All Forum Posts by: Scott Dixon

Hey @Patrick Vera

I would say this one would be easy to pass on.  At the end of the day you would most likely be paying money out of pocket each year to hold this condo as a rental.  

Best of Luck,

Scott Dixon

Hey @Mel F.

I have actually seen a couple properties pop up on Craigslist in the "Chambana" area which might fit your needs.  Take a look and let me know if you have any questions about specific properties and/or neighborhoods.  Since you will be coming to the area and looking to continue investing you can check out http://www.cirpp-live.com which is the most active local investor group.  Also @Account Closed might be able to provide a little more guidance on the lease option / rent to own market in Champaign Urbana.    

Best of Luck and reach out when you get to the area and we can meet up for a beer or coffee and talk a little REI

Scott Dixon

Hey @Alexander Romanov

I was in a similar situation a couple years back when I bought my first property (duplex) with a FHA loan. Same as you i wanted to jump into another 2-4 unit property with a low down 3.5% or 5% but at least in my situation I ran into a road block. From what I found FHA was pretty much one and done. If you just turn to conventional financing you could most likely get a SFR for 5% down if it is your primary residence but if you want another 2-4 unit property as your primary residence you are looking at 20%-25% down. Again this was just my experience and I hope you find a lender with another option with low down.

Best of Luck,

Scott Dixon

Hey @Oliver Bonk

What about renting the space(s) out to skilled trades?  Plumbers, Electricians, Contractors, etc. depending on the maturity level of their business usually need a space for their service trucks, supplies, equipment, and possibly a small office.  You could reach out to a couple local commercial agents and they should be able to help you in terms of the current demand in the area and going rate per sq ft for such a space.  

Best of Luck,

Scott Dixon

Hey @Steven Schuster

I am assuming you would like to refinance into a traditional Fannie/Freddie loan product. If this is the case I believe the current mark is 6 months "seasoning" before the bank would honor the higher appraised value. If you would like to do a 30-year Fannie/Freddie conforming loan you can pull out 75% of the new appraised value for a SFR or 70% for a 2-4 unit property. Before you pull the trigger on the HML and the project you probably should go talk to several loan officers in terms of your exit financing (Fannie/Freddie) to ensure you will meet all of the requirements they have to close the loan. You do not want to start the project prior to this step to mitigate the chances of being stuck in a property with a HML and no option for a exit.

Best of Luck

Scott Dixon 

Hey @Lucas F.

From taking a quick look at your numbers I would say "not worth it." Your PITI looks to be around $2060/month leaving you with only $640 per month without including anything else (vacancy, utilities, repairs, supplies, property management, and cap ex). At the end of the day this one would be a wash or actually you would be paying to take care of the place.

Best of Luck,

Scott Dixon

Hey @Bobbi Martinez

Looks like you have a very strong "why" for real estate investing.  Found a good explanation from a Forbes article which simply stated your mission statement should answer the following 4 questions:

• What do we do?
• How do we do it?
• Whom do we do it for?
• What value are we bringing?

Keep in mind that your mission statement can be somewhat dynamic and change over time as you expand your knowledge of REI and find your niche. A few things that might help you find that niche could be attending a local BP Meetup / REI Meeting, listen to the BP podcast, and reading @Brandon Turner book The Book on Investing in Real Estate with No (and Low) Money Down  . 

Keep up the great work and momentum. Best of Luck in your REI career

Scott Dixon

Hi @Ezhil N.

Welcome to BP. Where are you specifically located in Central Illinois? I am a little to the east in Champaign/Urbana area and always looking to connect with liked minded individuals in the area of REI.

Scott Dixon

Hey @Shawn Q.

Sounds like this one was a blessing in disguise.  With the property being on the low end of the Champaign/Urbana spectrum and your repair budget being tight any unforeseen repairs would have quickly put this project profits in the red.  Are you sticking to Urbana or a certain farming area for your property searches?

Best of Luck,

Scott Dixon

Hey @Hendrik Inno

Welcome to BP and congrats on getting started at the age of 18!  You are never too young and could use your age as a huge advantage.  Pretty much anyone who has been successful in real estate says their 1 regret is that they didn't start sooner.  

I do not have insight into the European market but in terms of loans in the states it is very common to use a loan to finance a portion of the property.  With that said, you will find as many different opinions as people on BP but it is hard not to see the value of buying a single family residence, duplex, triplex, or fourplex with 75% - 80% being loaned by a bank for a 30-year fixed interest loan at historically low rates.  Utilizing a fixed interest bank loan enables you to purchase more property for your money and take advantage of a key to real estate investing which is leverage.

Best of Luck,

Scott Dixon