he continue to get 12% of your profits forever, or is it just for the first certain number of deals, up to a specific amount of money, for a specific length of time, whatever?  Spell it out and be specific.

Whatever you decide, I hope for great success for you.

@Hayden Hirzel putting your equity to work in a new investment is generally a great strategy as long as the numbers work.  Just a few things to consider when doing a cash-out refi:

1. Do not over-leverage. That is, do not get a new refinanced mortgage for more than what the property is worth or would be worth if the market were to drop by 15%-20%.

2. Make sure that your existing property will still safely cash flow after the new mortgage or loan payments kick in. The new refinanced monthly payment are more than likely going to increase. And that’s fine, as long as it does not increase so much that it erodes your monthly cash flow to an unhealthy level where you’re upside down or too close to it.

@Charrand Jones a few options to consider. First, if you are totally set on using the LLC to purchase the property, then you should talk to small local banks in your area and/or portfolio lenders. Yes, they do like to see that you have experience as a real estate investor. However, they also like to see a good deal and lend on the metrics of the property/investment itself. So put together a nice, very informative, written plan that describes the property, the deal, the financing needed, the returns, how you will manage it, your team, etc, and take this to them and ask to discuss their lending options.

If, on the other hand, you are flexible on not using the LLC at first, then you can probably more easily get a conventional loan to purchase the property directly in your own name. This is assuming the property is 4 units or less. In this case, the loan will be based on your credit score and Debt-to-Income ratio. You may need to do this with the first few properties in order to get experience, and then go the LLC route.

@Josh Gosnell it really comes down to how active or passive you want to be in the investment.  If you're looking at sites like homeunion, then you're probably looking to be pretty passive.  In that case, two very popular options for investing remotely and passively are through Multifamily syndications and Turnkey rentals.  You can find plenty of information on both of these strategies by searching the terms here on BiggerPockets.  I have been very successful in both.

Multifamily syndications are the most passive, in that you invest your money with a Sponsor/Operator, and they manage every aspect of the investment from purchase to property management to asset management. Turnkey rentals are also passive, but require a little more participation by you as the investor.  This is because while you do have a property manager who is the landlord for rental, you still play a role in managing the overall bookkeeping, finances, taxes, insurance, and other administrative asset management tasks as the property owner.

@Ruben Lopez before making any purchase decisions, I recommend you get more specific and accurate on the numbers. You need to get as close as possible in estimating your monthly (and annual) cash flow. You can't do that with numbers like "I figure the mortgage would be 3200 ish" or "600-700 in operating expense". Being successful in real estate investing is largely about the numbers.  Learn more details about these properties and get as close to accurate numbers as possible on both the Income and Expenses.

Also, what condition are the properties in?  Will either of them require renovations within the next 3 years?  If so, this could seriously eat into your profits and even cause you to be upside down.  Do your due diligence.

@Amanda Bozzi I can highly recommend Tiffany Izenour of Freedom Property Management.  

www.freedompm.com

@Brian Reed and @Albertinny Colin

@Chris Salerno is who you want to connect with when it comes to Charlotte, NC.

@Cole Farrell for an 8 unit property, you will need a commercial loan with a $200K-$250K down payment.  Have you considered partnering with other investors for the down payment?

You could also approach the Seller about Seller-financing.  Offer what you do have for the down payment and see if they will be willing to seller-finance the balance for a specific term until you can refinance the property and pay them off.