All Forum Posts by: Joey Bresette

Sorry in advance for any weird formatting, this is my first post. Tried to get all my thoughts down but really would just appreciate anyone who's willing to give advice based on my situation.

I'm a Junior at Santa Clara University who has been interested in real estate investing for the past three years. I have my salesperson license in Massachusetts and California. My goal is to build up a portfolio of residential or small multi-family properties that can eventually become my main focus / "job".

Up until this point I've also headed down the corporate finance path for a variety of reasons. I interned at a fintech company after my Freshman year, a private equity firm this past summer, and next summer I'm supposed to do an internship in investment banking. 

I feel like this path has taken me further and further from my ultimate goal, though. I had been telling myself that I could always do real estate on the side but after seeing first-hand what life is like for younger analysts and associates in such time-intensive careers, that doesn't seem like much of an option.

So, I've been thinking a lot about what I want to pivot to and wanted to see what everyone's advice on this forum was. Here's a short list of what I've been thinking of with the goal of creating a mutually beneficial career path for my ultimate real estate investing journey:
 

 - Corporate Finance Real Estate Role (Working at a bigger brokerage such as CBRE, JLL, etc.), investing in Real Estate as I go and will likely have more time to do so than in the path I've been on

 - Commercial Real Estate Agent (at a larger brokerage, ideally in the multifamily space) investing in Real Estate as I go, with the same amount of time to do so as above, but with the added benefit of actually working in the market I want to eventually invest in

- Working for a small-scale developer or construction company (ideally in the market that I'd want to invest in) I could be investing in real estate as I go and would be gaining experience

- Residential Real Estate Agent (at a regional brokerage in a market I'd want to invest in) investing in Real Estate as I go, with more flexibility and time to do so than above, and with the extra benefit of working in the market I want to start out investing in

- Find someone who is investing in a similar way I want to eventually invest and work for them. This would allow me to learn what I need to and then eventually go out on my own

I've also been interested in architecture since I became interested in real estate. This would be a major pivot considering I'd probably have to go to some sort of graduate program, but I guess I'm considering this as well.

In the meantime, I've been trying to get involved in the student-housing market at SCU and the residential markets surrounding the campus. Planning on cold-calling as much as I can with the hopes of finding prospective sellers I can refer to a connection of mine for a referral fee. Ideally, this will develop insight into those markets and lead to something natural.

Anyways, I'd appreciate any general advice just based on the post. Additionally, if anyone knows any investors in the Bay Area I could reach out to, or small to medium sized developers/construction companies, definitely let me know.

@Andrew Postell I think I see where you're coming from. However, I was under the impression that ARMs adust to the prevailing market index PLUS a margin (i.e. the index is 5% and the margin is 2% - your new adjusted rate is 7%). In your example, it seems you're saying that the adjusted rate is almost always lower than the index, which to me would appear more advantageous than a fixed-rate loan at the market index rate. Thus, I would then ask why everyone doesn't choose an ARM?

I think I'm getting something mixed up though. Is the market rate that you are referring to in your answer the market rate for fixed-rate loans? Are fixed-rate loans normally below the market index rate?

Thanks for the help!!!

Hey Guys,

I'm currently getting my real estate license in California for when I go to school out there. I'm in the last section of the pre-licensure course going over adjustable-rate mortgages (ARM). In the explanation of what an ARM is and why someone might prefer it, the course mentions that hybrid ARMs often have an initial fixed period of the loan in which the interest rate is usually lower than what you might get with a standard fixed-rate mortgage.

I was wondering if anyone had any experience or thoughts on using this initial fixed period to obtain a low-interest rate and then refinancing to a fixed-rate mortgage before the ARM is adjusted. A hypothetical comparison for example:

Say a normal fixed-rate mortgage could be obtained at 5%

Now compare this to an ARM where you could obtain a 4% interest rate for an initial period of 5-10 years. Then, before the rate adjusts to the index plus the margin at the end of the initial period, you refinance to a fixed-rate mortgage of 5%. Wouldn't you have essentially saved a substantial amount in interest during that initial period?

My initial thoughts regarding this type of mortgage structuring are that it would be more beneficial when rates are high because there's a better chance that at the end of the initial period you could refinance into an interest rate that is either the same or lower than what you would've obtained. For example, now, with interest rates as low as they are it might not be a good choice because when you go to refinance at the end of the initial period you might have a hard time finding as low of a rate as you could today, and thus you would've been better off obtaining a fixed-rate mortgage at today's rates.

So, I feel like I don't hear about this type of structuring a lot, and I'm wondering if I'm missing some things that I would only know if I had experience doing it (i.e. how hard it is to refi out of the ARM, or realistic rates during the initial period), or that I'm just not hearing about it now because it's not as appealing giving interest rates today. Let me know what you guys think! I'm sure there are many other angles that people could look at this topic.

Hey Guys,

I'm currently getting my real estate license in California for when I go to school out there. I'm in the last section of the pre-licensure course going over adjustable-rate mortgages (ARM). In the explanation of what an ARM is and why someone might prefer it, the course mentions that hybrid ARMs often have an initial fixed period of the loan in which the interest rate is usually lower than what you might get with a standard fixed-rate mortgage.

I was wondering if anyone had any experience or thoughts on using this initial fixed period to obtain a low-interest rate and then refinancing to a fixed-rate mortgage before the ARM is adjusted. A hypothetical comparison for example:

Say a normal fixed-rate mortgage could be obtained at 5%

Now compare this to an ARM where you could obtain a 4% interest rate for an initial period of 5-10 years. Then, before the rate adjusts to the index plus the margin at the end of the initial period, you refinance to a fixed-rate mortgage of 5%. Wouldn't you have essentially saved a substantial amount in interest during that initial period?

My initial thoughts regarding this type of mortgage structuring are that it would be more beneficial when rates are high because there's a better chance that at the end of the initial period you could refinance into an interest rate that is either the same or lower than what you would've obtained. For example, now, with interest rates as low as they are it might not be a good choice because when you go to refinance at the end of the initial period you might have a hard time finding as low of a rate as you could today, and thus you would've been better off obtaining a fixed-rate mortgage at today's rates.

So, I feel like I don't hear about this type of structuring a lot, and I'm wondering if I'm missing some things that I would only know if I had experience doing it (i.e. how hard it is to refi out of the ARM, or realistic rates during the initial period), or that I'm just not hearing about it now because it's not as appealing giving interest rates today. Let me know what you guys think! I'm sure there are many other angles that people could look at this topic.