All Forum Posts by: Joshua Amezcua

Love the idea of asking AI to compare and contrast strategies. 5 years ago I would have rolled my eyes or even downvoted such a topic, but the reality is that in the year 2024 AI is an incredibly powerful tool for gathering objective information to make decisions. Not perfect, and definitely should always do additional research, but we can't deny that it can be useful for ideas or questions like this.

I'm still VERY new to REI. I have somewhere between $200-250k in equity on my primary residence in Mesa AZ. I have been sitting on the sidelines about a year trying to decide what I want to do with that equity. I am seriously considering taking $150k of it and buying 3 new builds $50k down as rentals in somewhere like a Houston TX subburb, Wichita Falls TX, Oklahoma City OK, or Kansas City, MO. I have done the math and research on this a few times, and it always looks much better 5 years down the road then just buying 1 more house cash in Arizona for like $200k unless I get it from a wholesaler and add a ton of value. The cash flows are close at first, but down the road the 3 rentals look much more appealing.

@Frank K Hwang what kind of issue are you having with RentRedi? I was considering registering after having a chance to play around in their demo environment. Looks like it has everything I need for my smaller portfolio and at a decent cost. Worried I'll sign up and not be able to use the service.

I was in the same boat as you a few months ago, needing to decide whether to go out of my market/backyard due to higher prices or go out of state. I opted to try both, but still working on my strategy for local. What helped me make the decision was speaking to investor agents in my own area and then reaching out to agents in a few markets I was zoning in on. I did a ton of research before calling, but made sure to not over-analyze and paralyze myself from taking action.

I would start there. Be ready to share about yourself, your goals, a little about your finances, and your ideal buy-box. Ask to have them funnel a few potential listings your way and then get on the phone with them to go over some basic numbers. Also, make sure you really vet the agent. Just because they pop up in the "investor friendly agent" search here on BP doesn't mean they're a good fit for you. Make sure they can recommend contractors, PMs, etc... A bad agent can really impede your growth. Ask them to "give you the training wheels experience". Either they're good with it, or they're not.

Good luck to you Caden!

Just as a follow up, as I'm sure this will come up. I briefly discussed some of these questions with wholesale company when I interviewed for the position. Their answers were short and sweet, mostly that everything will be fine. But as I move through my course work, there are things that pop up where I don't understand how I can ethically or even legally perform both roles simultaneously. I also am not seeing the major benefit to them in having me hold my license.

Good evening BP,

I accepted a position as a full-time wholesale acquisition manager with a fairly reputable company. I was asked if I'd be willing to get my real estate salesperson license and I happily agreed as I've wanted to do this for some time. I am about 50% through the course and plan to have my licensing complete within 60 days. The idea here was that if a lead's property is a better fit for the MLS, I can offer to represent them and our company gets to keep the sale in-house. As I work through the course material though, I start to see a bunch of holes in this plan and I'm curious what the community's thoughts are.

For one, if a deal is a better fit for the MLS and we sign a listing agreement, then that seller is my client and my responsibilities shift from closing wholesale deals to taking care of my client. That will include assisting with getting the property prepared to go to market, arranging photography, marketing the property, holding open houses and showings, then of course overseeing the lengthy disclosure/escrow/closing process. The other acquisitions managers aren't doing any of this, and I feel that this could severely hurt my ability to perform my primary job efficiently.

Secondly, the company who I will be working for is not a licensed broker (as most aren't). This means I will still have to find an employing broker to hang my license and my commissions will come from them. I'm scratching my head here, because I don't really understand how this would be "keeping the sale in-house" outside of the broker possibly coming to an agreement with my company on referral fees. I guess I'm just not really seeing the benefit to my new company here. Currently, if an acquisition manager visits the property and discovers it's better suited for the MLS, they refer the seller to trusted agent and they collect a small fee. They collect the fee and move on, fast and easy. With me being their W2 employee, plus working as a licensed agent, I feel like this would potentially bog down their funnel as I would bottleneck working leads if I'm busy showing houses, responding to offers, etc...

Lastly, I have to imagine there are a ton of general rules and ethical standards I will be confronted with breaking daily in this double role. Everything that I do or say is held to a much higher standard once licensed. I really don't want to screw up saying the wrong thing, responding the wrong way to a question, etc.. So far, my coursework hasn't really gone into this and based on the curriculum outline it doesn't look like it will. I will not be receiving on the job training from my employing broker, as I will be full time with the acquisitions role.

Is anyone else in this particular situation? I searched the forums and tried some Googling/YouTubing and really couldn't find anything that matches my situation. Most people are just asking if they are allowed to wholesale houses while holding a license. The answer is yes, but in my situation I will be essentially approaching customers to sell wholesale services, then can flip them to traditional seller client if certain criteria are met. This is opposed to an agent who agrees to represent a client, then offers to buy their house wholesale. In this situation, the agent is not putting their clients best interests first. Thank you all for your time, in advance :)

Thank you! I have one more question that I'm not sure if you answered in the info above. Probably did but this is like a foreign language to me still. I'll use my personal situation and then add in the scenario/question:

I already own a house, used VA entitlement of $440k. I have $286k entitlement remaining on my COE. I have lived in the house for 3 years, so I should be able to purchase using second tier and convert my current into a rental which I plan to do in January. So let's say I go out and buy house number two using a VA loan. I have now maxed out my entitlement.

At this point can I then go out and find a VA loan (or 2, 3, ...) to assume? Or will I need to have remaining entitlement? Am I able to make it a rental right away or do all the normal rules of a VA property apply?

My thought here using this new information is I can use my remaining entitlement of $286k to buy a small rental in the Midwest or somewhere more affordable, live in it for a year and fix it up and add value prior to renting it our a year later. Meanwhile, I can go out and assume someone's VA loan and put tenants in it right away. And repeat until my portfolio has grown. I'm really trying to find a loop I can do using nothing but VA products to build my portfolio. I feel like it's not going to be possible, which is fine. But if it is, then I'm all about it.

Thanks for the info here. Though it was a bit confusing to me as a veteran and rookie. I was under the impression that anyone can use second tier entitlement to purchase a second home. As long as you've satisfied or intended to satisfy the occupancy requirement then you can go buy a second home using the VA product and make the first house a rental without breaking any rules.

But once you've reached two properties under a VA product, then yeah you'd have to get creative. Are you saying I can assume an infinite number of VA loans and that it is easier for both myself the buyer and the seller if we're both veterans? I'd like to get some more information on why that is. In past conversations I've had with agents they've made it seems like anyone can assume a VA loan but more importantly that it works out the same or is just as easy for non veterans.

I had not thought of this and it's not a bad idea, especially if I just use it in the living room where it tends to be the warmest even with the AC running cold. What I've decided to do is gut the front yard down to about 6 inches below the lawn and order 2-3 shades of rocks and do some pattern work plus some artificial turf in the center of each side of the pathway. It's a long front lawn, and the rocks will look pretty ugly if that's all there is, so I'm going to add a front porch/firepit area on one side and a pathway from the driveway on the other. This will help with curb-appeal and may add value in the long run. This will allow us to cut the water use in the front about 90%, only drip watering some small plants and a couple small trees. Not really the best look for a beautiful Tudor-style home, but we gotta do what we gotta do in Arizona.

As for the electric bill, I think I just need to go around the house and look for any inefficiencies and tighten them up. I'm going to have the A/C system inspected and tuned up at least and see if I can get another 5 years out of the current system. If that doesn't help, I'm just going to bite the bullet and upgrade the system. All in all I think it'll run me about $15k if I do the front yard myself and pay someone to help me with the A/C issues. After doing to math and remembering I have great credit, cash on hand, access to HELOC and HE loans, and access to the VA loan program I've decided I need to keep this property and do what I need to do to make it work as a rental. This house will be paid off in 15 years and easily fetch $1,000,000 by then as long as there are no major market crashes.

Thank you all for these responses. You've definitely given me a ton to think on. On the one hand, paying for the updates to the property now, while costly, would be peanuts compared to what I'd be forfeiting in the long run. I agree though that in it's current state I can't see why a tenant would want to stay long term paying these higher utility bills. I imagine every year around mid summer I will get the same upset messages, asking me to either fix the water situation or give them a discount on the bill or cover it altogether. That, or I'll have turnover every year.

One thing someone mentioned to me outside of this thread is that I could potentially put the house up as short or midterm rental, and pay the utilities myself. The higher rent on a midterm rental would offset the cost of the utilities. That all being said, I still think my best two options are to either update the the A/C system and redo the frontyard landscaping or just sell the house. I don't love the idea of selling but that $150k should go a long way to helping us to get going on our invsting journey.