All Forum Posts by: Andrea Hewitt

I began my real estate research and reading over a year ago, but I only began seriously looking at properties to purchase 6 months ago or so. Right before the holidays I went under contract on my first property. If all goes well we will be closing at the end of Feb. Keep your fingers crossed for me. It is a 15 unit apartment building in Texas.
I am keeping a blog about my research and experiences if anyone is interesting in learning more about this type of out of state investing.

I am currently in the middle of my first real estate deal, and it is several states away. (NJ to TX) To find the properties we contacted a realtor in TX that we found on the internet and she put us on an automatic MLS emailing list. When we found properties that looked interesting we would aske her to get more information on it.
We had the inspection done on the property (15-unit apartment complex)We did not go to Texas for it, but the realtor accompanied the inspector, and we received a full report complete with digital photos.
I have also been dealing with the mortgage lenders and lawyers thru phone and email. We actually have no plans for ever going to Texas. We do not even need to be present for the closing. We will just FedEx the documents that need our signatures. The current owner of the property lives in CA and he will not be coming to Texas either.

So, out of state investing can be easily arranged and is probably done more often than most people think.

The rules and costs for setting up an LLC differ in each state, so you may want to do a little research in your state before proceeding.
I just set one up in NJ and it took only a few minutes on the internet and cost a little more than $200.
Since the LLC has no history, we are purchasing the property as individuals and then transfering it as an asset to the LLC immediately after closing, or at the closing. The mortgage will remain in our names and not the LLC. The banks will have it no other way. It is too risky for them to have a mortgage with an LLC over an individual.
It sounds like a good idea to have a seperate LLC for each property, but check with your accountant first because it costs extra for each seperate entity that needs to file taxes.

Basically, you need to check with your state and your CPA before solely following advice found in forums.

I recently heard a podcast describing how to do it, and I was thinking of looking into it in more detail this week.
Basically when the seller of a property loans the buyer money to purchase the property, as is often done to help the buyer with the down payment or closing costs. Those loans are registered with the county. Since these loans are a smaller amount, $10-$50,000 they are more easily affordable than the first mortgages that the banks sell.
To purcahse these loans you basically need to contact the name registered on the loan and offer to buy the loan from them. It is best to purchase it for less than the current amount due.
The pod cast suggested writing to several people becasue not all of them will want to sell, but chances are that someone out there would rather have the money now than waiti to collect it over the next 5 or more years.
Once they agree to sell, the lawyers get involved and then you own that mortgage and the debt is now paid to you with interest.

I am sure that there is a way to purcahse the loans from banks also, but I am not sure how unless you just call them up and ask.

I believe that if you are considering real estate investing than you are on the right track. If this contractor that you know wants to help you out then I suggest that you hear what he has to say and find out how he can help you out. If at any point it is not what you are interested in then you can always politely back out, or try to get his help in a separate way.

The amount of money that you have saved should not limit you. If you have an idea of what type of real estate investing that you want to do, then find an investor to help you out with that idea. Someone from you family, community, local investment clubs, or even the contractor might be willing to fun your investment ideas.

Keep in mind that real estate has many option. You can buy foreclosures, pre-forclosures, residential, commercial, paper and probably a million other things. Keep your eyes open to your options and something will appear.

Good Luck!!

Before you can make a decision on what type of action or investment you should make, you need to consider your goals. Is your goal to create a sum of money quickly, or to put in place a system to generate steady income over time? What level of risk are you comfortable with?
The answer to those questions will determine which option is best for you.

Do not fear.
If you are new to investing or not, if the whole world knows it or not, have confidence it what you are doing and that is what people will respect. If you do not know something just ask. Everyone has to start out somewhere it is nothing to hide.
At the same time, if you feel that someone is trying to take advantage of your because you are new, there is nothing stopping you from just walking away.

I think that there are lots of options for what you can do.
Look for investments that are out of your area, in other states across the country. Try looking at commercial properties and not just residential. Instead of buying the actual properties, look into buying the paper mortgages.
I am pretty new to real estate investing myself, but I am quickly learning that there are multiple ways to invest in real estate regardless of the current market where you live.