All Forum Posts by: Dyami Pike

Quote from @Dyami Pike:

Quote from @Jeff Schemmel:

worked my butt off.  saved $5k, and got the seller to pay my closing costs. 

I feel like it's a lot harder now to find sellers that pay closing costs, but I like that idea! We have the cash to put a down payment or close to it, the closing is really what we are saving for!

The last time I wrote an offer that didn't ask for closing costs on the buy side was earlier this summer...June I think.  Since then every single transaction has had some kind of closing costs paid by the seller.  The market shifted late summer, and I'm sure it'll shift back to sellers come spring, but it is common to win closing costs at the moment; at least here in Minneapolis/St. Paul.  I've even won closing costs for my buyers after a surplus appraisal in a competitive situation.  It can be done.

worked my butt off.  saved $5k, and got the seller to pay my closing costs. 

1. Bought a mobile home on tiny piece of land for 10k

2. Seller financing. It paid for today..

Be willing to start small..

Inheritance for the first house, then no collateral, high interest personal loans from banks for the next 6. Houses were so cheap in cleveland, 50K got you a great low income duplex.

Got lucky and I accidentally timed it perfectly, Just before prices started to jump.

@Dyami Pike Ok, so you've noticed that "Guru News" talk's about go get yourself a 0 cash 0 down deal right, BUT have noticed a HUGE void of anyone actually talking about having done it. 

There is a reason for that....

Also, talk of max out your everything, 401K, credit cards, Aunt Sallies borrowed funds etc etc, and go use that epic leverage to go do REI. And noticing a HUGE void of persons yapping how great that all went.

Yeah, again, there is a reason for that....

Here is the Reality-Check. MOST, and when I say most were talking 90%+, who START in REI via these assorted fu#keries-of-finance, they FAIL, big time. How do I know? Because I am the shark who comes in and bails them out for pennies on the dollar. And while it may seem painful and vicious, it's not, I am saving them in that blood-letting. Fact is most who do that are oblivious what there doing and get into horrible "deals" at idiotic prices. I am neither, I know what i am doing and I price things right, so yeah, it hurts when I CORRECT the pricing. That's reality.

Fact is if you don't have the $ to "play" then your NOT ready to be a full blown active property investor, WHICH IS OK. It drives me BONKERS how there seems to be this mass delusion that everyone has to go from 0 too F-18 Fighter Pilot over-night. And yeah, that IS an accurate comparison, life as a real-deal investor IS like piloting a F-18 because risks are very high, very expensive, and mistakes are not forgiving, there's no pulling over to tinker on things, nope. 

There is WAY better, smarter, cheaper, more successful ways to START. Know why you don't read about those, because it doesn't sell books, it can't readily be monetized by some "Guru", it isn't sexy and flashy talking about how to get rich SLOW, no, everyone wants to read that all they need to do is change a mindset and congrat's a check is in the mail for tens of thousands. 

Your Step 1 should be find who the wanna-B's are in your area, and who the Legit "Doers" are in your area. Then Step 2 is find a way to hitch your wagon to the Doers. Find a way to serve them, work together. Be honest, say you want to be them one day, and you'd love to make them a million $ learning how, and to make a million $ for yourself in the process. 

If someone came to me with that attitude, I'd put them through the pases, half way blow em off, but that's only to be sure there legit and will work through it, that they got the effort and perseverance. That earned, DONE, your in, all you'd have to do is be a great student and put effort in and youd make a lot of $, but most importantly, within 12-24mnth have the knowledge and experience from actually doing things, real life things, to be able to do it on your own. 

Many of my investor friends and associates think exactly the same as I do, and would be open to the same. Because remember, were self-made too, once upon a time we were at 0, and had to earn our way in and up. So we have an appreciation for the grinder. 

But all the high leverage antics, do yourself a favor and forget that BS, it's a fast track to NEVER getting into REI, just getting in to rapidly loose it all and then some. Were playing with things that cost hundreds of thousands of dollars, money is required, lot's of it. I bought my 1st deal with my reputation which got me OPM, BUT key is I had built a reputation via doing for those others in REI for some time.

The only E-Z Button is the one that leads to broke. 

Quote from @Dyami Pike:

I'm looking at getting started in real estate and everyone talks about low/no money down. cause I've noticed that even a 10% down is $5k in my area, plus closing plus extra funds that the expect you to have. So even in the worst neighborhood in town I need $10k in cash. 

 My question is how did everyone fund there first deal(the part that the had to pay for)? 

did you save from your job, borrow from family, side gigs?

As others have mentioned, house hacking is the best way to get started, 3.5% FHA or 5% down conventional. I did not learn about real estate until I had already purchased an expensive family home. I had to save 22k from my W-2 job to buy my first rental property with 25% down. If you can house hack 1 property per year you will accelerate much faster!

Get a specialist to look over it 
Do not take on a fire damaged property as a newbie 

@Dyami Pike- A lot of these questions regarding cost will depend on your specific brokerage. However, yes you will incur some ongoing costs. If not a monthly office fee then usually annually by your brokerage. You could hypothetically open your own brokerage. However even then you have costs you need to pay to be a member and able to view the MLS. Not to mention obtaining your license will cost you at least a couple hundred dollars.

I personally, do not recommend people to get their license unless they plan on being agents. There is more to doing the deal than just getting to keep the commission. You need to keep in mind that you will need to be doing your own paperwork, learn how to negotiate, ideally you would be a subject matter expert in order to do yourself the biggest favor. Are you able to put the time in to learn these things? If so, then absolutely get your license. If not, then again, I do not think that it is the best use of your time. Put your time towards whatever you are a subject matter expert in, so you can make money to invest. Good luck!

@Dyami Pike I first analyzed my existing budget to determine what I was spending my money on...unsurprisingly, the three biggest expenses were my housing, my vehicle, and eating out....so, I moved into a much cheaper rental with housemates, I sold my car, and I stopped eating out, and I saved. I also consulted with a mortgage broker who helped me understand my DTI, and helped me understand what I needed to do to qualify for a mortgage...and then, I did those things....

Then, once I had saved enough, I put 5% down on a house, which I house hacked (I lived in the smallest, least valuable room in the house, and rented out the other rooms). I repeated that process over and over for years, buying another property approximately every 12 months, and taking advantage of the excellent terms of owner-occupant mortgages. Most of the houses I bought were 4-5 br, 3-4 ba, and most had at least one very large master suite that rented at a premium. My general rule of thumb was that, if I was living in the house, I wanted the rest of the rooms to net $400/mo cashflow, and if I wasn't living in the house, I wanted the place to cashflow $800-1000/mo. I was also buying mostly B grade properties in B grade areas that had good appreciation, and a good tenant pool...eventually, I had enough wealth built up that I could gradually begin improving my lifestyle (e.g.; occupying the nicest room in the place I was house hacking, then buying my own house, then buying a nicer house, etc.)...but, I was careful to avoid excess "lifestyle creep" --I didn't allow my increasing expenditures to out-pace my increasing income.

Good luck out there!

House hacked with a 3% down payment. Saved money from my job. Focus on increasing income and decreasing income and investing this difference.