All Forum Posts by: David Van Singel

If you're looking for a valuation method for a REIT, I have been told to compare price to NAV or price to book value. Given that you're less of a finance/numbers person, look at what you would be buying. Is the company into leasing office or retail space? Are they the kind of company that focuses on residential? They could be a little more derivative. For example, AGNC is a REIT that focuses on residential mortgage backed securities.

As for where you could go to learn more, I really like the youtube channel "Learn to Invest - Investors Grow". Jimmy focuses on value investing but he also does a good job of explaining concepts. I wish I knew of him when I was starting college and going through business classes. Given, this is much more equities based. If you're looking to stay more real estate focused, stay around BP. Even if you don't understand a lot, you'll absorb more than you think. One day, it will make sense. 

To use the overused phrase, "don't skate to where the puck is, skate to where it will be". Everyone here is saying that you need to put yourself where the investors will be. If you're looking to get more stock investors, be a contributor to platforms like seeking alpha. You're doing good on the RE side because you're on BP. Show that you have the knowledge and value so that an investor would like to work with you.

As I'm relatively new to the forum, I could be wrong. It comes down to your personal preference. I, personally, would not have my income be mixed with my personal/general account. This way, you have a sort of barrier in how you spend that money. It makes sense to me to keep them separated. This way, you're not accidentally spending money that you shouldn't be spending. This could be for if a big tax bill happens and you happen to buy a new car at the same time. This can keep you out of that situation.

I have a contact that could help you. They would want to know a few different pieces of information. What are your reserves? What are the assets? What kind of property are you looking into? Is it a basket of properties or is it a single property with multiple doors? Are you looking to pull out some equity from other properties to help finance the deal? To make it make sense for them, they would need it to be at least a 300k loan. At your volume, it will be pretty easy. I'm working out of Celebration FL so if you want to meet up, we can talk in person or we can hop on a zoom call and talk in greater detail. 

Unfortunately, that is the challenge of starting out, there's a ton of information and you don't know where to start. The best advice I have heard with real estate investing is that you should stay close. Try not to have your properties be more than 30 minutes away. This is nice for handful of reasons. 1. It's easy to hear about if something happens in the area. Your circle of friends and family may even live out in the area to help you keep an eye on the property. 2. If you have a property 3 hours away that you need to put some work into, on any given day you plan to work on the property, you've committed 6 hours of your day minimum. You might not want your next door neighbor to know that you're their landlord in case they are mad about a rent increase but starting out, you may also want to be able to zip over for a quick fix. 3. you know your market. If an area of town is becoming the hot place to be, you know you want to own there. Lots of appreciation. Bottom line, invest where you plan on being. If you feel you want to get out of CA, maybe hold off buying in CA. If you want to stay in CA, know that it will be pricy.

As for the issue of qualifying for a loan, it may all depend on what you plan on doing after you get your degree. I left my job when I moved to Florida. As a 1099 individual, I don't just need 2 years of taxes, I need to provide 2 years proof of income working as a realtor. If you're a W-2 employee, most banks take the last 2-3 bank statements and 2-3 of the most recent paystubs. I am not familiar with the creative financing people here on BP but if you really want to get into real estate, you may be able to learn more from them.

 You'll probably hear this a lot when starting out "it depends". 

Are you looking to buy a mobile home and rent it out? Yeah, that may be possible. If you're looking to get into a multi-million dollar deal you would probably get ignored. It depends on the scope of the property or properties. Additionally, when I say "value" that can take multiple forms. If you don't have the cash available, you would want to provide some sort of other value to your partner if you want to be 50/50. I know of one youtuber, he put $0 down and is 50/50 on a mobile home park. He has the partnership but this is what people can mean when they say sweat equity. Value isn't just in cash contributed.

Partnerships are great if you're looking to get started. Many hands make light work. Many wallets can support a large deal. If you're looking to ask the partner to fund the purchase, what are you bringing to the table? A lot of people will want to see what your downside is as well. If you have no skin in the game, why would they want to trust you with their money and you reap the rewards together?

It may not hurt to find a real estate agent that you mesh well with first. You might not know someone that is looking to partner up for a deal but the agent might. The only challenge is that most agents will not work with you until you have pre-approval. It wouldn't make sense for you to fall in love with a deal if you can't pay for the deal. 

It won't hurt to look for both a partner and an agent but you will want to know how you are providing them enough value to work with you.

The other commenters here have great advice but I'm sure you would like extra. Given that you are newer to real estate investing, a realtor will be great for you. They may not be the most precise with a repair estimate but they will be solid with the ARV. With your ARV, you can work backwards towards your desired ROI. If the realtor has worked with other investors, they may have an idea what certain repairs will cost but again, not the most precise. It is also a good idea to add some extra cushion to the ARV and repair costs. The cushion is for when/if something goes wrong. If nothing goes wrong or over budget, you get a better ROI. Also, depending on how well the realtor knows the listing agent, you may be able to feel out what the seller is willing to accept.

If you were looking for a "you must do this", you're not going to get it. It's your money and effort here so you need to make the best choice for YOU. This is also coming from a place of bias as this is what I did and is working for me. If you are going to be a good distance away, hiring a management company may make more sense. Worst case scenario, you may spend more time traveling to and from the property than actually working on it or maintaining it. Basically, you can view what your time is worth. If you feel like you are spending more than $X/mo between any repairs that may need to happen, cleaning, etc., you will need to spend a certain number of hours commuting there as well. Pessimistically, if you have 4 hours for round trip with 2 hours of work, that's a good chunk of the day. If you end up doing that every weekend, you now have 24 hours in per month. Assuming you value your time at $20/hr, $480/mo for you going out to your property every month. If instead you went and paid a management company $200/mo to manage the property while you sit on your butt and do nothing, you're theoretically ahead by $240/mo. Again, I'm not saying that you must hire a management company. I am saying that your time has value and you may find more value in letting someone else manage the property while you pursue higher value opportunities to grow your real estate portfolio.