All Forum Posts by: Chris Jackson

Johnny Wudwanee make sure you are going in with eyes wide open. Figure out if you can at least cover your expenses and mtg with a full year rental. In my area, I live in a second home community by the water, people began buying up homes that make negative sense from a full year rental perspective. But were making bank in the short term rental space. Daily, weekend rentals. The town a few months ago passed an ordinance that short term rental means 14 day minimum stay. Booooooom. The penalties are quite steep as well. Unless you purchased one of the super premium higher end homes, you are.... well, you know. PS (I'm an RE investor and I'm glad they passed the ordinance. I worked really really really hard to be able to buy the home I live in with my family. I designed my life this way. I chose the neighborhood I want to live on. I didn't choose to live next to a hotel. Many of the ABBs homes have turned into party houses. I'm 40 I'm not a tool and I like to get my party on but I paid a premium for quiet house I chose to buy. If my neighbor became an ABB pro I would be unpleased)

This is the issue right here:

In a residential area there is almost no way that a drop of that magnitude would occur by going from farm area ---> absentee owner = 1200 to SFR designation to 143. Thats the issue right there.

Is this what you chose?

If yes can you connect with me and give me your criteria.  I'll take a look.  that's a bit odd.

Remember 

***** odd is good

***** difficult is good

***** when we crack this code for you , you are probably around 1 of maybe 5 people in your farm area.

@Gino Barbaro  I am 40 now.  I have been a real estate investor in my mind since I was 22 years old.  Carleton sheets was my first education purchase.  I never put anything into practice. Like you, like many I spent alot more than I care to admit on 'education'.

7 years ago was year I am making this work or I am never allowed to think about REI again.

Struggle, i like that you used that word.  Lots of struggle.  Nothing this good, this rewarding in life is had and appreciated without struggle.  

@Gino Barbaro  Great story. A realistic portrayal of the path. I say realistic because we are flooded with stories, advertisement, facebook posts everyday that are not the true portrayal of how it truly goes down on how you actually get 'there'.

- Hiring a mentor
- partnering
- true hustle

Were the true turning points for me too.  That and focusing on apt buildings ;) 

It does not mean you need to expand your area.  What you are experiencing is data mismatching.  I in a former life :) was database administrator.  One of your filtering criteria (seems like the mtg defaults) is not matching in the right way the county has given Listsource its data or the county does not have that data.

Many times you will see in some counties that if you tried to even add the bed count that your list count would reduce.  This means the county does not have that and listsource is respecting the fact that you want to know that filter so it only serves back data that does have any data in that field.

In your case it appears you are get some data back on some really good filter criteria (bed count etc).  

I agree with Uriah D.  Dont worry about mtg defaults, thats going to be headache.  Think about what kinds of sellers have high equity.

- use list source to search on MTG amts if that gives you enough data return
- what kinds of sellers would have high equity?  (no mtgs  ;) )
- what kinds of sellers would have high equity even if have a mtg?  (sellers that bought at least 10 years ago)
- what kinds of sellers would have high equity even if they have a high mtg (sellers that bought in 2009-2011  the martket has gone up)

I have a few other tricks up my sleeve if you want to private message me.

Play around with filters above, then combine them and trial and error with another goodie (absentee owners)

One piece of advice I want to give and anybody that reads this, most people stop right where you are hitting roadblocks with a site like listsource.  I cant tell you how many hours I have stared at a county trying to figure out why I am only getting back 30 results until suddenly I figure out what the county had used as a data point and then bam 400 results. (and when that happens I know I am the only guy at the party before the party has started lol )

I got my start 7 years ago on a 5 unit I bought for 40k and put in another 40k.  My second deal was for 150k an 8 unit.

Yes they were alot of work in the beginning.  But I learned the multifamily ropes managing property managers with total granularity.  

In 5 years they doubled in value all the while throwing off extremely healthy cashflow.  There were some tough years of mistakes by me but I learned and profited!

If you are in a position to put down a 100k plus closing costs, plus planned capx, plus reserves which in reality will probably get ya to 150k liquid down needed in a hurry sure, find a 20 unit for 25k per door.  

One cant use blanket statements in real estate though.  We just picked up a 12 unit for 320k.  30% under market value, 30% under market rent.  The projected returns are very enticing.  Yes 'smaller' buildings require more hands on management of your PMs and finding professional PMs in the smaller unit space is challenging but thats where opportunity lies, in problems.  Solve problems other don't want to solve, buy correctly and win.

From a blanket statement perspective I hope the competition ignore the under 500k space ;) 

Hi Justin,

I see that this post is 5 months old.  How was your search for a partner?  Keep at it.  

Before you get your first deal there are many close calls that can be very frustrating and will drive you to quit. I know as I started and stopped my REI career many times before I became sick of the stops and went for it no matter what. I was in the same situation as you. I didn't have enough $$ to really get the down payment.

To get my first deal I needed to convince some people around me, family and friends to believe in me.  In order to do that I need to be completely confident in the numbers, area, and the plan.  They were taking a chance on me.  Understand that, when you have not done your first deal people are taking a chance on you.

They took and chance and it paid off for them and me.

Don't give up, never give up.  Ever.

Not sure what a success fee entails.  

I cash out refi'd 2 buildings in upstate New York recently.  Under 15 units total.

I went with a federal credit union in the area.  Approx 350k loan.

- 5% fixed for 10 years
- 20 yr am
- 80% LTV (the new value which I powered to double over the last 5 years - shameless self promo there ;) )
- my fees were similar to more if you factor in phase 1s (questionnaire), appraisals, legal fees mine and the bank's)
- recourse/personal guarantee

Although that may seem high to some, in the small loan world , yes 'small' loan is under $1mm you get into a bit higher rates and shorter amorts.  The benefit though is that with FCUs (Federal Credit Unions) there are no prepayment penalties usually.  I received the very large smile inducing check in February and can sell the building today if want with no penalties.  

Also a benefit to using local banks/FCUs is that when you perform on your loan and the bank sees what your intentions are and how you run your buildings they can, if you allow it, get to know you.  You can actually get on short lists for opportunities.  

Anyway that was a long winded way of saying those rates seem in line with small loan multifam.

The biggest thing to consider is:  do the numbers work for your deal?  That's where the rubber meets the road on financing.  

Hope that helps.  

Multifamily is the way to go. My journey began by hiring a local coach. Was skeptical about spending more money at the time on another 'course'. But hiring a local mentor that I met at a REIA actually changed my life 6 years ago.

As far as books go, I began my journey with a David Lindahl book actually, Multifamily millions.  Once I read that coupled with hiring a local mentor really got off the bench and got my first deal. Then the next and so on.

Good luck.  One things that is said all the time but its kinda glazing over these days in a digital age, real estate success is about people.  That went the same with hiring a 'local' mentor that I could see every month at meetings and feel that belief and trust from another human being I could actually talk to face to face.

Good luck Miguel.