All Forum Posts by: Dexter Stewart

Hi there BP,

I  wasn't sure where to post this, so I put it here, sorry if it's wrong. I started my own company which offers Valet Trash services for large apartment complexes. I am reaching out to the BP community in search of help. I have not been able to close a contract since I started back in August. I have spent the majority of my time visiting complexes and trying to get a hold of these property managers that never seem to be around. 

Does anyone on here have experience selling to these large complexes and if so, what advice could you give me? Our service is not the cheapest but we are also not the most expensive. Our reason for not being the cheapest is simple. We are the best. We offer multiple services that our competitors do not. I tried to do a referral program in order to drum up business and get more leads but that didn't seem to work. 

I cannot afford a full-time salesperson and I cannot be that person, due to my full-time job. But every chance I get I go out and try to meet with property managers. I thought about sending out direct mail, but I wasn't sure what to put. Or who to send it too. I am looking for any piece of information that can help me close a deal. I am looking to service 10,000 units over the next 10 years. I believe it is a very attainable goal. Thats only 1,000 units a year per year. 

I live in South Florida, the Fort Lauderdale area and while I know that there is quite a bit of competition in this space, I believe that I can be the biggest and best valet trash service in my county. And eventually my state. I am looking to meet up with anyone that can help my business grow. I am looking to service at least 1,000 units by the end of this year. 

I look forward to all of your responses. 

Thank You BP.

Best Regards,

Dexter Stewart

Hi BP, So I️ am a novice REI. I️ have spent the last year or so learning everything that I️ can about real estate. I️ love it! I️ love the ability to scale, use OPM (other peoples money) in order to grow an everlasting REI portfolio. Long into short... I️ have saved quite a bit of cash in order to invest in property. What has really caught my attention is Tax Deed sales in the state of Florida. What I️ am looking for is if anyone can point me in the direction of a reputable mentor in this space someone who can teach me the ropes. And I’m not looking for an “internship” I️ am willing to pay for the knowledge I️ seek. I️ am looking to grow a portfolio of rental properties that can cash flow every month. I’m hoping tax deeds can at least give me a jump start. I️ have heard about The Default Investors Association run by Richard Meyer they focus on tax deed and foreclosure surplus. Has anyone heard anything about them? I️ have watched some webinars and they seem to be very knowledgeable. However I️ have sent some emails to there staff and have yet to get a response. So I️ am asking BP if they have any knowledge of this group or others than can help me get started. I️ would greatly appreciate it. Thanks in advance. All the best, Dexter Stewart

Hi there BP,

So I have done A TON of homework in the world of REI and I am 110% that Multi-Family is where I want to be! I have looked at the whole MF vs. SFR and I know we can go back and forth on both all day, but I am young and everything to me right now is cash flow and I see myself investing in the SFR in the future, but for right now MF all the way!

That being said, I have researched Multi-Family properties extensively and though I have found some AMAZING deals in other parts of the country (and in other parts of Florida as well) but being a novice investor I definitely want to invest in my backyard first. So for me that is Broward County, I would be willing to extend as far as the tri-county area (Palm, Broward & Dade). 

My question to the community (sorry for making you read all that) is, are there any investors in these areas getting a cap rate of 12-15% yr.? Am I aiming too high? I know some people don't invest in less than 2% (24%/yr.) which would be amazing, but given the nature of Florida I am looking for 15%, I would go no less than 12% including all expenses. Is this possible in these areas? 

Lastly, what is the best way about finding these properties? I was thinking of using direct-mail find that I'd rather pay a wholesaler $3-$5k and get a guaranteed deal versus spending $2-$3k and possibly getting none. I would love to hear the thoughts of the community on this. Thanks. 

Best Regards,

Dexter 

@Account Closed Thanks for your post! And yes that's something I've though of getting a hard money loan, purchasing a home through a wholesaler and then giving up some equity and getting a conventional loan, my fear is that they will again ask me for a down payment, even the property is in my name, is this true? 

Thanks again to everyone for there input I really appreciate it! 

Hi there BP, I am a newbie, no question but I am really interested in REI and I know what my goal is, which is to have at least 10 SFRs by the time I'm 30 (I'm 20 right now).

My question is, I know that bank's typically asked for 20% as a down payment, but if I am purchasing the property at 70%-80% then couldn't I get it completely financed? I am looking to pick up properties that can bring in $200-$300 positive cash flow, I do not have the cash for a down-payment, but I do have enough to paint, carpet, etc. 

Also what is the best way to find "deals" in my backyard right now there are tons of houses getting flipped and though I am not interested in flipping I definitely want to start building my portfolio. I tried looking for deals through probate, spent almost a year, but being in South Florida most of these are apartments and 9/10 already had realtors in place or were looking for straight cash. 

Looking for any advice from the BP community. Thanks in advance.

Best Regards,

Dexter 

Originally posted by @Lauren H.:

Hey Dexter, 

There will always be a trade off between higher down payment with higher monthly return on investment, or lower down payment with higher cash-on-cash return. There should be a sweet spot where you can use as much financing as you are able, while still earning a profit monthly. 

For my goals in real estate I would rather have the extra $400 per month in net income now, rather than realize a huge increase in income in 15 years. The downside is that you have to wait 15 years to see the mortgage payoff put money in your pocket. The present value of money will always be greater than the future value. $400 now is worth exponentially more than $400 15 years from now, especially if you reinvest it into property. That can happen two ways: upgrade units you own and increase rent or save the profit and invest in more units. I will keep my $400 now, take the 30 year loan and more quickly bankroll myself into my second and third investment properties. The bank makes more money, but who cares? You make more money too! 

My goal is to work myself and my husband into full self-employment within 5-7 years with a target income that includes having to pay full price for health care. We bought our first 4plex just over two years ago. We are shopping for property #2 now and will have the down for #3 within the next 6 months. 

Check out 'The Millionaire Next Door' for inspiration!

 Thank you also for your posts! Sorry for making you type so much, but I gotta say, I definitely see what your getting at and I like it. Money in my pocket is worth a lot more than no money in my pocket. So that is something I will definitely keep as a reminder, thank you for that. 

I like how I can reinvest it into the current property or get into another, I never looked at it like that. And good luck on your next properties! I'd love to hear about to them make sure your post your success! And I will definitely check out "The Millionaire Next Door" thanks! 

Originally posted by @Jean Bolger:

You can get access to the MLS simply by talking with a real estate agent. Try to find one that works with investors (attending your local real estate investors meetups is a good way to get leads and recommendations). As a buyer, the services of an agent will not cost you anything. The commission on the sale is (almost) always paid by the seller.

It's tricky to get into a property for no money down. (Unless you are a veteran- there is a VA loan program that allows 0% down). That's not to say it's not doable. It just might be a bit of a needle in a haystack, and you might end up with a less than ideal property if you insist on going that route. That said, one of the Biggerpockets honchos, Brandon Turner, has written a good book on No and Low downpayment options - check the "Learn" tab at the top of this page. There is a TON of good information to be had on the blogs, the how-to guides and the books. Get educated first, so you make a smart move! You're on the right track for sure.

As far as the 30 yr/15yr question: Don't underestimate the expenses of owning a property. If half your income goes to paying the mortgage, it's quite possible that the other half could be taken up by expenses. The idea that cash flow equals your rental income minus your payment is one that has caused a lot of budding investors to fail. One big repair (furnace, roof, sewer line) and/or a few months of unanticipated vacancy can knock you on your rear. You can always pay down your mortgage ahead of time, and get the property paid off faster, if you get the 30 yr. If you get the 15, and you can't make the higher payments, you're toast.

here's a post that I wrote for my own blog about the owner occupied duplex as a starting point: 

 Gotcha well thank you for the info and sorry for making you type so much but know it's definitely appreciated! Thank you!

Originally posted by @Lauren H.:

Originally posted by @Dexter Stewart:

Hi there BP, 

I am looking to get into the REI world by building a portfolio of rental properties. I have done quite a bit of homework on this topic and it seems to me the best way to get started is with a multi-family home.

My question(s) are as follow:

1. How does one fine these homes? 

2. Do I necessarily need to live in the property? 

3. I see many blogs talk about 30-year mortgages, but wouldn't it be better to get a 20-year or 15-year mortgage in order to pay it off faster (more positive cash-flow)? 

Thanks for the time BP. 

Hi Dexter,

1. You will find property when you start taking time to look. Don't watch TV in your spare time, instead search online in MLS for your location. On weekends drive around a get a first hand look at the neighborhoods you are thinking of buying in. Find for sale signs.

2. If you are willing to live in the property you give yourself the option of getting in with a low down payment. Use other peoples money, not your own. 

3. If the property cash flows on a 30 year fixed rate loan while you are living in it why would you ever want to pay it off? Why wouldn't you save all the cash you are now earning (and saving by living for free) and invest in another property thereby increasing your monthly income? Buy a property that has the potential to add value, use your free time to input sweat equity then use that equity later for a line of credit on the next property.  

The most important thing is to determine your goals, then remind yourself of those goals and align every decision you make in your life to move you toward your long term goal. If your decision or your spending doesn't somehow get you closer to your goal, then it's the wrong decision or it's something you shouldn't spend money on!

 Hi Lauren thanks for your post. What do you mean by using other peoples money? Do you mean a bank? Do you know of anyways of being able to get a loan without a down-payment necessary? 

Also please see my post to Jean in regards to cash-flow and let me know your opinions. Thanks. 

Originally posted by @Jean Bolger:

Hi @Dexter Stewart!  I am assuming that by 'multifamily homes' you're talking about duplexes, triplexes and quads? If you get into 5 units or more, then there is a separate set of rules that apply. Those smaller multifamilies though are an excellent way to get started. Those properties are most often sold the same way single family homes are sold: they are listed with a real estate broker and marketed through the mls. There are other ways of finding property as well, as other posters have mentioned.

You don't have to live in the property, but if you don't then you will pay a larger down payment - probably 20-25%. If you find a place that you can owner occupy for a few years you can qualify for an owner occupant mortgage which requires a much lower downpayment, like 3.5-5%. So it all depends on your finances and your preferences. 

As far as the length of loan you can get... there are many schools of thought. Some people prefer to get the longer term loan. It brings them more cash flow immediately, and they figure that since the mortgage is getting paid down by the tenants anyway it's a better deal to have more money now rather than more money later. Somebody who has a decent paying job but is planning on retiring in 15 years might not need the money now but would love to have the place paid off when they retire so they get more cash flow then. So a 15 yr mortgage would work great in that scenario.

 Hi there Jean, thank you for your post. I am definitely looking at 4 units or less. I am no way ready for commercial but thanks! 

In regards to the down-payment, is there anyway to purchase the property without a down payment? Or next to nothing. I was hoping to use any down payment money to do small cosmetic fixes to the property to be able to raise the rent. 

If I don't have access to the MLS what would you recommend that I do instead? In regards to the loan, I do like your point. But what I figure is this, let's say I have 4 rooms at $400/unit. That would be $1600/monthly. And let's say I could get a 30-year mortgage at $800. That would give me $800 cash-flow for the next 30 years, which is phenomenal for a rookie like me!

But now what if it was a 15-year loan for $1400. Now the mortgage is paid off in 15 years (I'm still making $200/month) and in 15 years I start making $1600/monthly (plus whatever the increase in value of the property brings in). Am I missing something there? 

Just want to know your thoughts. Thanks again for your post, I really appreciated the information. 

Originally posted by @Yasmine Bisumber:

Originally posted by @Dexter Stewart:

Hi there BP, 

I am looking to get into the REI world by building a portfolio of rental properties. I have done quite a bit of homework on this topic and it seems to me the best way to get started is with a multi-family home.

My question(s) are as follow:

1. How does one fine these homes? 

2. Do I necessarily need to live in the property? 

3. I see many blogs talk about 30-year mortgages, but wouldn't it be better to get a 20-year or 15-year mortgage in order to pay it off faster (more positive cash-flow)? 

Thanks for the time BP. 

Hi Dexter, there are a ton of ways to find properties. It may not be as easy as one may think but it is possible. MLS, Wholesalers, Networking, Direct Mail and so much more. Let's connect and speak, happt to help in anyway I can.

Welcome to the family.

 Hi there Yasmin, thank you for your post! I will definitely reach out!