All Forum Posts by: Emily Valenzuela

Hi Jason, 

Try using the Bigger Pockets Rental Property Calculator to run the numbers and determine if the numbers make sense for you. In my experience, when an investor acquires a property that is fully leveraged such as this one the numbers often times do not make sense (at least not for the first couple of years). Based on the limited information provided I would venture to guess that would be the same in this situation. 

However, that does not mean that with a little bit of creativity and the right resources that it would not make a good investment. For example if AirBNB or corporate rentals are an option in your area, and your sister is turning the home over to you fully furnished, that might be a way to spin a higher profit. 

Something else to consider - If you run your numbers through the calculator and you break even or only make about $100 per month (or less) of cash flow, and you are able to cover expenses during vacancies or for repairs, then it may turn out to be a good long term investment. You would have gotten into it for 0 down, your tenants pay most (hopefully all) of the cost to hold it. Over time the mortgage will get paid down, and generally speaking the value of the home will go up. If you go this route be aware that it could easily take 7 - 10 years before you are able to see a significant return on this investment, and it can be risky.   

In addition to the ways already mentioned, another great way to find Wholesalers is to look for Bandit Signs in your areas. They are not always legal but that doesn't usually stop wholesalers from using them. They are those cardboard signs on the side of the road that say they buy homes in any condition. You may also see similar signs mentioning a home for sale. Often, there is no home for sale. Wholesalers just use these signs to fish for investors looking for off-market deals. 

All that being said, a better option might be to utilize the resources of your real estate partner. With the tools at their fingertips, you can create marketing lists of: out-of-state homeowners, high equity home owners, and homes in pre-foreclosure. Then market to them directly via cold calling, mail marketing, or door knocking (depending on your strengths and marketing budget). You and your partner will have two solutions to offer each prospect - either your partner lists their home on the market for top dollar, or you offer to purchase their home with terms that work for the home owner and save them the hassle. 

Hey Melodie, 

Welcome! You have come to the right place to network and learn about real estate. Here is some advice to help you get started. 

1)Learn about building and growing credit now so you can set yourself up for success when the time comes for you to start your real estate portfolio. 

2) Put any extra money you have in places it can grow such as stocks and real estate notes. I personally use Stash (for stocks) and Groundfloor (for real estate notes) but there are many great options out there. I like companies like this because you do not need very much to get started. I know that this one might be hard while you are in college, but even if you only start with $20 a month it is a good habit to develop early on. 

3) Look for local meet-ups that offer learning opportunities in addition to networking. Title companies (especially investor-friendly title companies) can be a great resource for these types of events as they are often the sponsors and their events are usually free. 

4) University of YouTube has so many great resources to help you learn various strategies for free on your spare time. When you find a strategy or information that interests you, make sure you seek more content from multiple creators to help you gain multiple perspectives. 

5) Keep doing what you're doing! It sounds like you have the right attitude and mindset. Take those two things with you to the networking events and platforms such as this and there is no limit to your potential.  

Hey Jason, 

Propstram is a great platform to use. You can find, analyze, and market to homeowners all from this one platform. They even have a "High Equity" button so that you easily drill into those homes if that is what you would like to focus on. 

However, once your license is re-activated you should have access to tools that help you access the data though your broker or local association. Once you are able to create your own mailing lists as an agent it might be more economical to use one of the many marketing companies that target agents to handle your direct mail campaign. 

Hey Daniel, 

Welcome, and congratulations on getting off to a strong start. If you have enough money to put 20-30% down, a decent credit score, and steady income, I see no reason why you can't qualify for a conventional loan as they tend to have the best rates and will not require an LLC to qualify.

I recommend playing with the Bigger Pockets Rent Estimator Calculator while you are considering your various finance options (and offer amount) to make sure that whatever financing option you go with the property will still cash flow for you after all expenses are covered. If not, walk away and consider working with an agent who is experienced at working with investors to help you grow your portfolio. Either way, best of luck to you my friend!

(reposted in classified per Bigger Pocket Rules) 

Hello Bigger Pockets Family!

I am actively seeking a partner with at least $50k in liquid funds that is interested in working with a partner to invest in real estate. I am willing and able to work with both experienced investors (that I can continue to learn and grow from) and inexperienced investors that are interested in learning from me and through our shared experience.

Here is what I bring to the table: I have a background as a licensed real estate agent and loan originator, knowledge about a variety of financing options and how to analyze a deal, tools and equipment that allow me to analyze properties and streamline the renovation process. I am hard working and passionate about real estate. I am willing to do all of the work and share my homework with a partner that has at least $50k in cash that is interested in learning. I would also be willing to do all of the work, share my homework, and take guidance from a more experienced investor with cash so that I can continue to learn and grow.

I currently reside in a city located between Austin and Killeen Texas and would prefer to focus on these markets or areas within a 2 hour drive from where I live for now. If this sounds like something you are interested in please reach out. I would love the opportunity to connect and grow with a partner(s)!

Hello Javonnis, 

Welcome! I can completely relate to your entreprenurial spirit and motivation to get going with only a small bit of cash on hand. From an investor perspective I would not get discouraged by reporting a low income on your tax return as that is what most investors aim to do. To your point this is not good for traditional lending which looks at your DTI, however, now that you are here learning to think like an investor you are coming accross other creative finance options which do not look at your DTI as a factor.

In regards to starting with a little over $10k: In my experience, unless you find a private money lender, it is very difficult to find a deal that you can get into for less than $15k. Even than I would caution that just because you can doesn't mean you should. That being said I would encourage the following:

1) If you haven't already put your $10k somewhere it can grow while you continue to save. There are plenty of options out there. I personally like Groundfloor as they allow you to invest in real estate notes with as little as $10. However, there are many great options out there and it is always safer to diversify. As my grandfather used to say "Don't put all your eggs in one basket".

2) Since you mentioned "setting yourself up financially"- that could mean a few different things. If you haven't already I invite you to research how to grow your credit - particularly corporate credit. This will allow you greater access to capital then savings alone.

3) Just keep doing what you are doing! It takes time, and you are already off to a great start - having the right mindset and asking the right questions in the right spaces. 

Best of luck to you my friend!

@Michael Zagorsky

In regards to your question is there anything I'm not thinking about: Have you considered putting yourself in a position to be the bank? There would be less work, less risk (if the money you lend is secured by real estate), and potentially higher returns. You can lend directly to people you already know and trust that are already active in the real estate space, or work with a company such as Fundrise or Groundfloor. You could also look into investing in real estate notes rather than making the loans directly your self. Admitedly, purchasing notes is not something that I have any experience in. However, I do know there are companies out there that can help you with this and it is an arena that people with more cash than I have yet to acquire tend to play in. 

Hey Erik, 

Congrats on your new job. It sound like you have a lot going on at the moment. I can understand why you do not want to take on any huge projects. With that in mind, I would not recommend a getting a home that you will need to fix up while you are living in it. That can be a whole extra layer of stress that it does not sound like you want/need at the moment. 

If the numbers do not make sense to keep your first home as a rental I would recommend selling it to purchase in an area where the numbers do make sense. Perhaps consider purchasing your next property from a turnkey company. Generally speaking these companies have already done their homework on rental markets, purchased something that makes sense from a buy and hold perspective, and have already put a tenant in place for you. This will drastically simplify the process for you. Of course you still want to keep your Realtor on board so they can help with your due diligence and running your numbers. 

Depending on a variety of factors, and with the right lender you could possibly pull out a little bit of cash however I would ask myself it is worth the cost. You will be paying on the cash you pulled out and paying for the next loan you will need to do the deal. That does not leave much room for profitability. 

Another option might be to sell this home so you take out all of the profits and have more cash for your next project. If you do one or two more just like this then you will have enough cash to work with for growing your portfolio.