All Forum Posts by: Shawn Holsapple

I agree with Rob, you must protect you assets! In this sue-happy society it's mandatory.
I'm a Rich Dad/Poor Dad believer & they discuss in detail how to set this up to maximize your protection in a couple of the Rich Dad ed books. Even if you don't like Rich Dad, you should definitely at the least setup a LLC to buy/sell your properties through.

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Originally posted by Matt T.:

There's no shortage of REOs in my area (midwest). Nobody shows up to the Sheriff's sales because the properties are selling much lower once they are listed on the MLS. We do have an issue with a few REO Agents listing properties at unreasonably high prices. The price seems to creep down 5k every 30 days until it gets into the appropriate range and then it's quickly snatched up. I just picked up a 2/1 that was on the market for 8 months. I've only been in a multiple bid / highest and best situation once this year. My offer was accepted and it was still 15% under list price.

No shortage here! The city of Indianapolis is currently setting on over 9,000 homes & releases a few hundred per quarter via public auction.

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My personal experience is to have a great team on the ground in the market you are wanting to work in. One of these team members is a local Realtor/broker that must be an investor as well - they will be able to accurately determine a value based on info like the MLS but also real data from the field.
I've found out [the hard way] that it's worth paying the professionals [realtors, attorney's, CPA, etc.] to do their job - they will always pay for themselves.

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Welcome, David!
I just back to Indy after being in Calgary for five years.

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Yes, looking else where is vital right now. As mentioned earlier, the MidWest has been an overlooked opportunity. I regularly buy or help others buy 4-6 units in Indianapolis for under $125k full purchase price! With gross rents well over $2k.
Couple that with creative financing, joint ventures or good leverage - it's hard to beat.
I drank the Rich Dad Kool Aid several years ago & wish I had acted sooner - as most people do. I found that first "big" purchase to relative easy and not near as scary as I had imagined. At the time, I lived in Calgary, AB Canada & bought my first rental here in Indy. So long distance investing is very possible with a good team on the ground.
I've also found that, for me, paying a property manager is well worth the 9%-10%. This allows me to focus on the things that I'm good and while not worry about sinks & toilets.
In the end a strong "Power Team" is key to make any opportunity a Great Opportunity. Once you have the team in place, the rest is "easy".
Good Luck and welcome to BP!

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I just moved back to the mid-west from Western Canada [Similiar market to west coast US].
I couldn't beleive the ROI that can be generated here. I've looked in other parts of the State but can't come close to Indy.
Yes, you can buy lot's of creative financed doors for $35k!
I live here & love this stuff.

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Anytime I can secure easy funding for more than I can earn - its a great deal!
I do this all the time. When I get those CC offers in the mail that offer 0% transfer for XX months I write myself the check & use it. Note: I always leave enough in the savings account from the CC loan to cover at least 6 months of the payments [make the payments with the borrowed funds, if need be]
In your case, 7% is ok. I can easily turn that into 20%+, so I would definatly jump on that. Just be strict & dillegent with the funds!
Good luck.

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Originally posted by Kevin Kaczmarek:

Hi Adam,

Great concept and great question. I have bought several properties in the last six months using this exact method and I can tell you there is no science formula to it. It is all in negotiation between the seller and you.

I would suggest brushing up on future and present value calculations as you start making offers, only because it will help you identify what your offer is in relation to what a cash offer would be.

Couple rules of thumb I follow.

#1.) I do not pay retail just because I am buying on terms.
#2.) I always say "until paid in full" as it relates to the term. I do not do balloons on my purchase.
#3.) I tend to put $1-$2K down
#4.) I negotiate an interest rate close to current market rates with no adjustments
#5.) The deal has to positively cash flow after debt service, taxes, insurance and some escrow.
I have found that there are several properties in my area that fit this criteria but it takes much more work to find them. When you do, it is like you said, a near infinite return.

Hope that helps.

Kevin,
Do you run into much resistance when requiring "until paid in full". I find most sellers want out in 3-5 years and won't budge.

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All Forum Posts by: Shawn Holsapple

Shawn Holsapple has started 10 posts and replied 1200 times.

Post: H&H Blitz in your neighborhood?

Post: Hello from sunny Phoenix!

Post: What are the risks using personal name for flip instead of business name?

Post: Where are all the deals?

Post: Getting access to the MLS.

Post: New from Canada!

Post: Help establish a newbie's strategy out of the gate? (100k to start with)

Post: Leaving NYC - Looking for a good destination

Post: getting money from your credit card to invest, is that a good idea?

Post: Favorable terms when buying a Seller Financed home as rental