All Forum Posts by: Lillie MAnon

Welcome to the real estate investing world Bruce. I think it's important for you to take stock of where you are and what your goals are. 

How do you plan to finance the properties? - If you have plenty of money to invest, the process is almost no-brainer. If you need to raise capital and/or create partnerships, it becomes a bit more challenging and I would suggest linking up with a mentor. I urge you to be careful about paying tens of thousands of dollars and make sure you link up with someone who has already done what you're trying to do and is currently mentoring others to do the same. 

Are you hoping to own just a few rentals or do you want to be the next real estate millionaire? - It's important to understand that real estate is not a get rich quick scheme. You may only cashflow a couple of hundred dollars per house/apartment, so understanding that, you can gauge how many units you would have to own to replace your income. 

It takes 30 years to pay off a mortgage following a normal amortization schedule. If you get creative you may be able to pay it off sooner, but know that with a buy and hold strategy, you are in it for the long run and you will make the most money when the property is paid off. 

Definitely spend some time on here & listen to some podcasts. Going to your local REIA/meetups is a great way to connect with people in your area.

It's quite easy to buy a few properties, a bit more challenging to buy many. This is not meant to discourage you in any way. It's meant to help you set realistic goals and to hopefully point you in the right direction if you have some loftier goals.

Every millionaire started somewhere! I wish you the best of luck! 

@Gino Gonzales I would encourage you to be careful riding the fine line or joint venture and syndication. What role will they play? Do they have any decision-making power or involvement in the process?

Different attorneys will tell you different things, which is truly a shame, but if your partners are completely silent and are expecting a return, then you are walking on the line of a syndication with comes with additional sec regulations.

Have you promised them a guaranteed return? Have you educated them on the risks? Do they understand that they could lose their money? Things to consider when working with money partners because god forbid things go south, you want to be able to say that you did everything right so there is no recourse to you. I’m sure you are acting with the utmost integrity but stuff happens...

@Arron Paulino I would suggest networking locally at REIAs or meetups and getting some recommendations. When you offer yourself as a lender, there will be all sorts of people that will come up to you, but ideally you would get to know the person that you are lending to.

I personally would suggest a syndication but typical hold time is 5 yrs.

The thing with private lending is you want to find someone who is doing projects year round because if they only do 1 or 2 deals a year and your money is primed for 6 months out of the year, it’s not earning the maximal income. You also want to review their plan and exit strategy and make sure they have a handle on the numbers and the market and have a good track record.

@Nicky Lisewski Im moving to the Philadelphia area. I will have to check them out.

@Victoria Stokes I think most will agree that investing for cashflow is the smartest thing in this market right now and in general.

When you can get appreciation, it’s icing on the cake, but it’s not guaranteed. If you cashflow from day 1, it will always cashflow unless there’s some catastrophic increase in expenses, but it won’t always necessarily appreciate. This will vary largely depending on the market you are in.

@Jeff Jansen exciting stuff! Welcome to the club! What are your real estate goals?

@Nicholas Sheridan, Jr. you can use fha. You only need 3.5% down. I am in the process of refinancing a multi with Loan Depot. They allow refinance up to 95% LTV, which is unheard of for multi. I wonder if they allow the purchase up to 95% 🧐. I'll have to look into that.

But refinancing from fha to conventional with just 5% equity on a multi is truly a game changer for the BRRR strategy!

@Foster Lynch be careful with illegal units. Some towns will make you remove the extra kitchen, etc and convert it back to a 2 unit. Occasionally there are towns that are more lenient and will grandfather it in or allow you to use it as an “in-law suite”.

I would suggest starting with the town and see where that goes. It might behoove you to give the scenario without the exact address so you don’t create problems for yourself or the owner.

@Karan Chandran you could do a joint venture with someone that lives locally in the market you are interested in or try finding a “boots on the ground” person, whether that’s a recommended property manager or a friend who will look out for things for you. You have valid concerns, but I think having someone locally in that market is the best way to ease those fears.

Alternatively you could consider investing passively. Truly a game changer...

@Solomon Stavis you could be waiting forever. No one knows what’s going to happen. There is money to be made in every market. As long as the property would cashflow with all expenses, management, I would say go for it!