All Forum Posts by: Joseph Back

@Greg Stetz Owner financing is an amazing way to purchase the property without using a bank. What occurs is the seller acts as the bank and sells the property to you, but at closing you just pay her your down payment and the rest of the proceeds she takes back as a loan that you owe her for. Unfortunately, owner financing works best when the seller owns the property free and clear. Given it sounds like this owner is in a decent amount of debt the seller financing option might not be possible. Feel free to DM me if you have any questions.

@Canesha Edwards I have been told by syndication lawyers that anytime you are raising money from anyone who is not going to have an active role in the business you need to file at the very lest a 506(b) or 506(c) exception. Do most people do this, no. I would recommend talking with a syndication attorney and asking about your specific situation.

@Farhan Khan I love trying to work out owner financing with sellers. It is an amazing way to accumulate properties, but only if it is the right seller. If this seller has owned his properties for 25+ years and has no debt on them then it could be a great opportunity to offer owner financing. Specifically, you can pitch the benefits of the capital gain tax savings as well as the opportunity to earn a higher interest rate on his money than if he were to put it in the bank or a CD. At the end of the day you want to have multiple options so make sure to line up some bank financing as well in case the seller says no to owner financing.

@Andrew Galeano I recently did something similar by partnering with my Dad to start investing in real estate. We took a $90,000 HELOC out on my parent's personal residence to start pursuing the BRRRR strategy. So far it has been great as we have completed our first BRRRR and were able to pull 100% of our money out to pay back the HELOC and now are working on the finishing touches of our second property, a flip that should net us ~$30,000.

@Kim Allard From an investment perspective you shouldn't choose one or the other but instead focus on the individual deal and see whichever option presents the best opportunity first. However, I would say it is probably easier to get started in the 4-unit space as most commercial(5+ units) lenders are going to want to see at least some real estate experience before approving you for a loan.

@Tyler Rebischke If you are able to pull off a house hack while in college I think it would be a great idea. I see the most difficult part being qualifying for a bank loan because they are going to look at your 2 income history to judge your ability to make the mortgage payment each month. I am assuming you have been working part time at most throughout the semesters you have been in school so that 2 year income history won't look to good. A potential solution to this issue would be to have your parent co-sign on the loan. 

Regarding duplex versus 4br, I would normally say the duplex because it can be busy to rent out individual bedrooms. However, given you are in college and renting by the bedroom is pretty common I would say it just depends on the numbers.

Lastly, for rent collection I would probably not tell your friend you are the owner and just say a business partner of yours owns the building and is having you manage it for him. That way if any issues or disputes arise you can simply say "my hands are tied, I am going to have to talk to the owner about it".

@Rick Stevens Definitely seems to be an idea that is gaining momentum. We recently advertised a house we own that is zoned business on a lease to own program for small business owners to have a chance to live where they work. We put up a few street signs saying rent-to-own and the response rate has been tremendous. Getting 5-10 calls a day every day since we put the sign out. Most of the people don't qualify because they need to use the location for business and most are just looking for a home. However, it has definitely opened our eyes to the demand for this type of product and spurred us to do some more research.

@Alejandro Corona Would recommend Rich Dad Poor Dad and Think and Grow Rich for getting your mindset right. After that you should get The Millionaire Real Estate Investor and The Book on Investing in Real Estate with No and Low Money Down. Both provide a great foundation for real estate in general and will set you up nicely to decide what direction you want to go with your personal real estate journey.

@Gerald Harris Have a few deals under my belt but those articles were great. Came across some amazing tips on taking my real estate business to the next level.

@David Roy Griffin Great tip, thanks for sharing. Will definitely start including this filter when searching for FSBO opportunities.