All Forum Posts by: Fouad Hayek

Nice!

Hi AK,

I think this is similar to the flywheel principal... takes alot of energy to get it going at first, but then its off and hard to stop. 

Investing works the same way.

Best of Luck,

Fuad

One of the few investment options that can be leveraged!

Hi Douglas,

It is so awesome to hear you are getting into the real estate game. An STR is very similar to normal rentals. I highly recommend you set yourself up with a good team. A good lender (if you need one), a great realtor (to help you find the deals), an awesome property manager, and contractor.

Be specific on what you are trying to do, this way the realtor can filter out the bad deals and find the ones best suited for you. It is then that you have to network in that market to get a good property manager. The income from STRs is great, but they tend to be a bear to manage, having a good property management company in place to help you along is the cornerstone of a successful STR business.

In addition to finding a good team, I recommend you educate yourself best you can about the market you would like to invest in. It is one thing to have a good realtor, but a well rounded understanding of the neighborhoods, streets, and points of interest to potential renters is key to making sure you have a desirable property. 

I hope this helps!

Good Luck!!

Fuad

Hi Victor,

Earnest monies are put in place to protect the seller if you back out because you changed your mind. I would look closely at the terms of the purchase agreement specifically the conditions for the forfeiture of earnest money. I would also discuss this with your agent if you are using one. Obviously the seller would like compensated for the risk involved in waiting for you to get approved for a loan. Since you are technically approved, but the terms of the loan change due to appraisal it enters that grey area where the seller can refuse to release the EM back to you. 

I would have an open line of communication with them and see what compromise you can arrange. Every purchase agreement has its rules and conditions on how earnest monies are dealt. 

Everything is negotiable my friend!

Best of Luck!

Fuad

Hi John,

Seems like you need a different type of policy that your broker does not do. I would initially ask them if they recommend any commercial insurance brokers that can help you out. If not, a quick google search in your area for commercial insurance companies near you could help.

Best of luck!

Fuad

Hi Belliny,

FSBO properties are typically an AS-IS condition type of deal as I am sure you know. The biggest question is the one you mentioned.. the motive to sell obviously. These sellers are typically opposed to having a realtor on either side of the transaction, so I would recommend you do all your homework on the bakc end by looking the property up on the county website to search for liens (yes always do a lien search) when purchasing a property especially FSBO.

I would ask about the neighborhood, who lived here before and for how long. Any easements on the property? 

Main things mechanically and physically like roof age, furnace age and HWT age as well. I would also look under every sink and check for any leaks that you can see visually. 

Those are my two cents! I am sure there are much more but these are the main ones.

Best of Luck!!

Fuad

Hi Fabian,

I love the hustle, you are an inspiration to your generation. I guarantee you something that all investors have in common is that they wished they started earlier. Regardless of your age, the income question that all lenders ask poses a challenge to all who seek a loan to buy or refi a property. I encourage you to network with hard money lenders, potential silent partners (as you have already) into placing the deals together. 

Lenders have this firewall in place to protect themselves and make sure their borrowers have steady income. Since you are an entrepreneur and self employed, make sure to pay yourself a wage, and document that on your return. 2 years is not that long of a time. Before you hit that threshold, owner financing can also be a potential option. Buying a house with low or no money down is possible, and seems like you are on your way to fully develop those skills. Take it from me, it gets easier the longer you are in the game. Make sure you talk to as many people as you can, I am sure there are many individuals out there who would be able to provide you with alternative financing solutions in your area (Credit Unions, other Investors, etc).

Best of luck!!

Fuad

Hi Jose,

No need to panic here. A 1099 is a tax form that the title company is by law required to give you for tax purposes. It essentially has your LLC name, address, and the amount they paid you over the year. You need this form for when you do to file the return for the LLC.

Hope this clears it up!

Congrats on the deal!!

Hi Jason,

This maybe the hardest part of the core partners you need to be a house flipper or any type of REI, especially in this COVID climate. One saying that I heard multiple times on the Bigger Pockets Podcast is; "Where do you find a drunk? Go to the bar!" You may get several contractors that will not return your call, or answer you but never show up, or show up late. Or even be available but not good at the trades you need them to be good at. You need to call several and get a good feel for them and have them willing to invest the time in your eventual partnership that can lead to a mutually beneficial relationship. Once you start thinking this way, you can vet and hire on someone that help you get started on flipping a home in CO.

So now let me ask you: "Where do you find a contractor?"

Good Luck!!