All Forum Posts by: Kevin Stein

Appleton has an active REIA that I attend. Good group:

https://www.appletonreia.com/

I've also heard good things about the Green Bay REIA but I haven't personally been up to that one:

https://www.greenbayreia.com/

However if anyone is interested in a BP meetup separate from the REIA meetings I'd be game for that. I'd travel up to an hour in any direction from Oshkosh.

Looks like someone just revived this thread...so I'll provide an update.  I actually just passed my RE exam last weekend.  I ended up using www.wra.org for my training/class.  I went with the online self paced option since I am still working a full time job.  I was satisfied with what they offered...and I passed so I guess it worked well enough :-)

Hello,

I've always been aware that you can structure deals multiple ways, and submit multiple offers to the seller, but it has never completely clicked for me.  Could someone give me a real world example of what this looks like and why each option make sense for both the seller and me as the buyer?

I'll set it up this way so the math is really easy:

ARV = $100,000. Repairs = $20,000. MAO = $50,000 (100,000 * .7 - 20,000).

Obviously $50,000 would be the "all cash" price I'd be willing to pay (please don't crush me on the 70% rule, I'm just trying to make the numbers simple).

What would a owner financed offer look like?

How about a partially owner financed offer?

Again, I understand conceptually that having the owner carry back the loan means you don't have to pay origination fees to a bank or the higher interest rates of a hard money lender.  But I'm having a hard time determining how much that is actually worth (i.e. how much more I could offer the seller).

Thanks for any advice!

Thank you very much @Doreen Chaisson, @Daniel Dietz, @Brian Eastman.

I definitely need to do more homework on the SDIRA, but I can do that on my own time and come back with specific questions on that front :-)

Anyone have any suggestions/insights regarding traditional lending, HELOC, etc. in the situation I described above? Thanks again!

Thanks @Daniel Dietz.

Quick follow up on the SDRIA.  If I purchase a rental in that self directed account, does all rental income need to go straight back into the SDIRA?  Am I ever able to "use" that money personally or does it follow the same early withdrawal rules as any other retirement account? 

Hello BP,

Similar questions have been asked many times but I was hoping to get some advice on my particular situation.

I own my personal home and a duplex that I rent. The duplex has ~55k in equity. My initial thinking was that I wanted to use the equity in the duplex to fund the down payment on my next rental property. However, I just found out that my lender will not do a HELOC against an investment property. So now I'm left struggling to find money for a down payment.

My lender is requiring 25% down, which for me means I'd need about 25k for a down payment.  I have about 10k in reserves from my current rental but want to keep that in place for unforeseen expenses, etc.  And even if I did use some of that money I still don't have enough for the down payment.

I am not interested in a HELOC on my personal house (well, my wife is not interested in it) so that's not an option.

I just found one duplex where the owner would offer 50% seller financing on the property.  So now I would only need $12,500 down, but again, I don't want to raid my rental reserves.

I'm wondering if I need to speak with other lenders. Do some lenders lend against the equity in investment properties (not just primary residence)? Do any lenders lend without a down payment when the LTV is less than 75%? In this case I would only be borrowing 40% of value of the property because the rest would be funded by the seller.

I do also have 35K in a rolled over IRA account from a previous employer. No longer contributing to that account, it's just sitting there so moving that to a self-directed account could also be a possibility but to be honest it scares me. Seems like a lot of moving parts.

Sorry for the long post.  I wanted to outline my situation to see if the brilliant minds at BP have wisdom for me!  Thanks in advance :-)

Hi Travis, welcome.

If you're looking to meet people and network, make sure to checkout the Fox Valley REIA. It meets in Neenah each month. Once you meet some people you will find that there are also a few opportunities for mentorship groups if you'd want to go that route (they have a fee however). Here is some more info on the Fox Valley REIA:

http://foxvalleyreia.com/

I'm pretty new to the game myself but have found the meetings to be very beneficial.  Good luck!

Yes.  This is exactly what I was looking for and makes perfect sense.

Maybe I should have offered more background. I'm not actually using this rule of thumb to purchase property. I have a thorough spreadsheet that I created for this that accounts for repairs, vacancy, management, capex, etc. What I am trying to put together is a "summary" section that identifies common rules of thumb so others can more easily analyze the deal. Some people like the 50%, some 1%, some 2%, other go off cap rate, etc. I want my analysis spreadsheet to spit out all numbers so it works for anyone trying to analyze the deal quickly.

I know there are a million sites and spreadsheets that already do this, but I have to create something myself to get a good understanding on how the numbers actually work :-)

Just curious if people ran this particular shortcut against gross or net rents. Thanks!

Hello,

I've got a quick question when calculating the 1% (or 2% or whatever percent you like) rule.  Do you run the calculation against gross rent or net rent?  I'm wondering if people take their chosen vacancy factor into account with this rule?

Example:

$1100 gross rents with a 1% rule = $110,000.00 max offer.

$1012 net rents (after 8% vacancy factor deducted) with a 1% rule = $101,200.00 max offer.

Obviously you would want to get the lowest price possible, but I'm just curious when running this quick and dirty rule of thumb how people are doing it.  Thanks!