All Forum Posts by: Chris George

Most people like rented properties becasue they already have preforming tenants and there is no rehab. Trouble here is, why would any one sell a preforming property. It does happen however.

I found it much easier to buy vacant, bank owned homes and rehab them to my specs, then rent them. I like throwing a few extra things into my homes like tile through out all the living space except the bedrooms. I makes it much harder for tenants to destroy and much less carpet to replace.

The reason a HML will likly be nessecary is the property condition. To get a deep discount you need to buy a property that the average person can not finance without at least 20% down.

I would suggest finding a property in such condition that has only superficial problems. IE: No kitchen but there are no major electrical, plumbing, HVAC, foundation, or structural problems.

A HM lender will be more apt to lend you money on properties he sees as easy to fix.

So to answer in order.
Find a home in this condition.
Get a HML or HML combined with a 20% down conventional.
Rehab it to your specs.
Refi out of the HML
rent it.
move on to the next one.

One more inportant note: Be sure your projected rent is low. Check your local paper for rentals and see what the going rate it. Then undercut the market. The longer you keep your tenants the fewer rehabs you have to do.

When looking for private money you also want to have a top down cost analysis. I find it easiest to go backwards.
IE:

Projected rent is 1000 a month so your total maximum loan is roughly $130,000

$130,000 final loan (30 yer fixed at 6.5% PITI)
-
$5,850 refi cost (4.5% of reif)
$20,000 rehab (high estimate)
$5700 hard money cost (3 points + 12% per year for 3 months)
$1,900 escrow, title, other closing costs.
_________________________________

Max purchase price is $96,550.

In this case you know the most you can pay for this property is $96,550 and still break even at the end of every month.

I did not factor in vacancy rate or opperating costs but that should take atl east another 20% off that number. If you want to cash flow you need to widen the gap even farther.

This is great information but I guess I have 2 questions:

1. you mentioned in the steps that you should - get a HML or HML combined with a 20% conventional loan - What exactly do you mean by this? Is it that you should borrow your money from 2 sources??????

The reason I ask is because I am "cash poor" as Robert Kiyosaki would say

2. I noticed that you are from Moreno Valley. Are you still in that area? and along with that question: When you run numbers are you finding deals that way in Califorina or are you looking out of state. I know I am sure that it depends on what the rental rates are but from what I am aware of and at least here in the central valley, the rental rates really aren't great enough to be able to purchase a house and rent it out here.

Thanks for you help

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Originally posted by "**********":

Originally from greater bay area, lived out in the Valley for many years from around 97-2005. Very familiar with Tracy, Modesto, Riverbank, Oakdale.

What kind of help are you looking for?

Houses peaked at 300 a sq. and can now be found for 100 a sq and less, even in Tracy as of late.

1. Trying to find a Real Estate Club as close to Fresno as I can. I have tried several numbers for contact but with no success. I also have a contact number for a Jim Sparano for a REI Club in Bakersfield as well as Modesto but closer to Fresno would be great. Any info would be of great help.

Maybe I could go from there if anybody can help me with this this.

Chris

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**********,

you seem to know quite a bit in this area and in northern california.

Are you familiar with anything in the Central Valley area, Modesto - Bakersfield? Any help would greatly be appreciated.

Chris

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i sure wish I had gotten interested a long time ago. So how did that work, did you cosign on a mortgage for them and if not, how did they get financing for the deal

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by chance, where were you able to find your tutor that you had. I would love to get a mentor to help on my first couple of deals so that I can get the ball rolling again

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from what I have been taught, it is always good to make sure that you have rent comoing in that is 1% of the purchase price, and this obviosly depends on the area to but sounds like good advice for me

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this sure seems like it would be a lot easier if you were to have somebody loan you the money through a mortgage or dead of trust than to have to deal with all the partnerships and stuff, just borrow the money and then pay it back

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great advice but I don't think that would work for me. I would end up quitting my job because I hated it so much, not just the second one, but the first also, I am almost there.

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I have come across that also and thought that same thing while when I go to those so called free seminars or even the ones that you have to pay for that is what they suggest. Given the fact that I have no credit and no cash, how would you recommend that I get into the business, you seem very know knowledgable on the subject of Real Estate Investing.

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From what I am aware of the best way to increase your cash quickly would be by wholesaling properties. I have seen several houses but have yet to put an offer in on any house because the houses I am looking at are REO's and they usually require to have proof of funds when the offer is put in. Since I have no cash, and I am no planning on actually purchasing the house then I still need to get prequalified for a hard money loan. If this is incorrect let me know, or if there is a better way of getting fast cash. I have been trying to find a hard money lender but with my credit crappy, I have yet to find one that will even give me a prequalification letter, any suggestions.

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All Forum Posts by: Chris George

Chris George has started 9 posts and replied 36 times.

Post: Hard Money questions

Post: Wholesaling in Northern Ca.

Post: Wholesaling in Northern Ca.

Post: Newbie from California!

Post: Newbie from California!

Post: How to find properties with income?

Post: Partnering w/ another investor

Post: no cash and no credit

Post: no cash and no credit

Post: no cash and no credit