All Forum Posts by: Leland Barrow

Pay off the mortgage. You can make more than enough money if you invest the $15,000 wisely. Take what you used to pay monthly in a mortgage payment and save it. If you cant turn 15k into 50k then you wouldn't have been able to turn 180k into 400k. If you cant turn the 50k into a 100k then you wouldn't have been able to turn the 180k into 360k. If you cant turn the 100k into 200k then still wouldn't have been able to turn the 180k into 360k. If you are able to go from 15k to 200k then you didn't need all that money anyways and now you have 200k and a paid off house. Just my 2 cents.

People that like tiny houses also want to live next to central park Downtown USA and bike to work. That land is too expensive. You could build a hippy commune in nowhere USA and pack them in per acre. That would be the only way I think you could get a good ROI. I would also be afraid that it would be a fad or generational thing. When millennials get old there will be tiny houses that the neighbors use as garden sheds.

You don't need to use a va loan to buy a house. The advantage of the VA loan is the down payment or lack there of. It will be hard to find a property that is both a income generator and within biking distance of locations. Personally I wouldn't waste a VA loan on a condo. I would suggest renting until you decide to invest in real estate. A personal residence is not an asset it is a liability. There should be no rush to add to your liabilities. If you want to build passive income then I would maximize the VA loan. Buy the best fourplex you can get your hands on that gives the best return. You can live there for two years or less depending on your circumstances. After that you can FHA another fourplex for a low down payment. I think it is 3.5%. You can have seven income generating doors and once they are seasoned you will have a couple of assets to leverage for more property acquisition. The idea of using the VA loan is to maximize leverage.

Btw why mess with a duplex? I would get a fourplex. You will have to put very little money in the deal and you can be cash flow positive while living for free. You are short changing yourself two doors. If it is a seasoned rental then that may offset your DTI. Two years later you can FHA another and have 7 income doors on two loans. Find a seller that will work with you and you can have almost no money out of pocket. I purchased a property for 350k and paid 1500 out of pocket. The seller paid 14k of my closing costs and I used the VA process to have him do all kinds of repairs on his dime. Two months later the property is comping at 407k. It was the cheapest house in the neighborhood which supports 900k for a 5/4/3. It is a 4/3/1. So we are doing the adds. If you are going to use a VA loan go big and negotiate hard. The interest rate we got was 2.85. It is hard to get that amount of money cheaper than that. After the add we will sell, cash out and VA another property for either cash flow or equity. While 1038ing the profit from that into other properties. This way you are building assets like tree branches using OPM. When uncle sam is shoving "almost" free money at you, take it for as long as they are willing to do it. Especially when you have no skin in the game. Uncle Sam is always trying to get his, so turnaround is fair game lol.

A VA home will have to pass lender qualifications for inspection. If you are looking for a house that has been vacant then you may have issues. If you are looking for a property in good condition then that would be ok. It would be a difficult process to find a home that needs TLC and use a VA loan. If you want to drive for dollars to find a fourplex that has a for rent sign in the window then that may be worth the effort. You can call up the landlord and see if he/she will sell.

I am and will continue to be employed while doing real estate. Here is a few reasons why:

1. I like working, it gives me purpose. I enjoy mentoring employees from the hiring process and throughout their careers. 

2. I am also not done with self actualization in Maslow's Hierarchy of Needs, I have more bullet points to add to a list of career accomplishments. 

3. I make good money and my purpose in life is to build legacy wealth. I want to build wealth not only to help others now but to give my daughters a start in their lives so that they can help people also. If I died with enough passive income so that my girls can go chase a dream of teaching English in a third world country then mission accomplished.

4. I have the work ethic to make both successful.

5. If I was at home more during the week my wife would divorce me.

I do plan on transitioning in about ten years to my own real estate related job. I will own my own business but it will still be a job. 

Real estate investing is one of the only businesses where you can have complete control to determine as little or as much that you want to do. From turn key to flipping there are plenty of options. If a 30 year old purchased one property per year over there lives then they would have a portfolio of about 40 properties before moving on from this life. That is a decent portfolio and one per year is definitely part time. I would say that talented people can do at least four per year without it consuming their lives. If you plan to 10X then you may have to go full time REI.

SBR* Save, buy, repeat. See even dummies like me can do it. So you can too lol.

REI is about having the resources to take advantage of great opportunities. Know what your target investing areas are and build up your resources first. You need to know where you are going before you can figure out how to get there. Lets say that after thorough research on BP that you decide to invest locally in Nampa, Idaho. The plan you develop is to buy 5 SFR to build some assets, before moving into MFR. You determine that the average SFR cost $100,000. You also know that you want to purchase properties that need maximum amount repairs of ~$5,000. That is your destination and now that you have identified it, you can build a road map to get there. To have the resources you will need $20,000 for 20% down, and $5,000 for repairs, $3,000 in closing cost, and probably another $5,000 in reserves for about $33,000 total. (All arbitrary numbers).

Save until you get that amount. You can mow lawns, work part time, deliver pizza, or whatever it takes to get that 30,000.  

Buy your first deal and then make a decision on how to keep the momentum going. This is when being creative comes into play. Now you can use a brrrr strategy, partnerships, or hard money to keep going. Or just use the BSR method; buy, save, and repeat.

Your first deal should:

-Teach you discipline

-Teach you the process

-Start building your network

-Give you an asset to build upon

-Give you some legitimacy

Don't put the cart before the horse and jump into a situation that failure is far more likely than success. Just my advice.

I doubt you will have luck with that. Sounds like it could be a conflict of interest concern. I am sure that no attorney would want the perception of receiving kickbacks. Any Attorney worth their merit would give their best advice to a client which should include maximizing the price of the property by selling it through traditional routes.

First you need to decide if it is worth your time. Then quantify an offer based on worse case scenario. What are the comps in the area and estimate your repair costs. Personally I would throw out a lowball offer that is well within a safe zone. If they turn it down...so what. The more difficult a seller wants to make the process then the lower the initial offer will be. After they turn it down your REA has more leverage to get a showing. If there are multiple offers then just move on.