All Forum Posts by: John Mathew

Absolutely, finding local wholesalers for multifamily units in the Fort Worth/Dallas, TX area typically involves a combination of strategies, with networking playing a significant role. Here's how you can go about it:

1. Networking Events: Attending local real estate networking events, meetups, and seminars is an excellent way to connect with wholesalers and other professionals in the industry. Look for events specific to multifamily investing in the Fort Worth/Dallas area.

2. Real Estate Clubs: Joining real estate clubs or associations in your area can provide you with access to a network of investors, including wholesalers. These clubs often host regular meetings and events where you can meet potential partners.

3. Online Platforms: Explore online platforms like BiggerPockets, LinkedIn, and local real estate forums. These platforms often have sections or groups dedicated to real estate deals and networking, where wholesalers might advertise their available properties.

4. Local Real Estate Meetup Websites: Look for websites that list local real estate meetups and events. Websites like Meetup.com often have groups focused on real estate investing that could lead you to wholesalers in the area.

5. Real Estate Agents: Sometimes, real estate agents are well-connected and may know of wholesalers or have off-market multifamily properties in their network.

6. Direct Outreach: You can also directly reach out to other multifamily investors in the area. They might have insights on wholesalers or even be interested in forming partnerships.

7. Property Auctions: Attend property auctions, both online and in-person, where you might come across distressed properties that wholesalers are looking to move quickly.

8. Word of Mouth: Let your local network know that you're interested in multifamily investments. Sometimes, referrals from fellow investors can lead you to reliable wholesalers.

When interacting with wholesalers or other investors, it's important to build relationships and demonstrate your seriousness as an investor. Also, ensure that you do your due diligence on any deals presented to you by wholesalers, as not all deals might be suitable for your investment goals.

Remember that finding reliable and reputable wholesalers takes time, so be patient and persistent in your search. Building a strong network of contacts in the local real estate community will undoubtedly be beneficial in the long run.

Let me know if you have some questions.

John Mathew

Hey there!

Given the scenario you've outlined, here's a suggested approach for the owner finance deal:

1. Determine Assumability: As the first step, confirm with the seller whether the existing ARM is assumable. This can significantly impact your approach and negotiation strategy.

2. Assess Financing Options: If the ARM is assumable, evaluate the terms of the ARM to see if they're favorable. If not, explore whether you have the option to refinance or restructure the financing to align better with your goals.

3. Calculate the Numbers: Since the market rent is estimated between $1800-2200 and the property needs only light cosmetic upgrades, you can use the lower end of the rent range for a conservative estimate. Calculate your monthly cash flow by subtracting expenses (including mortgage payment if assumable, property management, insurance, taxes, repairs, and any other applicable costs) from the expected rent.

4. Craft Your Offer: Given the desired purchase price of $224.5k and the seller's request for a 15% down payment, you could structure your offer as follows:

   - Purchase Price: $224,500
   - Down Payment: 15% ($33,675)
   - Loan Amount: $190,825 (Assuming a $90k loan balance if assumable)
   - Interest Rate: Use prevailing market rates for financing negotiations.
   - Term: Negotiate the length of the loan term, whether it's 15, 20, or 30 years.

5. Negotiation: If the ARM is not assumable or the terms aren't favorable, negotiate with the seller for alternative financing arrangements. This might involve discussing a potential seller financing arrangement where the seller acts as the lender, providing you with a loan directly. Negotiate interest rates, repayment terms, and any contingencies.

6. Present Benefits: When discussing your offer, highlight the benefits for the seller. Explain that they can walk away from self-managing, receive a regular income stream, and potentially defer capital gains taxes through installment sales (consult a tax professional for advice).

7. Flexibility: Be open to negotiation and flexible in your approach. It's important to create a win-win situation where both parties benefit.

Remember, every deal is unique, and the best approach depends on your financial goals, the property's condition, the local market, and the seller's motivations. It's recommended to consult with a real estate attorney and financial advisor to ensure that the deal is legally sound and aligns with your overall investment strategy.

John Mathew

Hey there. Good morning!

It's a great question you're bringing up. The idea of wholesalers getting a real estate license to enhance their legitimacy is definitely a topic of discussion in the investing world.

You're right that in some places, including Georgia, to get a real estate license, you typically need to be sponsored by a real estate agency. This sponsorship is usually based on the expectation that you'll work for that agency, which does sound a bit like taking on another job.

However, the decision to get a real estate license as a wholesaler depends on your specific goals and circumstances. Getting a license might indeed provide more credibility and open up certain opportunities, but it could also mean more responsibilities and commitments.

Some wholesalers choose not to get a license and instead focus on building their reputation through transparent and ethical practices. It's essential to weigh the pros and cons and decide what aligns better with your long-term plans.

Remember, both paths have their merits. If you're leaning toward getting a license, researching different agencies and understanding their expectations could be a good starting point.

Best of luck with your decision and happy investing! If you have any more questions, feel free to ask.

John Mathew

Hey, let me try helping you with this. 

Investing in a condo complex is a bit different from a regular apartment building. While both involve multiple units, there are some key distinctions to keep in mind.

In a condo complex, each unit is typically owned by an individual, whereas in an apartment building, you'd be renting out the units to tenants. This means that in a condo complex, you're dealing with owners who have a stake in the property and might have more say in certain decisions.

When buying a 10-unit condo complex, you'll likely have to work with a condo association or homeowners' association (HOA). They manage common areas, maintenance, and sometimes even certain utilities. It's essential to understand the association's rules, fees, and how they operate.

Another consideration is that condos might come with specific regulations and restrictions. These could affect things like renovations, leasing restrictions, or even whether you can use certain units for short-term rentals.

Overall, the main difference is the ownership structure and dealing with individual owners. Make sure to thoroughly research the condo association's rules, fees, and any potential challenges before making a decision.

Good luck with your potential investment in the condo complex! If you have any more questions, feel free to ask!

John Mathew

You're absolutely right about the lack of safety in short-term rentals being a serious concern. It's very sad to hear about incidents like the recent one in Outer Banks where people lost their lives due to a fire.

I think it's a great idea to have more awareness and training for those who manage these rentals. Justin Ford's safety course for hosts sounds like a step in the right direction, even though it's surprising that many people haven't heard of it.

The picture of a crowded treehouse hosting nine guests is concerning. It's important for hosts to prioritize safety over packing in more guests. Educating ourselves and fellow hosts about safety standards and limitations is key to preventing accidents.

Raising awareness among hosts and colleagues is crucial. Many hosts might not fully understand the risks involved. If we don't address these issues, it could lead to more regulations on short-term rentals.

Let's keep talking about STR safety and encourage others to do the same. Safety should always come first, and by working together, we can make a positive change in the industry.

Hey James!

It's awesome to see your interest in diving into the world of short-term rentals (STR) with a solid budget. Your plan to use $1M from selling your business to kickstart your real estate journey sounds exciting.

Let's break down your options:

Your initial thought of going all-cash and buying a near-beach or beachfront property has its perks. With no mortgage, your cash flow potential could be higher. Plus, having a solid cash flow from the get-go gives you flexibility and peace of mind. And since you're aiming to use the cash flow to snowball into more properties annually, that's a strategic approach.

However, there's another path to consider – using a portion of that $1M as a down payment and financing more properties right away. This could diversify your portfolio and potentially speed up your journey to accumulating more assets. It's a bit of a balancing act – you'd have mortgage payments, but you might be able to acquire multiple properties faster.

The decision often comes down to your comfort level, risk appetite, and goals. Going all-cash provides stability and a solid foundation, while leveraging with mortgages could potentially accelerate your portfolio growth.

Your idea to wait out high interest rates is thoughtful, and refinancing the first property down the line is a smart move to capitalize on favorable market conditions. It's a way to optimize your investment while making the most of the flexibility you gain from your cash flow strategy.

In the end, there's no one-size-fits-all answer. It depends on how hands-on you want to be, your long-term vision, and your comfort with leverage. Given your unique situation, I'd recommend sitting down with a financial advisor who understands real estate and can tailor advice to your specific goals. They can help you map out the pros and cons of both approaches and guide you toward the strategy that aligns best with your vision.

Exciting times ahead – best of luck on your real estate journey!

Cheers,
John Mathew

Hey Troy!

Your situation definitely brings a unique twist to the world of real estate investing, and it's awesome that you're diving into it. Let's break down your scenario step by step:

It sounds like you have a significant amount of money sitting in a personal trust, and you're contemplating whether to use it as the funding source for your real estate endeavors. On the one hand, going this route might offer some tax advantages and potential asset protection benefits. It keeps things separate from your personal assets and could be a strategic move.

On the other hand, you're also considering pulling the money out of the trust and using it to make the property purchase directly in your name or through an LLC. This would give you more hands-on control over the funds and the property. However, as you pointed out, withdrawing from the trust could potentially trigger higher taxes since it might be categorized as income, and there's that $60k chunk you need to withdraw regardless.

As you're hoping to make your first property purchase before the year wraps up, timing becomes a critical factor. Transferring funds from the trust could take a bit of time, potentially affecting your buying window. Plus, there's the question of tax implications for both personal funding and going through an LLC. The tax outcome can vary based on the structure you choose.

Considering the complexity of your situation, it's a wise move to seek professional advice. Connecting with an attorney who specializes in trusts and real estate, along with a tax professional who can navigate the tax implications, would be highly beneficial. These experts can help you dig into the terms of the trust, weigh the tax scenarios, and guide you toward the most informed decision.

Remember, the right path depends on your specific goals, the details of your trust, and your broader financial picture. Take your time, gather insights from professionals, and make a decision that aligns with your long-term plans.

Wishing you all the best as you embark on this exciting journey into real estate investing!

Warm regards,
John Mathew

Hey Ismail.

Great questions! Figuring out repair costs is like piecing together a puzzle. And yes, it's totally normal for repairs to end up higher than the initial listing price. Here's the lowdown:

Getting Repair Costs Right:

- Home Inspection: Get a seasoned home inspector to check things out. They'll unearth hidden issues you might not spot.

- Quotes Galore: Reach out to a bunch of contractors. They'll give you estimates on what repairs will cost.

- DIY vs. Pros: Decide what you can handle yourself and where you need a pro's touch.

Why Repairs Can Snowball:

- Sneaky Surprises: Sometimes, there are issues lurking beneath the surface that only show up during repairs.

- The Domino Effect: Fixing one thing can reveal a whole web of related problems, expanding the work needed.

- Market Tricks: Sellers might list low to attract buyers in hot markets. You might find more issues than you expected during due diligence.

Smart Repair Cost Moves:

- Stash Extra Cash: Always budget a bit extra for unexpected repairs. Maybe 10-20% of the purchase price as a safety net.

- Prioritize Wisely: Focus on must-do repairs first. You can tackle the fancy stuff later if the budget is tight.

- Talk Tough: If you find big issues, negotiate with the seller. You might score repairs or a price drop.

- Build Connections: Know some local contractors? They can give you solid repair estimates and maybe even save you some cash.

Remember, you're painting the whole investment picture. If repair costs get wild and threaten your profit or management plans, sometimes it's okay to walk away. Chatting with seasoned investors or pros can be golden for getting the full scoop.

Cheers,

John Mathew

Hey there!

First off, let me assure you that your situation isn't uncommon at all. Many of us have watched the real estate market roller coaster from the sidelines while pondering the "perfect deal." It's great that you're seeking advice to make a well-informed decision. I'll try to give you my perspective based on my experience as an investor and someone who's been in the real estate world for a while.

Option #1) House hacking definitely has its merits, especially with the lower down payment advantage and potential for appreciation. Idaho's growth, fueled by the college and other factors, does make it an enticing place to invest. However, it's essential to remember that appreciation is only one side of the coin. Negative cash flow can strain your finances in the short term, and you'd be relying heavily on the property's appreciation potential to offset those losses. The market can be unpredictable, and counting solely on appreciation might be a risk. So, I'd be cautious about going too deep into negative cash flow. Ideally, you'd want to aim for at least a slightly positive cash flow or neutral position, even when living in it.

Option #2) Exploring out-of-state properties for cash flow is a smart move. It sounds like your friends have had success with this approach, and it's understandable why they advocate for it. The challenge here is not having personal connections or familiarity with the local market. However, with thorough research and networking, you can mitigate this. Building a team on the ground, including a local realtor, property manager, and contractors, can bridge that gap. Keep in mind that you'd need a more substantial down payment, but if the cash flow is solid, it might be worth it. Also, by keeping your existing home as your primary residence, you could continue to build equity and potentially take advantage of more favorable financing terms.

Option #3) Combining both approaches could be a balanced strategy. You could potentially benefit from the appreciation potential in Idaho while also enjoying the cash flow from out-of-state properties. This diversification could offer stability in case one market takes a dip.

Option #4) Waiting for deals that cash flow in Idaho makes sense, especially if you believe that the market might stabilize and present more favorable opportunities. Patience can be a virtue in real estate, and it's better to enter deals that align well with your financial goals rather than rushing into something that might put you in a tight spot.

Ultimately, the best option depends on your risk tolerance, investment goals, and the specific numbers you're working with. The advice from your friends is valuable, but it's important to consider your own circumstances and conduct thorough due diligence. Real estate investing is about making calculated decisions that suit your unique situation, so take your time, analyze the numbers, and trust your instincts.

Feel free to reach out if you have more questions or want to discuss specific scenarios. Best of luck with your decision-making process!

Warm regards,
John Mathew

Congratulations on your recent purchase of a duplex in Saint Paul, Minnesota! It sounds like you have two potential tenants interested in renting one of the units, and you are trying to decide which group to rent to and whether to lower the rent for the sisters.

When making this decision, there are a few factors to consider. First, you mentioned that you and your husband live in the bottom unit, so you will want to make sure that the tenants you choose will be respectful of noise levels. If you think the group of three students will be noisy, then it may be worth considering the sisters instead.

Second, you mentioned that the sisters have asked for a reduction in rent to $1250 because utilities are higher than expected. You will want to make sure that you are covering your expenses and making a profit on the rental. If you decide to lower the rent, make sure that it will not significantly impact your bottom line.

Third, you mentioned the new ordinance in Saint Paul that limits rent increases to 3%. This means that if you do decide to lower the rent for the sisters, you may not be able to raise it significantly in the future. Make sure you are comfortable with this restriction before making a decision.

Ultimately, the decision of which group to rent to and whether to lower the rent is up to you. It may be worth considering the noise level, the financial impact of lowering the rent, and the long-term restrictions on rent increases. It may also be helpful to have a conversation with the sisters to see if there are other ways to address their concerns about utilities without lowering the rent.