All Forum Posts by: Matthew Balter

I just want to emphasize this is not an ad by any means. I just wanted to let people know of an option out there that i was really impressed by.

I was looking for additional education as well as a way to get something that I could put on a resume as I was applying to Real Estate Industry jobs. I came across ECornell's grad certificates and signed up for their Commercial Real Estate one. It cost about $3200 (they will send you a discount code if you look at it a few times) and had 6 classes all 2 weeks long. It did not require a significant amount of out of classroom time and you can go at your own pace and timing. But the way the classes were presented was extremely useful and easy to follow. The examples were very real world and they even provide a lot of excel and word tools for different aspects of the process that I will now use moving forward.

They have more that covered specific parts such as project management, development, property management, etc. I wanted to do the general commercial one as it included a little bit of it all.

Obviously this isn't for everyone but if you are looking for anything to enhance your resume, or to get additional education for yourself in a real world way I would highly recommend looking into it.

I would either one, try to find a more turnkey property that cashflows (although depending where you live that may be tough to find right now). Or secondly, partner with someone that does have the experience in Real Estate investing that has the ability to rehab and identify deals. You could take that second approach as a hard money lender just looking for an interest rate in return or as a partnership where they bring the work and deal and you supply the financing. Make sure if you go the partner route you have a contract or agreement to both the split of equity/cash flow as well as make sure its a good fit with your long term plans if it is not just going to be a flip.

I'd look into the legality of wholesaling where you live. Some states it 's illegal to do in. However assigning a contract is not illegal. I'd make sure the purchase contract you have allows assignment of contract in it. Normally the difference of wholesaling and contract assignment is how you market the contract. But that varies from state to state.

Aaron,

I think it comes down to if you think it's a good long term rental to hold on to. If your neighbors are that bad and you think it'll affect the quality of tenants you can get then maybe it is best to sell to save that 250k in capital gains taxes. However, if you think you won't have issues renting it out to quality tenants and it'll cash flow then I would hold on to it because you can 1031 exchange it if it's now a rental and you don't have to worry about the capital gains tax anyways.

@Jack B.

Sorry to hear about all of that. Hopefully it all turns around soon! 

I know the normal stocks statement is that for every $1 million you have you can take out about 4% or 40k a year without taking down your principle. Obviously inflation has changed that (i believe I read an article saying it would be closer to about 35k a year). Adding cashflow from real estate investments can add to that. But I really think the best advice is to find a wealth management advisor where you'd like to settle down and discuss your options. Make sure they have experience with working with REI like yourself because most REI prioritize having a certain amount of cash on hand as opposed to mostly invested. By getting an advisor in the area you want to settle down they'll better understand local tax laws and also have contacts you may need such as accountants to create a better aligned strategy. Hopefully one thing they may recommend is municipal bonds. As REI we hate when rates rise but what that also does is help the bonds market payout (which most are tax free income). I am not licensed in financial advice so I'm not advising you to invest in anything but these are definitely things I would bring up with someone who is licensed to help you out. I hope my 2 cents helped.

@Anna Marcotte , 

I may not be the best person to answer your 3 questions as I'm also not the most experienced investor but I can give my take. I also went through a similar experience when I purchased my 1st property last summer.

I live in the seacoast NH where property values have skyrocketed. The town I live in any duplex is at least 750k or higher so that was unattainable for me. I decided to buy a place where I could house hack by renting out rooms instead (although you have to be willing to live with other people). I was able to take advantage of a first time homebuyer purchase and put less money into the house and was still be able to get it. I went this route to save more money for the rehab/maintenance needed as well as the fact I would need less money to save up for my 2nd property, because I don't necessarily need to invest in the town I want to live in (cheaper markets nearby). 

A) The BRRRR method works the same either way if the numbers work. The only benefit of it being your primary house is you can put less money down to acquire the property. When you refinance out you can buy a new house to be your primary resident and take advantage of your second property being a residence as opposed to a investment property (turn your first house into a rental).

B) If your doing a primary residence you'll be better off using your own money as there is less people involved in the house you're currently living in. If you go the investment property route you have both options but it'll be tougher to find hard money lenders as a new investor and if you do they may be unfavorable terms.

C) I know people that have done LLC's on their primary residence but it was more as a liability shelter if they were renting out other units or rooms. I personally have it in my name and not an LLC. Although you should look into the terms of your mortgage because if you try to switch it later to an LLC some banks will have that set off the acceleration clause since it's technically changes names. I would be careful asking the bank about that as well because it will flag you as someone trying to be an investor but take advantage of a residential loan.

Like I said take my info with a grain of salt but that's what I've experienced / seen in my time in REI so far.

Quote from @Ryan Moyer:

Plenty of options out there. 2nd home/vacation home loans if you plan to use it yourself some as well. DSCR loans typically will use something like AirDNA to project revenue. Lots of more creative stuff out there as well but those two are the most popular.

 @Ryan Moyer I had the property management company I would use run a report from AirDNA on the property I'm considering. The numbers provided would definitely justify the purchase price. Have you had a lot of success with that as enough proof for financing approval?

I'm looking at buying a vacation rental at a ski mountain. I'm curious on financing for STR's. Bank's generally like to see leases and income data for investment properties but with AirBNB it's not as secured. What advice / tips do you recommend for financing STR's besides all cash purchases to acquire the property? I'm also curious to any examples that you may have? Thanks!

Quote from @Jessica Stevenson:

@Matthew Balter - I think it's more of a matter of which agent partnership is right for you, not IF an agent partnership is right for you.  As a new investor, finding someone you trust who will take the time to educate and explain along the way will be paramount.  Reach out to a few agents and schedule a call simply to chat about your investing goals and where you want to be in the next 5 years (and even more basic, see who you simply connect with - you'll be spending a LOT of time together during an escrow period once you get under contract).  Knowing your goals will be important information to a decent agent skilled in working with investors.  Then, Follow up!  As a busy agent I can tell you that there are many people who tell me they want to stay top of mind, and then they disappear.  

@Jessica Stevenson

Thanks for responding! The reason I asked was for two reasons. As a somewhat newer investor myself I have only worked with one agent for my investments (He was great). I wanted to learn more for future investments if I ever needed to find a different agent for whatever reason (out of state, etc.). The second reason I asked is I am a real estate agent now in NH and will be primarily working with investors as that's where my personal experience and interest is. Any advice that would help provide clients and other agents the best experience would be greatly appreciated. I see you're located in NH and MA. I would love to connect further and discuss as I am based out of the Portsmouth NH area!

Matt

Quote from @Taylor Dasch:

Love this question. I may not be the best investor friendly agent(I definitely try my best) but here is what I do. 

1. The agent comes to the showing prepared with a quick CMA of properties that have sold (especially if on market) to determine the best offer price.

2. Ideally the REA is an investor as well and is familiar with market rents. If the property is a good contender for my client I will typically prepare a quick CMA for rentals to determine a good rent price, I also do a quick CMA using only updated properties to determine the ARV for my client.

3. They should be familiar with different financing strategies, back up plans (flip, STR, MTR, etc.) and inform you on all of them.

4. Availability to show you properties and dedicated to showing you properties and getting you a good deal. - My last agent had none of these other qualities but she drove from Copperas Cove to Belton (about 30 miles) to show me properties and also facetimed me at work to show the property I ended up buying- if I wasnt an REA I would use her again just for that reason. 

Deal Breakers for me : Not available to show properties - Slow Response / Not communicative - always late - 

Another big one in this market is time to write an offer. I write offers very slowly but I am on it right away and thats my top priority. I feel that sometimes an agent will procrastinate writing an offer or forget about it and that could cost you a deal in this market.  

Note that these are for the ideal agent it will be hard to find one of them today since they dont really make too much off the cheaper properties and they typically have to show a lot of them if you are a newer investor.  If you are familiar with your market, in all honesty I would go after a newer hungry agent. If not it is definitely worth the research to find a great REA!

Taylor,

Thank you for responding! It seem's being well prepared and responsive you find are the keys to helping create a good partnership! Especially with the amount of properties you must show investors as well as a lot of them being "cheaper" can make it difficult for an agent at times. So ensuring that you provide a good agent a smooth experience helps keep that relationship.

Matt