All Forum Posts by: Michael Vallee

Hi @Renata McCulloch Absolutely you can do this! The Govt,, Banks and any other Financial Institution want you to own real estate. Every case is different, but especially if someone hasn't made that first leap of faith of ownership, there are LOTS of programs, etc to help make this happen.

The main ingredient is "willingness" and then "action"...

Start with a Mortgage Broker to be prequalified. If that works great, if not, no worries, there are plenty of other ways. I just did a Lease Option Purchase for a family cabin that was not credit or income based..purely willingness and circumstance. 

Let me know your questions and I'd be glad to guide you to some options..

PS. My Mentor is in WA State - He lives on Lake Wa because of this formula! 

Recently, I was perusing through several profiles here on Bigger Pockets and I commend all the interest in Real Estate and getting educated, but at the same time I was AMAZED at how many people are merely "interested" but have yet to actually own any real estate. Let's Remedy That! 

Do you want to know "how" through a simple formula? Then follow along and I will explain how I built two 7 figure plus real estate portfolios - one pre-2008 and one post-2008.

Although I don't see what I've done as anything special, that always seems to be the case "after" we have done something.

I'm a big believer in mentor-ship and my mentor taught me this formula early on about 15 years ago now that has served me well and I envy those of you without any real estate, because this formula

works even better! (I'm speaking to those without any real estate and if single/flexible - even better!)

The easiest form of financing is for Owner Occupied...So, are you ready? It's Simple, so can be easy to miss...

Step 1 - Buy the very smallest unit you can purchase and live in it. If renovations, modernizing, is available even better - also, always looking to purchase the lowest priced property in a community and add value to match the highest property.

SO, this maybe a Studio or small 1 Bedroom 

Buying owner occupied is the "intent" to occupy - (1 year is the full seasoning of this commitment, but I've moved out sooner due to circumstances)

Step 2 - Buy property #2 that is just slightly larger or that is justifiable to the bank as to why you now need to buy this 2nd property - can be another 1bedroom condo..THEN, Rent out the 1st property

and BAM! you should be able to have cash flow plus the place you live in, most importantly you just opened up appreciation, tax benefits and other benefits of having a rental. 

Step 3 - Buy property #3 that is just slightly larger, maybe a 2 bedroom, because now you need an office for your real estate empire! rent out property #2 as well...

Continue this through condos, then small house, larger house...you can supplement non-cash flowing rentals by Short-Term Rentals as well. 

Keep going - I had 10 units at one time and if say you own $1,000,000 in Real Estate and that appreciates at 8%, then you've made $80,000 passively on paper...the banks like you go

up in size of units, but not down. The real estate purchases need to make sense to the bank. 

I did get a bit of haircut during 2008, but have since rebuilt, with more of a focus on Cash Flow and

this has served me very well.  

I'm available to answer any questions on this formula, as I did it twice, so proved

that it works in two different markets at two different times - both Seattle and now in Arizona.

When in doubt - Buy "something" is what my mentor use to say, because the reality is that

if you looked at 10 properties and bought one of them, they all would have benefited you, just

at varying degrees...ultimately he said - buy 20 properties, then use the first 10 to pay off the last 10 you purchased and you will have cash flow the rest of your life and be FREE.

Have multiple holdings? Well, that is a new set of challenges...which I can share ways around as well.

All my best - let me know how I can assist you in achieving your real estate goals! Even if that

is to get started...

Michael E. Vallee

 Connect with me on Linkedin as well

If you are like me, you love Real Estate and are skeptical of anything other than Real Estate for

investments, but there are times, when we are "in cash" between deals or pulling back from market. 

I found a great alternative in a company out of Scottsdale. Watch the overview "how it works" on the homepage.

http://flipstockmarket.com

The power here is mitigating the downturns in the stockmarket, as this technology oversees

your investment and pulls you out of the market prior to any major downturn and rides

the upswings.  I'm currently selling off residental properties to buy an Apt., will use 2 in a 1031 exchange closer to my purchase time, but don't want to receive 0% in the bank.

Anyone find a viable portfolio lender in phoenix az ?

@Bryan O. @Robyn J.

Well, I have done both, so appreciate the differing perspectives on this topic. I suppose it does come down to personal choice more than anything. I do have systems for my out of state properties (WA VRBO and I live in AZ), but do enjoy the convenience of being able to drive by or interact locally on maintenance issues in AZ. 

I found that fact interesting that "absentee owners" are usually on target lists for motivated sellers..where they can be physically, mentally and emotionally detached.

Thank you for your input,

Michael 

Curious about proximity to investment. Ive been lured by the prospectus of investing out of state although it goes against most of what I've read any been counseled to do. The "fact" that nearly every direct mail campaign has "absentee owners" as one of the main sources of finding distressed owners as targets is telling. There's seems to be more inherent potential for mismanagement from a distance. Although I have units in both AZ and WA...I'd be curious to hear advocates for both sides of this topic of proximity to investment. I'm currently looking for 5-30unit apt and am vetting my options. Best, Michael Vallee

Jessica Maleski actually in the market for something close to this depending on price. Can you plz send me more info? Thank you

Are there shorter term vesting periods than 6months for HELOCs? Live in AZ. Purchased primary with decent cash down, remodeled and have comps to support a decent pull of equity into liquidity for REIs. Thank you in advance for any suggestions. Michael Vallee

@Chris Mason Respectfully, not everything is math...there are all sorts of reasons that someone may be in a position to pay a higher rate, these "challenges" (DTI, Credit Score, BK, F, etc) can be overcome by going to person lender who can overlook these and a deal can be "handcrafted", secured against the collateral vs. fitting into some bank's guidelines.

Best,

Michael

@Rich Lopes Hey Rich- I'm exploring establishing a loan with a personal lender that attaches a lien

against my property in exchange for a decent interest rate 6-7%.  Safe and better than $ in the bank.  This is because of the 2nd loan $ going away...I will let you know how it turns out. I don't want to sell to get liquid either.

Best,

Michael