All Forum Posts by: Chris Jensen

@Nicole Walley, I started down my own REI path several years ago by purchasing a couple single family rental homes. I definitely feel that having purchased and sold 2-3 primary residence homes prior to this was very helpful for me. Gave me practical experience finding deals (and the tools & techniques involved), working with realtors, lawyers and banks, appraisals, inspections, insurance, property taxes, utilities, closings, HUD statements, etc.

Owning a home gave me more practical experience in basic to moderate home repair, dealing with contractors for more complicated issues, capital improvements, insurance claims, "neighbor relations", and many more important aspects involved with owning property.

But in addition to buying and owning my own home, I'll say what was equally important to giving me confidence to get started was having a few friends who were already doing what I wanted to do.  That was HUGE.  Gave me the opportunity to see what success looked like, to learn from their successes and failures, to have in-person resources I could go to when questions or issues came up.

So for me, having experience buying/owning a home combined with having local friends who can help are the two invaluable tools for what success I've experienced thus far.

Hope that helps.  Best of luck to you!

Chris

@Michael Newman ideally your W-2 job would serve dual purposes, both focused on your passion... 1) build capital and establish credit worthiness with which to pursue your passion, and 2) give you experience in a career you're passionate about. Going into a Finance-related field certainly fits both those. FYI, I went into Accounting and as I've ventured down the REI path that financial & business background has been invaluable. Your other stated alternative is Property Management, but while it may satisfy the 2nd purpose I highly doubt there's enough money to satisfy the 1st. Being a little biased :) I'd recommend continuing with Accounting & Finance. Maybe a finance-related position with a company in the real estate space like a construction company or a bank / mortgage company. Just a couple quick thoughts. Best of luck to you!

Chris

@Benjamin Small I'd recommend to keep checking with small, local banks and credit unions, which tend to be much more flexible with real estate investors.  The local banks in my town will most certainly provide a secured loan against the equity in an investment property (aka heloc), providing the equity level meets their criteria.  So I'm not sure why you're being told no.

Cash-out refi is certainly an option (I did that on one of my rentals last year), but you lock yourself into current rates for 30 years or until you refi again or sell.  And there are refi fees.  So I'd recommend to keep looking around.

Best of luck to you!

Chris

@Parker Russell welcome to BP, and good for you for being ready to get started down the REI path! I wouldn't jump immediately into the HML pool. They're certainly a good option for those who don't have many traditional financing or private money options. Check around with some local banks. If you can connect with some local real estate investors, see who they're using. Hopefully someone on BP from your area will have recommendations as well. Banks that cater to real estate investors will have very reasonable rates and flexible terms that, IMO, make them preferable to hard money. Smaller, local banks and credit unions tend to be the most flexible because they know the market and are connected with all the local real estate agents and title companies. Just my two cents. Best of luck to you!

Chris

@Matt Tallent I use their premium background check, which includes full credit check and personally calling prior employers and landlords, in addition to nationwide crime and eviction search and idendity verification. They’re very thorough. I think it’s $45 per adult, which I then charge as the application fee. If you end up using them, PM me and I can give you some advice on how to structure the credit check to make the results most useful in your screening decision.

@Shane Craig Here’s how I see things. You’re definitely getting a great deal on the owner financing, though it would be good to know your options for future refinancing. No money down certainly is appealing, but it just means you have no equity in the place and you can’t rely on appreciation to build equity for you. So there’s no cushion if something goes wrong. You’re paying full market price, so there’s no easy way to force equity through improvements (BRRRR). The good thing is, being a commercial property, value is driven by financial performance of the property. So you do have value-adding options based on the spread between the cost of repairs/updates and the amount of rent increases you’re able to extract. But that assumes your rents are already below market. As for cash flow, such low cash flow doesn’t allow you to adequately save for future repairs while also making a healthy profit. The whole thing feels so tight, I get nervous for you. Anyway, just some thoughts to consider. Best of luck to you! - Chris

@Christopher Boyle here's my take.  If your analysis is sound and includes educated estimates that you're comfortable with, but the results are just not supportive, move on.  Let someone else chase that dog.  Other opportunities do exist.  There's some wiggle room, but don't overly force the numbers to accommodate the selling price, and don't overly force the selling price to fit the numbers.  If they don't align both ways, best to let it go.  Best of luck to you!

Chris

@Kyle Hartzell, welcome to BP.  Always nice to have a fellow Iowan join the community.  I started a flipping business about a year ago and would be willing to share some of my experiences and thoughts on getting started.  PM me if interested.  Otherwise, welcome again and best of luck to you!

@Katrina Carter, my wife and I live in a military area (Rock Island Arsenal) and have two rental homes.  2/3 of our renters have been military, and they've been great tenants.  Respectful, responsible, professional, etc.  And like @Account Closed said, they're respected and appreciated here.

The rental market here is strong, so that combined with great military tenants, we've done very well.  We purchased the kind of homes, in the kind of neighborhoods and school district, that professional military families want to live in.  And we price our rentals such that mainly higher-ranked military personnel are interested.  We're on the base's off-base housing list, not sure how much that's helped, but nice to know we're officially associated with the base.

Anyway, real estate investing in a military area has been great for us.  Hope that helps.  Best of luck to you!

Chris

@Matt Tallent I use RentPrep exclusively. Their screening and background check service is excellent... fast & efficient. They have a lot of landlord resources (templates and forms), along with a very helpful blog and podcast. But as has been mentioned, there a lot of great services out there. I’m just loyal to RentPrep because they were so helpful in my getting started as a landlord. Best of luck to you! - Chris