All Forum Posts by: Josh Collins

@Adam Boonzaayer

@Gary Barella said it perfectly.  I get this feeling that you're worrying about the finish line before you lace up your shoes.  This is good, but it feels like an excuse not to get started.  It sounds like you have a game plan and a way to source deals, so get started.  The best part is that you'll figure out if this is truly a sustainable plan and whether it's as easy as you think.  Also, I'm with others on here that say Banks will being tripping over themselves to fund your deals if you put together a solid track record.  It seems to me (but I could be wrong) that the grand plan could scare away lenders who don't feel comfortable with whether or not you can actually pull it off.  Plus, I keep hearing that you can qualify for conventional loans on up to 10 properties before you need to consider commercial lending.  

Good luck.  I can't wait to see your follow-up thread a year from now!  

@Mike Juliff  Tons of great info here.  I'd also suggest one more option for you.  Stick to what you are doing.  I know 200 letters may seem like a lot, but sending them out once is probably not going to cut it.  What happens if they think, "No, I'm not interested in selling" and then a month later things change.  As a lot of bigger pockets episodes state, you have to stick with it because you never know when someone needs to sell.  I think you are doing things right, you just have to stick with it.  Good deals come to those who are patient.  

Another option is to network at Meetups (there is an apartment meetup in Bloomington today at lunch time) and talk to a few wholesalers.  They may be able to put you on a short list if they know what you're looking for and that you're serious.  

The issue I see with your approach is that it seems like you are trying to put very little money down and get a good deal. The best deals are probably deals that need a little work and/or creativity. I may be wrong here, but it feels like the nice places (that would qualify for traditional lending options) are going to only be on the MLS and therefore command retail prices.

My two cents.

I'm sure I'm just piling on at this point, but great job.  I mean really, great job.  The place looks great and you seem to have made good decisions all along the way.  I hope you made some mistakes so you can learn something! ;0)  Anyway, consider me impressed.  Keep it up!

Super inspiring.  I love this.  Thank you for sharing.  You should most definitely be proud of your hard work.  Keep it up!

Any chance you can find a duplex to defer the mortgage payment to a certain degree?  The price might be higher but with the rental income, the overall payment might actually be less for you.  

Another option is to find a hard money lender to partner with to make a full-cash offer.  It'll cost you a little more for the hard money up front but as other's have mentioned, you might be able to offer less and get the place with a full-cash offer.  Then after the purchase, you could (re)finance the home and pay the hard money lender off.  There are a number of things that could go wrong here (doesn't fit into the loan specs that you want, the house doesn't appraise at what you need it to appraise at, the hard money lender requires more equity in the deal, etc.) but I'm trying to think outside the box to make your initial offer appear more robust.  

Another option is networking with as many wholesalers as possible at your local real estate networking events (REIA) and try to find something that can pass for an FHA loan or whatever. I've seen a few pretty solid places come through my email that might be able to pass for a conventional or FHA loan. I know some stud and studette wholesalers see houses of all conditions come across their desks. With that said, most of them require quick closes and cash offers, but I think they get long runways every now and then. You may have to pay more (once again) but you might be able to get something without having to claw it out of the competition's hands.

I'm struggling to put my thoughts together on my next idea so I'm hoping that others can fill in the details.  What types of loans can you get (conventional?) where they can wrap the rehab costs into the loan?  This might work in the situation that you buy a fixer-upper duplex, live in half and rehab half.  Then flip to the other half.  I hear of people buying fixer-uppers all the time and getting rehab costs wrapped into the loan.  

At the end of the day, don't over-extend yourself.  I know starter homes in the Twin Cities are getting harder and harder to find.  That also means that it's starting to make sense to rent rather than buy.  Maybe you should rent a primary residence and buy a rental prop in another market.  This could help you offset your current rent.  With your high FICO score, and a W2 income, you'd probably pretty easily qualify for another market where there is a little less competition and better rent to value.    

Okay, enough thoughts for one post.  DM me if you want me to elaborate.

@Max Peterson

The 1% rule is great as an instant check but you really need to run the numbers.  For instance, commercial properties in the Twin Cities have much higher property taxes than residential or even commercial properties in Western Wisconsin that can ruin a pro-forma.  @Tim Swierczek hit the nail on the head.  You should probably get comfortable with running all the numbers on a few properties before you come up with rules of thumb.  And then once you've developed your own rules of thumb, check your work by running the numbers again.  

Good luck!

I would say the biggest concern with a condo association is to make sure that the association is in good financial standing.  Also, do they take care of their owners by fixing things in a quick manner?  Ask around and see if anyone has had issues getting repairs made by the association.  If that checks out, I'm with @Jordan Moorhead and @Dan Vleck, you're probably good to go.  Inspections are $300-$400.  I'd say sign up for one or have a contractor friend walk the place.  It's good insurance.  

It seems to me your biggest risk is buying into an insolvent association.  If that checks out, I'd say you're good to go.  

Welcome @Cory Johnson, 

I'd like to mirror @Tim Swierczek 's sentiment.  Get to a couple meetups and talk with others.  DON'T BE SHY!!!!  These people all have the same common interest and there are newbies and seasoned investors alike at these meetups.  These are super valuable.  Then the next step is probably getting started.  BP has calculators as do other sites.  Once you've run numbers on a lot of properties, you'll know what a good deal looks like almost instantly.  Do the free stuff first.  Get somewhat comfortable with that, then jump in.  Don't buy and THEN run the numbers.  Be comfortable with the numbers first, then buy.  

Good luck and if anything doesn't seem clear or right, run it by the forums on BP.  These people are super smart and helpful.  

Hi @Whitfield Fowler, 

I'm in the Twin Cities market but mostly invest in commercial properties.  I too have a greater cause with my investing in general.  I am developing larger storage units that small businesses (an average citizens) can store there stuff and call home once they've outgrown their garages.  I like the incubator space a lot but I don't see that as a good fit for blue-collar businesses.  That's where I come in.  My feeling is that not a lot of businesses can get a start if they have a $3000/month rent payment before they have any real clients.  That's where I come in.  

With that said, I'm also looking at a development project of about 40 lots that I'd like to buy and finish the development with approximately 3 beds/2 Baths, 2000 SF homes for under $250K each.  It seems that those houses are hard to come by in the Twin Cities.  I feel for first-time home buyers.  I know, $250K isn't extremely affordable but in today's day and age of $450K+ new construction homes, I hope I get credit for trying.  The property is in an outlying suburb but not so far that it doesn't make sense.  

@Terri Dyer

Terri, I was at a real estate meetup in Bloomington, MN and ran into Hendrie Grant.  He is a hard money lender who touts being able to find hard money within 48 hrs if the need arises.  I doubt his money is cheap, (3% acquisition fee, 10% interest if my memory serves correct) but he's fast.   That sounds like your main concern at this point in time.  His LinkedIn page is: https://www.linkedin.com/in/hendrie-grant-08735b7/

As a disclaimer, I have not affiliation with him of any kind and have not used him.  I have no reason to doubt he can get things done, however.  

Good luck.  Feel free to DM me if you have more questions or need alternate ways to get in touch with him.  

-Josh Collins