All Forum Posts by: Joshua A Kloos

@Sean DeRue

Well it really depends what you want your career to be. I advise learning some basic contracting to save a lot of money (YouTube is enough for this if you’re okay with tools)

I redid one of the bathrooms at my duplex. I decided to tear out the old tub, install new valves, new toilet, new vanity and sink. I also wanted to put in new lights, new vinyl flooring and repaint the bathroom.

To hire an Eletrician for the lights, plumber for the tub, general contractor to fix the Sheetrock, painter to paint and flooring guy to do the floor would probably have cost me $5000-$8000.

I completed the project myself over the course of a week for under $800.

Also, during the sale process, my real estate agent did not specialize in multi family purchasing and had no idea how to structure a lease, negotiate the sale or even what the property should be listed it. He was a fantastic help, but he just couldn’t really advise on landlord stuff!

My point in this is that since you’re young and don’t have 10s of thousands of dollars in the bank, it may be a good idea to be prepared to learn how to plunge a toilet (a toilet plunging company is $120-$175/hr) and a toilet snake is $15.

Also, make sure you are clear on your goals. If you want to buy and hold then I would recommend not becoming an agent. Becoming a real estate agent will teach you how to become a fantastic real estate agent and not how to make money holding rentals. My agent recommended I list my property at 225k and I listed it at 250k and we received a cash offer the next day.

Again, it’s up to you what you do! But I find someone who does EXACTLY what you want to do and make them a mentor.

Hope this helps!

Best,

Josh

@Delmas Gibson

So, I was looking at a portfolio deal (multiple properties) and I had found a few lenders to entertain the idea.

I was asking for a 12 month loan for 100% of the purchase price and I was planning to buy the property at 70% it’s market value and simply refinance in 12 months, pay off the hard money loan and have a mortgage.

The interest rates I was quoted were between 15% and 18% but they loan was interest only.

I was afraid that any sort of market crash would have ruined the deal. Especially when I would be relying on equity in 12 months to pay off the hard money loan.

@Marvin Meng

I have never done a hard money loan so take my opinion with a grain of salt!

Hard money sounds good but I’ve found really high interest rates. This scares me as, if the market declines, the option to finance into a traditional mortgage, if the market doesn’t allow selling for the price you need, goes away.

I do not know your lenders or situation so don’t listen to me too intently!

Hope this helps!

Best,

Josh

@Steve Lawrence Sr.

I spent 6 months as an HOA manager and that was enough for me to avoid them like the plague.

A lot of power hungry board members arguing over what color fence to put up and what color doors are allowed.

May be good option depending on you though.

Make sure you read the governing documents and articles of incorporation - these outline the HOA rules and are public information. Your agent is able to request these, might be available on the HOA website or via the cities Business Commissoner website.

Read these in depth, some HOAs do not allow renters or even have clauses which allow the board members to control the rental agreements.

Hope this helps!

Best,

Josh

@Michael Kelley

I would pass on this deal.

A toilet costs $150-$300 and that’s considering you install it yourself.

Not enough cash flow to cover any unexpected expenses. And, if the market crashes and you have to lower rent to keep it occupied you will probably start losing money.

Hope this helps!

Best,

Josh

@Alina Trigub

I disagree. A friend of mine was looking for a building 16 months ago when I started out.

In that time he has read 20 books and closed on his first property a month ago.

I have purchased, rented and sold my first deal and walked away with a chunk of change almost equivalent to one year salary at my current job.

Now I’m looking for my second job.

I always recommending picking a strategy, committing and jumping in and be willing to do whatever it takes to make it work! Reading only goes so far!

@Sean DeRue

Hey, great idea to getting started at your age.

I just sold my first deal today - was a duplex that I owned for a year and was able to pull a 200% roi on my initial investment. However - it caused me months of stress, 5k in remodels and an eviction (one of leases had drug problems and needed to kick them out).

Going into it I had spent a year working with a property management company and had learned to do repairs myself and build a relationship with the management company where the owner helped me navigate the legalities of leasing and eviction. Because of this, I might recommend staying away from something that could become a full time job and cost $1000s.

Be careful with your real estate agent as his money is made by buying and selling - not buying and holding. Unless he specializes in rentals, he is not a good source of information for this one. If you choose a buy and flip strategy, he may be a good option.

Judging but your position, if I were you, I would get a summer/winter job with a general contractor (or as a maintenance guy!) pay is usually good $18-$25/hr, learn general repair skills.

Then I would purchase a condo - look for b class/c class building. This means the building is sort of crappy but the neighborhood has some nice areas. If that makes sense - older building, decent neighborhood (agent can help with this).

Find a property that has room for growth. Easy/cheap repairs are faucets, door knobs, carpet, flooring, paint, appliances, lights, etc. With some general co tractor connections/YouTube you can do a lot of this yourself.

I had an electrician come out to my property this week and he quoted me $3000 for repairing 3 faucets - I told him to go home and my agent gave me a referral and it cost me $250. Network hard to get the best prices.

Live there for a year, so some repairs and flip the thing or lease it out and become a landlord.

Hope this helps! Let me know if you have any questions!

Best,

Josh

@John Stevenson

Hi John, 

I would love to hear more about your ideas on non conventional lending. I recently moved to Fort Myers, Fl and am looking to get into a commercial property (4 units or larger) and I am exploring all lending options right now to find the one which would be a good fit! 

I would like to be able to make the deal without outside investors, however, non-traditional financing (from what I have found so far) often comes with higher interest rates and terms which, in the event of some catastrophic event, would have the property over leveraged. 

Would love to hear more of your ideas! 

@Melissa Jolley

Hey, thank you for the advice - I am still learning about different financing options. 

If you don't mind me asking, who is the lender? I would love to call them and ask questions about their requirements. 

Thank you again for the tip! 

Hey Bigger Pockets! 

So, I am just wrapping up my first real estate investment deal. I purchased a duplex exactly a year ago for $209,000 and it is closing tomorrow at 12pm (fingers crossed) for $248,650. 

Because I did an FHA loan, the property realized an ROI of almost %150. Of course, not counting the 7K in repairs I put into the thing. Also, not counting the AA tenants I had to evict because they were no longer AA and started begging on street corners for money. Story for another time!

At any rate, I recently moved from MN (my duplex's location) to Florida to transition from a maintenance job (plunging toilets for tenants got real old real fast) to a sales job selling roofs. My ultimate goal is to make a career out of being a real estate investor and a 40k/year maintenance job was just not cutting it. However, because of my now commission only job, I am in a bind if I want to re-invest my money into another property. The mortgage companies usually want to see two years of consistent commission history before they will approve you. 

I've come to the conclusion the best route forward is to scale up and go straight to commercial properties (4+ units). Obviously, I do not have $250K liquid cash to put down on a deal - so I am starting the process of figuring out what its going to take to round up that kind of money. 

I'm planning on meeting with an accountant next week to pick their brain? Maybe I'll meet with a lawyer too? A real estate agent? Really am not sure how to go about looking for a deal I do not have the cash on hand to purchase. 

Has anyone been in this position before and if you have, please tell me your life's story ;) 

Thank you all for your input! I am looking forward to this conversation.