All Forum Posts by: Greg Scott

John:

I am not an attorney but have syndicated deals.  My understanding is that if anyone invests money but does no work, you have created a security and need a PPM.   If you are all directly involved in running it, you have a partnership.

That does not mean you should not talk to a lawyer.   Partnerships can be very difficult to manage.  You should put in place a partnership agreement so everyone knows their roles and what happens if someone wants out (or needs to be kicked out) or dies or gets a divorce, etc etc.   Proceed without an agreement at your own peril.

Nichola:

Congratulations on taking the first steps.  This may be a great deal.   Here are a few thoughts / ideas for you:

 - Confirm the rent / revenue yourself.    Check Zillow (not very accurate) for their estimated rent or use RentRange (pretty accurate).  Do the math and take out a factor for vacancy, say 8%.

 - Now take all your expenses out, including financing to calculate your expected cash flow.  Be sure to add about $300/mo for ongoing repairs.  

 - Check with a property manager and ask them about the area. Some areas are hard to rent or hard to keep tenants because they are rough neighborhoods.  If it is a rough neighborhood, increase your vacancy factor by quite a bit.

 - Make sure you have enough cash to cover any deferred maintenance or emergencies.

 - I'd recommend making the purchase contingent on an appraisal, paid for on your part.   One of the benefits of traditional financing is that it requires an appraisal and is a checkpoint on valuation.   If you find out the place is worth half, you can bail.  If you find out it is worth more then you are good.  You don't have to share the results with the seller unless you want out. 

 - Seller financing is great as it minimizes your cash out of pocket and may allow you to keep a cash cushion on hand.  If you already know it will appraise higher, you may be able to quickly do a rate & term refi and pay off the land contract.  But this is why an appraisal is key to have done up front.

Good luck

Ethan:

If you have a property in good shape at the right price, you will never have a problem finding renters in any of those areas.

I can't give you good triangulation on rents across that whole area because it will vary by community, neighborhood and street.   In Oakland county, Zillow is directionally accurate.  If you need more precise data RentRange is a good place to go.

Good luck.

Scott:

I've owned properties in as many as 6 states at once.   Owning isn't that hard.  Getting set up is the hardest part, but I've enjoyed the benefits of multi-state investing.  Often when one market is swinging down, another is going up.  It gives you a lot of flexibility as an investor to maximize returns.

Probably the most critical part is buying.   Finding a solid property at a good price is harder if you do not live there.   Many turnkey rental providers can solve that problem.   The only downside is you aren't going to get a deeply discounted price, you basically pay near-retail.  Regardless, find a local property inspector to check things out for you.  (Don't take an inspector recommended by the seller)  Ask them to take lots of pictures.

The second most important part is fining a good property manager.  I've had success with NARPM.  With a good property manager and a good property, managing out-of-state rentals is a piece of cake.

I've actually bought, owned, and sold 4 properties in 4 states that I never once saw with my own eyes.  I made good money on every one.

Good luck.

Relax.  You are fine.

A HELOC is Home Equity Line of Credit. As a line of credit, nothing happens until you draw on that line of credit. So, even if they approved your HELOC, nothing has changed. It is like getting a new credit card (without annual fee) that you haven't used yet.

Since you already have been approved, you can simply keep the HELOC open or you can call to close it.

If you've given all the info to another investor, you are at the mercy of their good will.   Hopefully they treat you right.  They are in the drivers seat so I would look to what they would offer you.

Going forward, I would maintain control of the information and make an agreement up-front, before handing off.

Even better, once you move up the learning curve, get the deal under contract yourself.  Then you have something you can make money on and have complete control.

Nathan:

Nice job on your flip.

I was nervous about being a landlord too, so I was doing flips.  I bought a great one in downtown Birmingham MI.  I closed on the day that the Big 3 announced massive layoffs.   While we executed the rehab very well, nothing sold for almost a year.   We were dying.   

Ultimately, somebody came by and was interested in buying but was concerned he couldn't sell his condo.   Voila, I bought his condo and he bough my expensive house and I became a landlord.   The good news is, I found out it wasn't hard at all!   It does require some education though.

There are lots of podcasts out there about being a landlord and lots of good info on this site too.  I'd encourage you to also consider Lifestyles Unlimited.   They have hundreds of hours of online videos about buy & hold single family that can help a ton.   Feel free to send me a message and I can give you more details.

Fernando:

Looking for a mentor?   I can recommend one.

The premier education and mentoring group in the country is expanding nationally.  I am not an employee, but have been a member since 2011.  I honestly think it is the best bang for the buck in real estate education.   

I joined from Detroit when they were only in Texas and I flew down regularly for classes.  It was completely worth every penny.

They happen to be coming to Tampa in a couple weeks, so a short drive from you. They have a free 1 day event and in a few weeks a 2 day event that requires a 1-year membership.   You can check their sites, but I think they are still running a deal for those that go to Tampa, they can get a membership for $200.   It give you access to hundreds of hours of online classes and unlimited calls with a mentor for the whole year.

Check out these links

www.meetdel.com

www.givemetotalfreedom.com

www.lifestylesunlimited.com

I've tried wholesaling and did a few deals.  However, it became clear that wholesaling requires a lot of work and it was hard to do while holding down a full-time job.  I still have done the random wholesale, but it was just out of luck or circumstance.

I know a few people that do wholesaling for a living.  It is their full time job.

Buy & hold real estate investing is something you can do with very little time commitment.  It gives you the opportunity to grow your wealth while holding down a job for your living expenses.

David:

Part of the answer depends on your goals and situation.  As you climb higher in your profession, will you need to move a lot?  If so, it may be better to buy a single family rental and rent where you live.

I think the days of "my home is my investment" may be over.  More people are starting to realize that, while it can go up in value, your primary residence does not provide you a stable retirement income.   I would treat it as a cost of living.