All Forum Posts by: Chris Winslow

Here is a great "toolbox" for creative financing strategies, written by @Brandon Turner. it helped me to get a grasp of what options are out there and is definitely a good way to learn the basics on creative (especially low/no money down) financing strategies. 

https://www.biggerpockets.com/store/no-money-down-audiobook

Hey @Cole Britting yes it is possible to do that! However, I bet it will not be all that easy with most lenders. I am planning on doing this for my first purchase, currently under contract with FHA financing and we are planning on refinancing in 6 months to the Home Possible program with a conventional loan.

I am working with @Zack Karp who will be able to explain it much better than I can. Here is the link to his page since I was not able to @him here.

https://www.biggerpockets.com/users/zkarp

If you are carrying a lot of high-interest debt, it would be a good idea to pay that down first in my opinion. If you have only lower interest debt (less than ~5%), I would focus more on saving and investing but it will depend on what you are comfortable with.

Definitely a different situation with the current state of the world but normally it is possible to get loans with a credit score like that but they will likely be more expensive and more difficult. If you focus on making moves to improve your credit it will improve it'll just take a while.

If you are looking to learn about real estate specifically I think BP is great, articles, forums, podcasts, other investors, etc. 

If you are looking for other books then agreed RDPD is awesome and probably the best starting point, awesome that you have read that!

In addition to that, 3 that I really liked are:

- 4 hour workweek

- Set for Life by @Scott Trench

- Never split the difference- book on negotiation

Hey @Delvon A Byrd! I would say that this is a very open-ended question and you will get a large range of answers. A “good” down payment really depends on what your personal strategy and plans are, along with how much cash you have available.

Many people try to get the lowest down payment as possible so they can leverage as much money as possible to get the highest cash on cash return they can. The less money you have invested in a deal the higher your return and the more options you have with the leftover money. However, it really comes down to how much you are personally comfortable with carrying that debt.

A few common answers for residential property that you might see are: 0%, 3.5%, 5%, 10%, 15%, 20%, 25%. Note that the loans where you put down less than 20% do have certain criteria, some of which are here:

- 0% USDA or VA loans- USDA for rural areas mainly, worth looking into, VA loans are for military

- 3.5% FHA- Must be your primary residence, The property must be in good condition

- 5% Conventional with Home Possible- Must be your primary residence

In the end….it depends, lots of great options, ideas, and strategies to look into here on BP!

@Patrick Menefee Great idea for a forum discussion topic!

So far with everything going on, I am pretty happy with a few things:

- I was able to look through all the properties on the MLS that are in my search criteria in my local area to get a better idea of what a deal might look like here

- I have been able to see properties and it seems like it is getting less competitive around here. I haven't gotten a property yet but I think the situation will help me a lot in the end

- I was able to finish putting together an ecommerce store/side hustle with my friend, should be up and running next week

- And I have been able to buy stocks for about 30% less than they were a month ago and I plan on buying more as we ride this out

Wow, the fact that you are 16 and already starting to think about this stuff is awesome. If you keep your focus on it, you will be so far ahead of so many other people that are your age. And the fact that you know it may not always be easy or fast makes it seem like you are in it for the long haul (very smart). Keep taking daily consistent action that will get you to where you eventually want to go.

There are some great and affordable places in Michigan to invest so you have a great location to start with. 

- Get some background knowledge on real estate topics and strategies. Learn what successful people are doing and how they are doing it. Definitely read this too as a start: https://www.biggerpockets.com/guides/ultimate-real-estate-investing-guide/introduction

- And the other BiggerPockets books are great resources too along with all of the site content and forums which are free

- Narrow down your focus on where you want to start and what you want to learn, probably best to pick one thing at a time to really dive into and get good at versus trying to learn every strategy in-depth at the same time. Really focus on learning everything you can about that one thing. 

- Make connections- investors, lenders, realtors, contractors, wholesalers, etc. You will hear people say “Rockstars know rockstars” and it is very true. Meetups or other real estate events are a good place to meet people as well as on BiggerPockets.

- Look for a mentor- if you show that you are legitimately interested, full of energy, and willing to get in and do the work, lots of people will be happy to let you learn from them. Don’t directly ask people to “be your mentor,” but ask to help them out where you can and try to learn from them however they will let you. 

- Analyze deals so you know how to actually spot a good deal when you see one

Bonus: Start learning general principles about ways people achieve financial freedom- basically spend as little as possible, make as much as possible, and invest whatever you can.

- Also highly recommend that you read “Set for Life” by @Scott Trench 

Here is a link to a BP article by @Paul Moore that explains multifamily valuation much better than I can, hope this is helpful for you:

https://www.biggerpockets.com/blog/cap-rate-real-estate

Personally I would be a bit nervous to go much below the 1% rule but it REALLY depends on your area. The 1% rule is not exactly a "rule," more like a general guideline for a quick analysis. This rule will not always tell you if you have a winner or not, what really matters is the income compared to the expenses of the property. Even if you use the 1% rule as a guideline for screening it's important to do an in-depth analysis before making any major decisions. 

If these are properties that you already own and you have good tenants in there and the cashflow where you want it to be then I wouldn't worry about the 1% rule.

Also If you are talking large multifamily (5+ units) then most people will use local cap rates to determine value along with the expenses and income to determine the value.

Based on your current FHA situation, I don't think these will help (they would also have to be a primary residence) but here are 2 programs that could allow 0% down payment:

There are VA loans if you are associated with the military:

https://www.valoans.com/

Or USDA Loans if there is a qualified rural area nearby:

https://www.usdaloans.com/program/eligibility/

Or if you can find an owner with some equity built up then maybe you could work out a seller financing deal. With the owner acting as the bank, you may have more freedom to negotiate your down payment.