All Forum Posts by: Marlon Lacayo

 Thanks for the response Wayne. Any idea if it would be legal to be the capital backer but not appear on the mortgage agreement? Obviously you take on the risk that the person you're fronting the capital for rips you off but pretending for a moment that you don't need to worry about it.

 Awesome info you provided! In my estimation the flip would be more of a last resort if something goes wrong and you just need to evacuate. As a new investor personally I would see a breakeven or even slightly negative return acceptable as a learning experience but clearly that isn't the goal.

The ~$400 cashflow does seem pretty good even if you have to pay off the LOC. Do you mind me asking what kind of financing you used for the Line of Credit? Is this is aa normal LOC from a bank based on your income/credit or is this a HELOC or something?

I ask because I anticipate needing to use similar financing for my own first property. I likely only have enough capital for a down payment not including rehab so I need to have a good understanding here.

Thanks again for the info!

 Mind helping me walk through the math/thought process here? Just trying to get used to thinking in real estate terms as I haven't started analyzing properties myself yet.

Sounds like you're likely paying ~$550 - $600 for the mortgage. If the 50% rule applies than you're expecting something like $750 operating expenses priced in to rent.

So we have $1,500 (rent) - $1,300 (mortgage + costs) for cash flow around $200/month, which you'll be using to pay down the line of credit you used for the rehab. 

You also have a potential exit strategy of selling the property for around $40,000 profit less closing costs after you pay off the rehab LOC and original mortgage. This last one I'm having trouble conceptualizing.

PP: 108,700

Equity (From down payment): $21,740

Sale Price: $150,000

Profit from sale: $150,000 - $108,700 = $41,300

Less cost of Rehab Payback = Remaining profit of $3,800 (probably gobbled up by closing costs if you sold)

Does this loosely align with your view? 

Again, thanks for any assistance. I'm just trying to figure out how to think through this stuff.

Hello Bigger Pockets!

I'm a new REI investor looking to get into the rental space, something I feel capable of doing while I maintain my demanding day job.

I wanted to know if it's both legal and a good idea to partner with someone to take advantage of the FHA loan?

I live in San Diego, and so far have little faith that I will be able to start rental business here with my relatively low amount of capital. Could I partner with someone that lives in, say, Phoenix, in order to take advantage of their FHA eligibility?

Basically, I would provide capital and they would live in the home for 1 year, with the house possibly under their name (not sure how this would work in this scenario). After the year they can choose to leave or continue renting. I would ultimately supply the capital for down payment and rehab and pay the mortgage if needed, we would rent out the other units (ideally this would be a 4-plex depending on the market) and then we would split the income whichever way we see fit.

Any immediate concerns with this? Any thing I should look out for or be wary of? Should I only split the income from rent but not appreciation?

Thanks in advance, everyone!

@Philip Gephardt

They is a great, encouraging post.

Any words of wisdom for a new REI who wants to follow a similar path? I live in San Diego and think my market will be too expensive. I plan on going long-distance from unit 1 which makes me a bit nervous.

I'll be reading both those David Greene books very soon.

@Tyrone Marson

Good luck with your renovations! I'm preparing to get into rentals myself and would appreciate some perspective from someone who's just up the road from me.

Why do you say this first deal isn't a homerun? anything in particular you'd do differently with your near term hind sight?

Also Baltimore sounds rich for buy and hold. I'm currently grappling in San Diego and might need to abandon my local market.

 Could you elaborate on our first sentence? What would be illegal about being a wholesaler in Indiana? Or are you saying it would be illegal nationally to be a wholesaler?

New investor here!

I'm trying to figure out my first path. I have a full time job and I'm saving about $2K a month. Trying to decide between flip, wholesale, and rentals.

It sounds like wholesale might be a good route with minimal risk where I can learn analysis and presentation and help build capital.

Any opinions on wholesaling as a first option?

Any suggestions for a full time worker with a full time working wife? I have a very involved job and wont be able to manage on my own. Once I'm back in office it will be hard to take calls.

Am I setting myself up for failure by planning to use a PM from unit 1?