All Forum Posts by: Jonathan Morris

Paul Timmins Thanks for the link. I like your idea of more REIA groups the better. Maybe I will visit all three and see which ones are suited best for me. Do you have any advice for someone's first time at meeting? Mehran Kamari I hope that is true. I hope this does become my reality. I hope to not be one of the number of people that give up before I become successful. Thanks for your thoughts.

@Wendell De Guzman

Thank you for letting me know that I am not fantasizing and that it can be a reality. Funny thing you should mention that book. I have been reading posts by J Scott and following his 123flip.com blog. Right after I posted my introduction, I bought the digital version. Then I just looked at your response and saw your advice to get it.

@Account Closed

Thanks for the advice on not getting discouraged. I am sure I will experience set backs in this career, but it is good to know that it is common and to keep working through them. I noticed that you organize the WCRT. I live on the north side of the city. How often do you guys meet and where? How many people usually attend? What would your advice be for the first timer at an event?

I just wanted to say hi and introduce myself to the BP Community. I should also add a Thank You for all of the knowledge I have gained since joining the forums. I figured it was about time to make a formal introduction. I have actually posted some questions on the forums. As a result, I have gotten great information and been in contact with some incredibly helpful people. I have been reading so much information from this website but have been apprehensive about an introduction.

I have always believed that the way to financial freedom is through real estate. I have never really pursued anything until now. By "pursued", I mean just reading and trying to gain knowledge. I think if I spell out my goals here, maybe that will help push me to taking action to accomplish them. I want to learn how to rehab houses for profit. I believe I could become really good at this over time. The profits I gain from rehabbing would be used to purchase rental property. Ultimately, I would like to purchase and hold onto several rental properties such as 3 flats or bigger apartment buildings. The goal would be to generate enough cash flow to pay for my monthly expenses. And all the while, I could continue rehabbing houses. I know this probably sounds like some newbie fantasizing and not realizing how much hard work will go into this. I truly believe that to become great at anything, an individual needs passion and commitment. I believe I have the passion and I will have the commitment. I just need to take that first step. When taking that first step, it seems like there is so much information and so many directions in which to take that first step. Finding BP seems to have been a step in the right direction but I need to take that next step. I think the next step would be to find a local REIA to attend. So far I have come across three: 1) Chicago Area Real Estate Investors Association (CAREIA), 2) Chicago Creative Investors Association (CCIA), and 3) WCRT. If anyone has any other suggestions or comments about the ones I mentioned, I would appreciate it. I know that much of this business (as well as many other businesses) is about relationships. The next step for me should probably be to develop relationships and gain knowledge from others by going to some REIA meetings.

From my real estate investing, I am not looking for an extravagant lifestyle like Donald Trump. I just want to gain the knowledge of how to locate a property for a discount, rehab it, and sell it for profit. If I am able to become proficient at that I will gain the confidence that I can become financially free and live a comfortable life.

To the BP community, thank you for everything so far. And thank you for the future support that I know I will receive while here.

@David Weiss Thanks for your thoughts. I appreciate it. I sent you a private message because there was something more I wanted to ask but didn't want to do it over the forums. I appreciate the insight and time you offered me. Thanks again.

After researching endlessly to figure out the best strategy to begin my real estate investing career, I have some thoughts on the types of deals investors will come across. Personally, I want to start out by wholesaling and move into rehabbing while at the same time wholesaling the deals I cannot do myself (b/c of lack of time, finances, etc). Ultimately, I want to build up enough money through wholesaling and rehabbing to purchase buy and hold properties to have cash flow each month to cover my living expenses. This general plan is clearly a long process and not an overnight thing. I think lessons learned wholesaling will help my rehabbing, and lessons learned wholesaling and rehabbing will help my buy and hold investing. Through this whole process, I think there will be three basic scenarios when introduced to a motivated seller: (1) seller is upside down on his loan, (2) the seller has little to no equity, or (3) the seller has a lot of equity. In each of these cases, it seems that there may be ways to profit. If the seller is upside down on the loan, there is the possibility of a short sale. For the seller with little to no equity, there is the possibility of the "lease option" or "subject to" transactions. And for the seller with plenty of equity, a straightforward purchase could be arranged. I am sure other strategies exist. Is my line of thinking correct? ...as long as you have a motivated seller, there is the possibility of profit? One scenario may be more difficult then the next. But if I understand this, then I am not passing up on plenty of deals instead of just looking for the perfect one that fits my criteria. Does any one have any thoughts on these types of scenarios or experiences with them?

Michael Quarles thanks. I will try adding that criteria and see what happens. I am sure there are a lot of in state land lords who are tired of being landlords still. Wendell De Guzman If I use less equity, how could I wholesale it if the rehabber doesn't have much of a profit margin? Also, if I expanded to beyond cook county, I would be stuck driving 2-4 hours just to see the house in an area I don't know the comps. Everything I have read on these forums says to keep to an area not too far from you. Mailing to them seems like it might not be a great idea.

I have been reading so much of the forum discussions on wholesaling and wanted to take action. So I decided that I would begin with my marketing. As I have read, this is truly a numbers game. I have read of people sending out anywhere from 1000-5000 pieces of marketing per month. I went on to Listsource.com today to research the area I want to focus on. I live in Chicago and want to focus on there. Chicago is such a big city with so many diverse neighborhoods that I want to focus only on certain zipcodes because I know those areas really well. I entered these criteria:

Geography: 6 zip codes

% equity: 40-100%

SFR

Absentee owned (out of state only included), Exclude trustee owned and exclude corporate owned

The result was something like 80 properties. So I did the search over and changed the geography criteria to the entire city of Chicago. The results were 322 properties. Out of curiosity I did the entire Cook county. The result was 833 properties.

Am I doing something wrong? If it is a numbers game, I should have a list of at least 1000, not 322 (I am sure I don't know all the areas that some of those houses are in since Chicago is so big). If this is accurate, how are people getting lists that are so big and are close enough to your area that you can view the houses?

Any thoughts/suggestions would be appreciated. Thank you very much.

@Chris Sweeney: Should the follow up be through direct mail (the way he initially contacted them) or should it be by phone?

@dawn- thank you. @andrew- I guess that might have been a vague question. I have money for rehab and holding costs. I just didn't want to have a hard money loan be my only option for a couple reasons. I think it is possible to make a profit on a property that has higher than 65% ARV (typical HM criteria). Also the 3-5 points with 12-15% interest would be higher carrying costs (or at least in the properties I would consider) than on the existing financing of the property. Also, it would be my first rehab and a HM lender might be more apprehensive with lending to a first timer. I just wanted to make sure that was a good option or another tool to have in the toolbox as far as entry strategies. As for exit strategies, I pretty much only see lease options on the forum from a property acquired by subject to, not rehab and sell retail. I guess I didn't want to be tied up in a property, especially my first, for 2 or more years hoping a tenant can qualify for a refi loan from a lease option deal. Also, the last thing I would want is for the loan to go in default for the original seller. I would take the sellers credit responsibility very seriously and I would not want to jeopardize that for them. So is a subject to with a rehab a good option if I don't want to or can't utilize a HM loan? Also, does anyone have experience with doing that and what advice would you have? Thank you for reading this long winded question.

Does anyone have thoughts on using a "Subject To" existing financing in order to rehab a property and then sell it. I have started reading a lot about "Subject To" and want to know if anyone has thoughts or experience with this. I am in the education phase right now and would like to know more. So far the forums have been a great resource. I would like to rehab houses but want other options besides a conventional loan or hard money. Thanks.