All Forum Posts by: Dan M.

Treasury bills are paying 5% and if you stagger their maturity you could have the money ready to go if you find a better opportunity. I've heard of high yield savings accounts paying close to 5% now too. 

Hello Jon,

Just something to consider I don't know the details but beaverdam lake gets drained periodically and its just a mudpitt. 

So you decide if you want to put it in the LLC or your own name.

If you do it in your own name, and live there, you will be able to take a personal residence loan and qualify for loan programs that only require say 5% down + closing costs. This is good for "house hacking" scenarios". 

If you do it in the LLC's name you will have to get a commercial mortgage and put down 20-25%. This is the best way to do it in my opinion as your payment is lower and there is no PMI.

What questions do you have other than that? 

Get some real estate related books and take it with a grain of salt that some of the books are out of date to an extent.

You have to learn how to analyze a property, without being really good at it, or at least moderately good at it, you'll never know if a property is worth buying. I recommend doing at least 5 per day. 

Hello Kevin,

There's a lot to consider.  First off congrats on doing what your doing now, that's a big stepping stone and I wish I did the same thing starting out.  I guess you really have to decide where your planning to move to. That comes first. Start looking at listings on zillow realtor.com trulia whatever and find that area. Then find out if the house your looking for exists. Many areas saw huge appreciation I think its challenging at best to find a duplex where one side pays the whole mortgage anywhere in the country. 

Look at paying into your debt like this: Your making 3.75% ( technically after taxes only  about .75 of that ) on your money when you pay that debt down. You can put money into no risk 4 week treasury bills right now for over 5% ( technically about 4 when you consider taxes ). Its a safe bet that you can make more than 3.75% on your money somewhere else with little to no risk. 

Ultimately though it comes down to what you and your partner want to do. Instead of getting caught up on the numbers figure out an area , see if its feasible, drive to it and look at the area, then see if your willing to take the jump to actually move to that location. 

Craigslist and facebook marketplace are the first two that come to mind. FSBO.com or something like that I believe is a fairly inexpensive service.

I'm not a wholesaler but this is what I think is important. You have to know a general idea of what type of work has to be done to the house, and how much its going to cost. Doesn't have to be perfect, but it has to be close. Then you find out what the house would be worth if it were fixed up with comps in the area. Then you subtract the fixed up cost from what the renovations would be to get a number. You have to factor in closing costs for yourself and the investor. After that's all finished, can you sell it and make a profit where the investor gets a discount on the property? Each property is different, sometimes an assignment fee might be 3000, sometimes it might be 30,000. Part of that answer is how good of a deal you can get the property under contract for. Lets take real numbers.

You get a property under contract for 100,000. Fixed up, it will be worth 200,000. You go and look at the property before you make your offer and get it under contract, and you determine it needs 40,000 dollars worth of work. Closing costs for you and the investor are 4000 each. 200,000 - 40,000 - 100,000 - 8000 = 42,000. Then you negotiate from there what hes willing to pay and what your assignment fee will be. You should have a good idea by then. 

I would say no because 1) are they skilled enough to fix? probably not 2) Its a conflict of interest 

I say do it then rent it and get a cash out refinance and do it again. If the numbers work your good to go. You have to sacrifice to grow initially, and doing that strategy ( aside from house hacking ) is the best way to growth. I would recommend from the cash out from this deal to find a duplex and live in one side and rent the other, that will propel you quickly to enable long term success with little risk. 

Short answer: Dont pay pmi its a wasted expense. Your return on not paying that expense will far exceed the extra 6% down.