All Forum Posts by: Guy M.

Like @Joe Cayse said, let other people's money work for you. If you can avoid making a down-payment, you're golden. As mentioned by others, VA should be able to help you purchase a multi-family home without the need for a down-payment.

With 50k liquid, you are in a very good position starting out. What I would do is use that capital for negotiating power. For example, look for homes $30k and below and negotiate the price to rock bottom promising that you can close within a week or less, which you actually can with that type of cash. Cash and speed are powerful tools for getting what you want.

Once your properties are rented, open lines of credit against some of them and accumulate more great buys... maybe move up to the 10 unit investments.

Congrats, Marine!

I am in the Army... I've got about 2 years left and then retirement.

I did not start out this way but...

Many investors in my niche of buy and hold suggest starting with multi-family rentals. You live in one of the units and rent the remaining units out. I agree with this strategy because:

- You could potentially live in a unit for free as your other tenants will pay your mortgage

- You are right there to eyeball everything that goes on with the property

- Rents are more than enough to pay your mortgage monthly

- Take your profits and roll them into another rental property

Try that baby step. It makes complete sense for a guy transitioning into this business.

My most courageous moment was back in 2007 when I was contacted by a seller desperate to offload her house in Virginia. I had no money and no-so-great credit. The only solution I had to offer her was me lease-optioning her home for the sole purpose of finding the end-buyer. 

When I spoke to her, there was a lump in my throat and I crossed up some of my words. Waiting for her reply (after my extra long explanation of the process) seemed to have taken an eternity. When she agreed to the terms, I wasn't excited... I panicked because I had no experience on how to go about sealing the deal. The only closing statement I had was a meet up date that I presented in the form of a question. How weak.

I spent nearly half the night before meet-up day combing over the contracts I had pre-prepared. When I finally met her, I felt like she was sizing me up like, "this is the guy I was speaking with?" 

In the end, she was a very willing and graceful owner and we did great business together until the last tenants decided to raise pitch forks on us because they could not qualify for a loan and wanted their earnest money back.

I grew some chest hair during that experience.  

Hi, Porter.

Here's the fact of the matter... you're MBA friend is good at stocks. I think you will be wasting your time trying to convince someone to switch from a craft they are good in to a craft in which they'd have to begin a new learning curve . Even if he were to agree that REI is a better business decision, he's not going to abandon a strategy that is giving him a 34% return.

Now, a stronger argument might be on the subject of values and beliefs. I use to day trade stocks on MB Trading years ago. The reason why I stopped was due to the realization that some of the companies I invested in did not share my values, not to mention I had no control over those companies' daily operations.

I don't know about you, but I don't put my money into something I have no alignment with, besides a buck or two.

In REI, I knowingly and willing provide homes for people. I keep them warm at night and help them build memories with their families. On November 27th, a family had Thanksgiving in one of my houses; they will experience Christmas there, too.

I don't have time to make board members rich. Nor do I want them dictating how my money is going to be spent.   

Exactly.

Take notes, then take action. Mentors are very valuable but they aren't show-stoppers.

I would suggest a few things:

- Do a walk-through alone before you and the tenant do one together.

- Video record the entire walk-through with yourself and the tenant; get the tenant on video too.

- Give the tenant three days to find any additional damages and get photos, if possible.

This is thorough and will pay off at the end. The tenant will be more inclined to take care of the property if they know that you know just as much as they do, and can recollect easily if there is a dispute about the security deposit. 

Hmmmm. Does this standard apply to low income areas where many tenants may have criminal backgrounds? I wonder...

I think Kevin is right. You'll have to set up some kind of sign-in process along with a disclaimer. I also wouldn't offer free wifi because if you add the hassle of keeping it up, you might as well get paid for it. I'd charge slightly above market rent and advertise that "free" wifi. 

On the other hand, if they pay a premium rent for the additional wifi, that may be more pressure to keep it up. You might want to look into disclaimers to protect yourself either way.

All in all, I think it's a fresh idea...

If it is a listed property, link up with an agent to submit an offer. If it is FSBO, run some comps so you know what you're willing to offer (pay an agent to provide you with "guess" access to the MLS, or sign up to use Real Quest, etc.), then get with an attorney to help you draft up the offer.

I didn't get this info from your post, but... If you are going to buy and hold, I would suggest you get a cap rate on that property after you run some comps.

I hope things work out for you!

If the line of credit is on the first house, you will lose the first house because it is the collateral for the second house. If you are concerned about not being able to handle two mortgages (if you are only putting a down-payment on the second home and NOT buying it all cash) then I suggest that you start doing some cap rate analysis on the second house (or first)... this includes rental rates for the area, management fees, etc. and get ready to rent one of the two properties out.