All Forum Posts by: Greg Alway

I am looking for more in person. Virtual certainly has its place but starting out being around others is better.

I would like to invest in commercial real estate but since I cannot be there all the time do to my current work, I was thinking residential to start.

Hi BP community.

I passed the Washington State Realtors license exam and I am looking for a place to hang my sign somewhere near where I live here in Lake Stevens.

My current work schedule is 12 hour days Wednesday thru Friday, between that and getting the kids off to school/distance learning I don't have much time on those days.  That leaves the other 3-4 days open to hustle and earn extra income to invest.

If you have any recommendations on places or things to do before I contact those places.  Please let me know.

Thank you.

@James Nidiffer

Since the bank has the money no matter how you look at it, I don't think you can cut them out.

If she borrows money through a HELOC then she doesn't count that money as income to be taxed. If she gives it to your LLC then there may be tax requirements on the LLCs part if she is NOT a partner. I'm assuming that the LLC is NOT an S or C Corp. Ultimately a CPA should weigh in. Best of luck.

That looks beautiful! Excellent job.

Great job! At least now you know what you can do and what you want to subcontract out.

@Jordon Metts

First it could be a scam. So before you pay them any money, go to your counties records to see who currently is listed as the Notes owner. If it is NOT the people who are calling your grandmother then contact the people who are currently listed to verify if they are the current owners. This can be done relatively quickly.

Until you KNOW for sure who owns the loan do NOT directly pay any of these people. Push everything else out of your mind and just focus on this task.

Either the people are correct owners or it is just a scam. But you need to find out first.

That's awesome! Way to go.

@Kayla Oliver-Pratt

It's a difficult time all around so please keep in mind that the tenant may be suffering too.

Recommendations:

Develop your game plan.

How to do that.

Emotionally come to terms that this property may no longer be financially viable to your goals and be foreclosed on by the bank. once you accept this fact you will be in a much better state of mind. Does this suck....absolutely, but it needs to happen and please remember that your goals are much much bigger than this one property.

Now get all your paperwork in order. Get anything that has the tenants signature on it regarding the property.

Any future paperwork should be sent to the tenant by certified mail. That way they have to sign and cannot refute that they didn't receive it.

Send a letter that in a nice tone says that there has been no payment and during these troubling times that you are here to work through their unique situation.

Hopefully you have photos of inside the property when you visited to document the damage.

Get any paperwork you have with the attorney. Get them to send you a letter on their letterhead that has there recommendations on proceeding as well as a current timeline of how long it will take for the courts. Make sure they give the worst case longest timeline.

With all of this information you now need to contact the bank or whoever is holding the Note on the property to talk with them about what is going on and next steps.

@Allen Lopez

You should answer a few other questions first. Since this is your property manager, now turned middleman/client. If things go badly do you feel comfortable with your PM dealing with the rest of your properties fairly? If not, then tell them that you cannot have them as a manager and client and that you wish to continue as investor and manager relationship.

If you feel comfortable about the relationship, but not about the clients who will be in your property then tell your PM "Thank you for bringing this opportunity to me however I am sorry that I cannot go forward with this as this is something new to me. If you can put me in contact with other investors in the community that are also doing this then I might feel more at ease."

At this point your PM will do the work to put you into contact with other investors so you can ask them questions. Make sure you ask them about contracts; like who is responsible if one of the tenants has some difficulties and starts breaking all the windows. It better be the organization.

You can also ask the investor about who is paying the rent like the tenants, PM, or the organization. Hopefully the organization.

@Stephen Ball

You don't appear to be missing anything. Eventually all investors hit that debt to income (DTI) ratio issue and that particular bank will no longer lend to them.

At that point you will need to call around to find another bank, credit union, savings and loan, etc... that doesn't mind a higher DTI. You may have to call a lot of them.

Other possibilities are available to you instead of just waiting. Let's say you purchased 3 Single Family homes (ie.3 doors) If you did it right and Refinanced with 30% equity in each property and got your initial money back, then you could 1031 exchange all 3 into a 8 unit building (ie.8 doors).

You are now into commercial loans which is a different animal than residential loans.

Talk with homeowners about Seller Financing. This strays away from BRRRR but the seller doesn't care about Debt to Income ratio.