All Forum Posts by: Matthew Brill

@Patrick Willingham

I believe both groups are free for first time attendees (at least discounted). After that, you could obtain a yearly membership or pay per meeting. If I'm correct, the highly esteemed @Leo Kingston will be the guest speaker this Thursday. Looking forward to it!

Welcome @Patrick Willingham

You should check out the REIA meetings. There is one this Thursday and one next Thursday. Would be great to talk to you and see what you got going on.

Matt

I am new to investing but there are a couple of things I am quickly learning.

1) It is possible to find deals on the MLS if you are specific with your search and able to act fast.

2) It is as much a relationship business as a RE business. Networking at local REIAs, establishing relationships with investor friendly agents, property managers, contractors, wholesalers, and even other investors to bring you business.

3) There is also the REOs, auctions, and courthouse steps.

4) Doing your own marketing like a wholesaler would do.

It is a lot to do but after putting in the leg work you'll get the systems in place that will then work for you.

Hope this helps,

Matt

I recently met with an asset protection/estate planning lawyer (granted not a CPA but familiar with tax implications, and he also invests in RE). I asked him about his opinion on conventional loans utilizing 30 vs 15 year notes; being I have a substantial income and don't need cashflow now, going with 15 year note and getting more cashflow later (less interest/expenses to tax deduct) or go with the overall less cashflow in a 30 year note (more interest to tax deduct). I think his response is what applies to your situation: "Don't let the tax tail wag the investment dog." In other words, go with what you think is the better investment and don't let the tax implications  distract you. 

Another thing to think about reading the lending; even though you won't be managing the actual real estate investment, you'll want to know that whom ever you are lending to has a good deal and will be able to make their payments to you. So you'll still need to be well enough versed in RE investing. Plus, in the event you have to foreclose you'll have to still have an out strategy for the property. You could look into  one of the crowdfunding RE sites to help counteract this. 

Hope this helps. Best of luck!

I would view real estate as your real game. You can give yourself a competitive advantage by being an agent and putting yourself in position to find deal and around others to help a preach your goal. In essence, you'll have better control of your investment. If it were me, I would put my money in a safer investment vehicle, like a high yield savings, until I reached my goal amount and then invest it in a property. In your situation, if you're a savvy enough stock investor or wholesaler to where you're comfortable investing in that regard for a return, then that may be the way to go for you. 

Best of luck,

Matt

@Lauren Baker

Yeah, I get that. I'm not necessarily saying that this property will fall into Ben's "lipstick on a pig" type even if the true value of it is $40. He will hopefully have extra equity built in to the deal but the difference between a $30k and $40k house market wise may not be anything. Still something that has to be considered in my opinion. 

Matt

There is a group of people out there of the Ben Leybovich mindset that throw caution at the $30000 properties. There are plenty of posts out there regarding this exact issue. I'm not sure which camp I fall into but I'll bring it up just for you to think about it. The issue becomes centered around your specific market and the type of home it is and tenant it will attract. I don't know anything about the Peioria Heights rental market but the argument would be that a $30k home will be a "class C (or less) neighborhood" and while you may see good cash flows and rent at the 2% rule, you'll see higher turnovers, maintenance costs, and capex which will ultimately catch up. On the same subject, people in this mindset believe maintenance and capex should be calculated as flat costs based off of square footage or experience in a market rather than a percentage of rents. You are in a good starting position with capex given the recent upgrades. It may also be worthwhile to call around some local property management companies to find out about neighborhood, potential tenants, and property management fees as 7% may not be conservative enough. Again, im not  saying you don't have a deal, just some things to think about to help with due diligence. 

Best of luck!

Matt

Hey @Chris Pace.

Welcome to BP. This is a great site and can be a mentor in and of itself. I highly recommend the BP podcasts. I am new to REI too and have found them invaluable. Also just reading and posting in the forums about specific questions and issue is helpful, as well as the blogs and guides.

There are also 2 real estate investment associations in town that are really good. I have met a bunch of people and received a lot of advice.Millionaire Possibilities meets the first Thursday of very month and OKC REIA meets the second Thursday of every month. You should check them out.

Best of luck. ope to see you around!

Matt

@Mark Waldrip

Have you looked into what other units in the complex are renting for? If these units have had long term tenants there's a chance the rents haven't been raised to correct with the market. I have had bad experiences with HOAs but raising rents could help off set their costs, or if you are able to put the burden of the HOA on the renters if the units support the price. Being on the board of the HOA will give you some extra work but also more control of your investment.

Best of luck!

@Scott Baker @Rhett Tullis @Eric Robinson

Hey Scott. I'm kind of in a position similar to you. I am new to RE investing, living in OKC, and soon to be moving out of state. I am looking at house hacking out of state vs buying a rental property here. I have a couple comments regarding your ideas and what others have said. 

If going for option 1, be careful with the higher purchase price properties since you may be moving. It'll be tough to still rent out the rooms individually if your buddies move out, at which point you want to have the option of renting to a single family and still able to cash flow each month. Along the lines of @Matt Miller

I too have looked at doing the small multifamily route and house hacking with an FHA and have learned a couple things. FHA is very picky when it comes to 3 and 4 unit MFHs making you prove the income from other units will sustain the mortgage which gets difficult since you'll be living in one of the other units and the LTV will be really high. Plus until you refinance you'll be paying the PMI. The FHA route is more attainable with duplexes, a SFH renting out rooms, or with lower price tris/quads (which I'd assume wouldn't be the quality you'd want to live in.

Also, consider that if you are living in the property (whether it be 1-4 units), you could still get a convential loan and pay less than 20%. With fanny Mae/Freddy Mac you could do as low as 5% down for a SFR or 15% for a duplex if you qualify (strong enough borrower which sounds like you may be). You'd still have PMI but your tenants are paying it anyways. Then you could use the rest of your liquid assets to purchase an investment property (which will have to be 20-25% down depending on lender). Keep in mind that you'll need a certain amount of reserves (the banks I have spoken to said 6 months mortgage for the primary and secondary residencies).

You may want to consider shopping around some lenders and getting their take on your options. That and talk to some agents like Rhett to help look for properties that would fit your criteria and help you develop your plan. 

With regard to your third option, I don't think that is a terrible idea if paying cheap rent. You could potentially find two great properties that with cash flow a combined $600 and now your rent is paid for. Consider what your goals are and what will best accomplish them.