All Forum Posts by: Hannah Howe

I don't have too much personal experience, but I think having a Realtor that is investor friendly would be a huge advantage! Even better if they have some skin in the game themselves. I think also having patience with how the market is because there are going to be some deals that you really want that just don't work out. Just my two cents from what I've learned from my readings and listening to podcasts.

@Hannah Howe sounds good. All of those are good books to read. We also have lots of real estate investor groups that meet here locally. Might be good to get plugged in to one or two. We are constantly talking about how to acquire properties and the BRRRR method.

Oh, and also, there are renovation loans from "traditional" style lenders.  So a 30 year, fixed rate loan, that rolls in your rehab into it.  The problem is still that a down payment is required.  So if I'm needing 15% down...that's a lot for anyone to have.

We usually work with "non-traditional" loans to acquire the properties (that's the BUY step of the BRRRR). Those loans are usually short term loans (usually 6-12 months) that can even allow us to have NO down payment if we buy the property at the right price. Hard Money Loans (HML) are what most are called but there are others too.

You are on the right track with all of your questions.  Keep digging and keep learning!  Thanks!

 They will (at least many will) but they will escrow the rehab portion of the loan and only release it as you provide invoices and proof the work was done.

No, no bank will lend at appraised value upon purchase. They will only lend on your costs up front and usually for at least 6 months after purchasing. They also won't ever lend more because of it's cash flow. They might restrict how much they lend to you if the property doesn't cash flow well enough. But the appraised value is what they will lend on based on comps (houses) or cap rate (apartments). But again, up front they will only lend based on your purchase price/cost to rehab (unless the appraisal is lower or DSCR isn't enough, in which case they would lend even less).

@Hannah Howe thanks for posting! Always great to hear from a fellow Texan. Unfortunately, conventional loans don't work like that. They always need a down payment....which is why we don't use them to "acquire" properties usually. We also don't "usually" acquire properties from the MLS either. Have you looked into the BRRRR method at all? Ever heard of that?

@Hannah Howe

No

1.   Build relationships on a daily basis...you'll need them. You'll find that with the right relationships you'll be able to scale much faster and with fewer mistakes. 

2.   Understand early on that you should believe none of what you hear and only half of what you see. BP is a great resource, but like any site, there is just as much bad information delivered here as there is sound advice. ALWAYS do your own research before taking anyone's advice as face value. 

3.   Determine what your investment goal and strategy will be.

4.   Spend 3 hours per day (or night) learning a specific investing topic that will be relevant to your investment goal and strategy.

5.   Add value before asking for value from another investor. Seasoned, active investors seldom have time to have someone "pick their brain" for a $10 hamburger. If they take the time, you must have made a good impression initially. Don't destroy that impression by taking potential deals to another investor who gave you nothing when you were starting.

6.   Whatever state you you intend to invest in, learn their laws regarding contracts, landlord/tenant laws, etc. Jumping in with both feet before you have a basic level of knowledge (or have a relationship with someone who does) is the worst advice given by gurus.