All Forum Posts by: Dan M.

A couple that people use:

HELOC

credit cards at 0% for a year

401k loan

The BRRRR method in general

@Merkourios Moschovis Well maybe we can start something or look into what's already around. Looks like Yan is also investing in the area. 

Hey Mekourios

Congrats on the Norwich property. I see the people on craigslist in Oneonta making a KILLING by the room. Do you know of a local real estate investors club in the area? I'll be moving up that way soon maybe we can grab a coffee. Sent you a PM / connect request. 

Well, it would have to make money. Is the loan available for subject to without triggering due on sale clause? Otherwise you need 590k to clear out the loan and take on the financing.

After that hurdle, assume you subject to, a critical component is what is the interest rate on the old mortgage, and what is the payment? 

If the mortgage is assumable or not. lets just say you buy it for IDK 1.15 at x percent. Play around with a mortgage calculator. I like the one on bankrate.com.  Maybe the numbers only work if you buy it for 1.1 or 1.08 at x percent. You have to take the difference of that 590 assumable mortgage payment and whatever it is you buy it for at whatever percent your taking financing. For simple math lets say you give 1.2 at 6 percent. You subtract the 590 from the 1.2 and that's how much you finance. Then determine the rate. Add both of the payments together ( the assumable loan and the new payment your financing from the lady at whatever interest rate) Does it cash flow?

 The property must cash flow or you at least live in one unit to make it worth the while. If you do live in that unit, how much would you save on rent? Is that less or more than what your paying now? 

Until you know all the numbers you cant possibly throw out an offer. No one can and if they say they can it would be foolish at best. 

Welcome Rajiv. Best of luck on your journey! 

Hello Steven,

I know here a bank wont take a loan out on a mobile home. Did you speak to a bank and make sure one would? If not a bank sometimes you can get semi hard money type of loans on mobile homes but there are expensive. How do you plan to add value to use the BRRRR strategy? Would it serve better as a rental vs a BRRRR? Are there any expenses your forgetting in your calculations? These are just some questions to be answered.

I have known people that make good money on mobile homes, but its more of either owning the park or just renting them out / air bnb. I haven't come into any experience of someone BRRRing them I assume mostly by not being able to get the funding for the refinance part. 

Its good so far but where's the rest of the story Tyson? It feels like its left lingering in the middle / almost the end. 

Hello Lennel. Congrats on making the decision to invest and setting up the LLC!

The biggest recommendation I would make is to know the market 100% before you invest in it. If you plan to invest long distance actually go to the area and drive around, maybe stay a day or two. Watch the market like a hawk for a few weeks. Look at the prices things sold for over the past few years. Look at what if anything the municipality has going on. Talk to the locals about industry coming or going. Once you get a good feel for the market, and the numbers work, pull the trigger. 

The second recommendation, and this is critical and in line with the first recommendation, is to be 100% sure the numbers work. You can not BRRRR if the numbers do not work, and you will be trapped if they do not, and possibly lose every dime you put into the property. Its serious.

That said, best of luck to you on your journey! 

Investing in a syndication is good if you want to be purely passive. Its hard to believe that any syndication would buy a property where they don't hedge the downside by buying right, or have a plan to increase rents with the market over a period of x years. It would be foolish that any syndication would not assume worst case scenario of rents coming in and be able to cover their debt for a fairly long period. I think your investing in experience and they will make the right move, just do your homework if that's the route you go.  Make sure management has a good track record and the deal they are talking about makes sense. Make sure they are investing their own money into the deal. 

However, my two cents, is investing in syndication you forgo a lot of profits yourself by being 100% passive. Yes you can make money, but its not as good as if you did it yourself or just had a partner where you have a large amount of equity in the deal. The syndicators putting the deal together usually get free equity and usually management fees to boot. 

My two cents is that real estate is local and its hard to make big picture causations. For instance here in New York there was a large migration out of state, and I do not believe those people will ever return to the state because they fled high taxes and better opportunities elsewhere. The governor even addressed it as a problem, and if they are even acknowledging it you know its a problem. New York and New York City are two different things and its a large state area. In New York City living there is notoriously expensive and I'm seeing in my local area people moving two counties up and commuting for work. The same applies for northern New Jersey.  The mayor of New York City has I believe a 6 billion dollar deficit for this years budget and is crying for federal aid. That said though, real estate is still appreciating across the board. Inflation from previous years being one of the main drivers.