All Forum Posts by: Justin Workman

start slow and grow organically. Dont over leverage and rush into deals.  Look at doing live in flips or buying a multi unit for your personal residents.  There are tons of ways to get started, but every overnight success is years in the making.  It takes drive and hard work to succeed.  Good luck.

Welcome to BP.  As a resident and inveator of Grand Rapids area.  I think its a great place to be.  The market here is not what it once was for the buy and hold investor.   We have seen millions of investor and venture capital dollors pushed our direction over the past year.  Resulting in higher purchase prices.  Our rents are very high right now and there is still a large demand,  but we are building and redeveloping at a record pace.  It requires a lot of research and the right deals to make it threw the long haul.  My personal fear is that we wont be able to maintain the return in the next 5 years.  We are still a smaller city, yes we are growing.  But when others are greedy its time to be fearful

wholesaling is a tough business.  And many investors dont get it, and more wholesalers dont understand what a good deal is.  I would try to be upfront with your buyers and dont over charge for your service. Most investors work with realtors and understand commissions, and are ok with paying them.  Also remind them, that they can move up the list in terms of who is contacted first on your next deal.  I have bought a lot of houses outside of GR, and have been contacted by a bunch of wholesalers, but none of them have ever worked because they dont know the numbers. And in turn dont have a good deal.  Its hard to make it work and i dont know anyone that dose it well.  The few guys that i know that do it actually buy the property and just resell it.  But that takes cash and most wholesalers dont have that ability. Work on informing your buyers and your numbers.  If its a great deal the wont be able to wait on it.

Look for a 2 to 4 unit property.  You can buy it with an fha mortgage which means a very small down payment.  You have to live in one unit and can rent out the rest.  After two years you can move out and do it again.  Its a great way to get started and will help you build your team.  Trying to jump into a syndicate as you first deal is not recommended.  Start small and grow organically.

every overnight success has years of hard work behind it

I would ask the seller to extend the length of the contract to lower your monthly payment.  If you were to use the 50% rule, you will have around $1800 in expenses every month before your mortgage payment.  With your current plan you have a payment of over 2900 + 1800, in other expenses which puts you at a loss of $1000 per month.  If you can extend the terms to 15 years you are closer to a break even, and over time it should be a great property, assuming you can add some value, reduce the expenses and the market appreciates.

If the seller will not extend the time frame, I would move on.  Keep looking for deals, keep working, and you will make it work.

Also check into the foreclosure law in your state, In Michigan there is a 6 month or 1 year redemption period after the foreclosure takes place. All other liens should fall off after the foreclosure, but the HOA may require you to pay the outstanding balance, for reinstatement.

Anthony your numbers are a little off.  Someone making 50k is not going to be in the 33% tax bracket.  And your 25% is baised on your after tax income not after retirement savings.  His method works great on teaching frugality and not over spending.  He also teaches about working hard and starting businesses or getting a second job and sacrifice to get ahead.  You can find deals in that price range in most areas.  If not and you want to work the system look at moving to a different area.  

The point is that it can work but it starts with work, education  and sacrifice.  Which all real estate investing requires.

I love it when they need everything. Its easier to budget for when everything needs to be replaced. My flips where I think I can save the hvac or patch parts of the roof have always come back to haunt me. Expecially when it comes to FHA buyers. I had a roof where we replaced 6 shingles and because they had not laid down and adhered to the layers below the inspector determined the roof needed to be replaced. I had a furnace that was in good condition but was older and the inspector stated that the heat exchanger could be cracked. In both situations its too late. We had accepted offers and needed to fix the problems prior to closing. So I have learned that if i fix them up front, I can market the improvements and raise my sales price.

It depends... who owns the LLC and how are profits going to be distributed. If your just collecting intrest on the money i would just set up a mortgage. If you are sharing in a split of the profits and its a one time deal i would look at forming a joint venture. If this is going to become a business and you own the LLC togather I wouldnt worry about it and work with the title company or closing attorney to quit clame it into the LLC at the time he closes on the purchase. If you question your partners motives and ethics at the beginning you may want to avoid being partners in an LLC. And joint venture the projects as the come along.

Once you graduated and find a job and are ready to buy a house,  look for something with 2 to 4 units.  You can live in one while your tenants pay your mortgage.  It also lets you get standard financing and the ability to homestead the property.  Keep reading and attending events.