All Forum Posts by: John Kesner

Christopher Walters Welcome to BP!! There is a TON of info on this site so spend some time researching. You can learn everything you need for free!! Good luck!

John Anderson Do you buy your tenants stamps so they can mail you a check?

Maricruz Medina I just use email money transfer. Set up your bank account to accept it and then the tenant sets it up with their bank. Then its a direct transfer from bank to bank. Easy and pretty sure its free.

Samuel Lee Ask your title company about doing at quit claim deed at the court house. I hear they get funny about title insurance (can be an issue when you sell) when you do this outside of a title company. People talk about chain of title. What they mean is chain of title insurance. If the property is transferred without title insurance, the "chain of title" is broken and title insurance can be more expensive. Some properties are even uninsurable (title wise) which makes them very hard to sell. Just something to be aware of. -John

@Curtis H.

When I was at the same point most people told me to hold off on incorporating. It adds lots of fees, taxes become much more complicated and expensive. The banks don't like properties being switched out of your name (if your using bank financing). Title insurance doesn't always follow the transfer into your corp. If you want to refi, there maybe waiting periods once you transfer it back to your name (and pay another transfer tax). 

Overall people told me if your using bank financing just get good insurance and hold the property in your name or trust. Once you grow large and begin to pay off properties, incorporate.

I didn't listen to that advice and I'm somewhat regretting it.

@Maria A A.

Reno has great potential for both cashflow, appreciation and your local. It is a competitive market but I'm sure your other choices are too. Just being local is a good advantage, even if you don't plan on self managing.

Originally posted by @Giordano Rodriguez:

Yes I am aware that it's cutting it close. I'm thinking if I can buy and hold the asset should appreciate. 

This is a commercial property, appreciation comes through increasing the NOI. Is there anywhere you can add value? Could you fight to have the taxes re-assessed and lowered?Sounds like some of the expenses are under estimated by the seller. What about increasing the rents? Could you force rent increases through remodeling? Is the occupancy 100%? Are all the occupants paying? If not, you have leverage to get the price down, then add value by filling the empty units and or replacing non-payers with payers.

Just some things to think about.

@Maggie G.

I know this is off topic from your refi question but,

Getting started with $5K isn't as bad as it sounds. You could find a 2-4 unit property, live in one unit, that opens the door for owner occupied financing, maybe an FHA loan with 3.5% down ($5K/3.5%=$145K). Your in Illinois, there has to be some thing you can get for $145K. If you buy right you might be able to live for free (house hacking) or even make a little each month. Use the extra money (from living for free) and fix up the property over time. Once you have some equity (possibly right from the time of purchase if you paid less than it was worth), you can refi, pull some cash and buy another. You could rent the unit you live in and move into the next property (owner occupied is great for financing).

The other option is a private loan from friend or family. Many folks start that way. You just need to brush up on your deal analyzing skills so you can, a: recognize a deal when you see it and B: Sell your investor (Mom, Uncle, whoever) on the numbers and be convincing enough that they believe you can pull it off.

Your just getting started so have an open mind. It IS possible, many have done it with no money and no credit. You just have to be creative and know your numbers (takes time looking at lots of properties)!

Goodluck!

@Christopher Montoya

I would suggest calling all the banks (start with the local banks/crdit unions) in your area and see what they offer. Tell them what you want and see if you will qualify, just be honest about your financial situation. In my area there are many down payment assistance programs right now, maybe they have those near you too. The likely issue for you is going to DTI (debt to income) ratio. Most banks have a maximum they will lend based on your DTI. They do not want your mortgage payment to take up most of your income.

That's why I suggested a bigger multifamily, they are income producing, unlike a primary 1 unit home that is income consuming. You may be able to find a 4 unit and live in 1 where the income from the other 3 can cover most or all the bills and use a low down payment loan like FHA. That may be a way to get your foot in the door.

Another option is finding an owner willing to finance a property for you, no bank needed.

@Account Closed

Thanks for the ideas, I really the thought of making it personal, adding a family photo is genius!!