All Forum Posts by: Joseph M'Mwirichia

I think it would be great if there was a way to have the BRRRR calculator do a loan to cost formula in the Purchase Loan Details section.

For anyone using a hard money loan to finance their BRRRR deals, the downpayment you're making is towards both the acquisition AND rehab costs combined. Currently in the BRRRR calculator, you can select a percentage value for the "down payment on the purchase price" or override that and simply input the "actual value of the loan." Unfortunately, neither of these options are very helpful in the case of a loan to cost loan from a hard money lender and ultimately end up producing inaccurate numbers for the Acquisition section of the final report. Specifically, the "Total cash needed at purchase" figure will be wrong.

There is a workaround here by combining the acquisition and rehab costs in the purchase price field and then select the downpayment percentage the hard money lender is requiring and go from there. The downside there is the acquisition and rehab cost numbers aren't broken out so it can be hard for a third party (a partner, lender, etc.) to really see how much you're paying to buy the property and then how much you're estimating the rehab cost.

This seems like a straightforward fix, though I'm not a developer so take that for what it's worth. It would be great if there was a toggle of some kind which allowed you to enter in a percentage downpayment for a loan to cost (purchase price + rehab) that would solve this issue. Considering many investors use hard money loans to finance BRRRRs and these loans are almost all loan to cost-based, this would be a good addition to have in the BRRRR calculator.

You don't need to give 50% of your profits (or knowledge) away to a partner, plus the negatives that comes with a new friend that you owe money!

There are some interest responses to your questions, I personally think from another point of view. 

We all have been where you are .... not a great feeling when everywhere you go - you  can't recognize a deal, do a deal or make an offer!  It could be fear of success or failure.

Why?

don't know the market - in the wrong market,  looking at or dealing with too many agents, looking at listed properties. (retail)

don't understand or apply alternative financing, maybe you need skills in negotiating - maybe more practice, not making enough offers

you may not have used the right contract and contract clauses

maybe you've listen to too many real estate gurus give misleading advise, or spent money on useless seminars and other junk.

Making money in real estate is a challenge for beginners, even now at 77 years old I am very careful and understand even with experience, a buying mistake can be made,  a mistake that could be costly, timely and loss of face and sleep. Nothing goes as fast as it should and all deals take longer than expected to close (and collect fees)

I believe that because of my fear of mistakes, I always want to CONTROL properties before I formerly commit and  during a certain period time (3-4 weeks), assign my interest for a fee and sometimes a buyers premium commission.

IMPORTANT: Always make full disclosures about your time frame, your intentions, show you are creditable, build rapport,  dress professionally discuss sellers needs, listen closely (find their reason for selling (solve that problem), discuss a Hybrid offer, a sellers annuity and the yearly return in cash, discuss the benefits of doing business with you. Learn to explain a seller held mortgage, be prepared to write an offer. Trust in your research and yourself.

Go where the deals are - foreclosures auction, all real estate auctions, tax sales and district  court, subscribe to certain publications in your community, be prepared do your comps, try to guess the hammer price at auction, see how close you get. This is a great way to learn the market. Set your goal - things to do - do the the thing you fear, understand how to eliminate PHONE FEAR 

Meet others people at public auction - attend certain real estate meetings, discern between real knowledge and fluff - don't buy any  courses, make friends with a person with a substantial portfolio of properties, keep your BS meter toned!

Charles

I’m looking to get my business credit started. I have read a few books and watched a few videos. All seem to agree that you must get a physical address that is not your home or a PO Box. Does anyone have a suggestion for a virtual office address? Thank you.

business registration means nothing.. having an LLC means nothing.. LOL.. anyone can get those set up for a few hundred bucks.

the really funny one is when they send you a picture of their ID to prove they are real  LOL.. just crooks and theives looking to take advantage of those beginning their real estate or borrowering  journeys nothing more nothing less

💯💯💯  Jay!

Even had a phone call with the dude, the FB profile was of an Indian dude, consistent with being a Mauritius based company, but accent was clearly west African. I know I have added advantage and can tell this being of African descent myself. Phone call would disconnect about every 5mins. They provided FB references for closed deals. You can already guess they were hacked profiles when digging into the FB ids.

 Not once did he attempt to ask about the specifics of the deal, what made it a strong opportunity, exit strategies, what excited me about it, etc. Also to note, they didn't ask for money upfront...just a little something more valuable, your identity.

I guess I ought to go on record and say that I didn't provide any of that either and proceeded to also flag the FB account as fraudulent.

a business plan sample or template 

I did not know there is such a thing - maybe some of these ideas will help with you form a template for investing in multifamily units....

• know how much money you can put your hands on today
• create a credit line ( as big as you can - you'll need it!)
• learn about 1031 tax deferred exchanges
• complete you financial package - 3 years tax returns P&L - real estate portfolio, credit score
• expect to be rejected by lenders and other W-2 employees - 
• qualify lenders, bankers, mortgage brokers - ask what products they have - see if you qualify for them
• look at 20 buildings before offering on any - know the SF dollar cost - keep a journal
• mail lots of letters (be professional NO yellow childish communications) to owners of apartment buildings
• Understand what a CAP rate is and how to get to it - fill out your commercial APOD
• Verify -verify - verify all financial data given you by sellers - sellers are liars (so are buyers) 
• trust NO One!
• Expect to over-pay or pay retial
• work on expired listings - that is go knock on some doors of failed to sell properties
• always ask the 7 words when negotiating - IS THAT THE BEST YOU CAN DO?
• ask for more - money back at settlement - guarantees to survive settlement, all chattels in buildings
• add commercial real estate to your wish list of opporltunites
• if you become discourage and frustrated - go flip a few junk houses for practice and cash flow
• attend auctions - watch the activity closely - meet your competition - collect cards - build a buyers list
• do something every day related to your personal real estate and financial goals DON'T GIVE UP!
• Have fun - don't take yourself too seriously
• learn the pleasures of COLD CALLING sellers
• read financial newspapers - look for auctions - law suits -failure to pay taxes notices and business opportunities
• Search tax sales - attend tax auctions - 
• read probate ads
• sit in court - listen to cases - find motivated sellers
• create a Fiduciary Buyers Broker agreement with smart agents - pay them for non-listed real estate.
• don't waste your time with non-responsive agents - brokers - lenders or sellers
• be demanding - get answers - don't be passive - at our age (I am 75) we don't have time to waste!
• have fun and keep a score card of your success (add up equity until you hit a million dollars
• tenants - your new responsibilities - treat them like customers - they'll pay your mortgages if you do
• do not associate yourself with a mentor or buy expensive real estate programs unless you know for sure that the instructor  or mentor has a reasonable large net worth and is qualified to teach you what you need!

Enjoy the exciting trip and education in the real estate investing field - 

Oh! read - I like REAL ESTATE EXCHANGES & ACQUISITION TECHNIQUES by Wm. T. Tappan, Jr. lots of great real estate formulas that will help anyone reading it.