All Forum Posts by: Michael Beeman

@Justin Shanahan

I enjoyed your review. It is ironic that the "elite" program costs as much or money as it would take to get into Real Estate. I hope people don't keep spending a ton of money on this stuff. 

@Ericka G.

I am always an advocate of using leverage whenever it involves building a portfolio. However, these 2 deals are not "even" I'd rather buy 4 of the SFR for 50k a piece that rent for 1440/mo, than spend money on a 4 plex, that for some reason is only renting for 900/unit, but literally costs more per unit. The deals are not even.

Have you considered a compromise? Maybe put more like 50% down on 2 different SFR properties that are 50-60k and renting for 1400/mo. You don't incur a ton of debt, you make more money overall, and I would bet, that your husband would probably like that as well. Although, I am a big fan of multi-family. According to the numbers you gave me, SFR is what is hot in your area. I hope this helped, Good Luck!

@Cory Heim

Have you considered the possibility of selling the house, taking the 30-40k in profit and putting it as a down payment on a 3 or 4 plex. Living in one portion of the multi-family unit. Then using the BRRR strategy to really catapult you into the Real Estate industry. This is essentially House Hacking, the nice benefits are, that as a "home owner" of this property, you should be able to get in with low initial investment. It is just an idea, but it solves the issue of where you would live, how to get into the business without a large amount of money, and gets your feet wet at landlording instead of putting tenants into a house that you have put so much effort into yourself, only to possibly make a mistake in your tenant screening process and have them possibly destroy all of your hard work.

@Cris Larreo

In my experience it all depends on the bank. Our banker is a Commercial Portfolio lender, he has a lot of wiggle room on everything. I can do a rehab, and get the property lended. He can cash out refi right after rehab is finished. But a traditional Mortgage lender may not.  My advice. Shop around.

@Jared Dison

Thank you for your service.  Congratulations on this first step. Good luck to you, sir

@Charlie L.

First, I'd recommend reading up and listening to a lot of Ben Leybovich's stuff. you can find him here on BP with a simple seach, or you can find him at justaskbenwhy.com

Secondly, check with friends and family. Your inner circle will often be investing in you. You certainly want to explain your deal. But, it certainly doesn't hurt to ask.

Thirdly, look on BP.. There are tons of articles on how people have actually accomplished creative finance methods. 

Finally. Really study the deal. If you use up all of the above options and no one will finance you. The deal may not be as good as you think. Don't get discouraged. Just look for a better deal. Oh, and binge listen to every BP podcast that includes the word "finance" followed by the words "bank"  "private" (meaning private money, private lender. Etc.  There is a ton of good info out there.  I hope this helps. 

You're welcome @Benjamin Shaw. Glad I could help. 

 The seller ends up in the second position, because your private lender is going to want the first position. Check out my example in my other post.

@Benjamin Shaw

Holding a note (mortgage) are basically the same thing. They are a lien from a certain position on a property. Maybe it will help if i take a property i recently purchased and give you an example of how to use this. As in all instances, definitely do not try to do this without consulting and using a qualified real estate attorney. 

@Ben Leybovich please step in if the following example does not follow your meaning. You're certainly a more qualified and experienced teacher. 

Example:   I want to purchase a 4-plex. I have already evaluated the deal and recognized it is a great deal. And I have multiple exit strategies at the end of it. I know that I do not have the financing. So I find a private lender who is willing to finance 60% of the property cost, but only if he has a first mortgage (note) on the property.  

Now I have 60% of the total property financed.  Next I approach the seller and say, "I would like to buy your property, and I can give you 60% of your asking price up front, and I will need you to give me a loan for the other 40% as a second mortgage against the property"  

The seller may not like this. But, you can help "sell" the idea to the seller in this manner.  "If you (seller) would do this, you will still hold a lien against the property that I intend to manage and handle all of the day to day operations and maintenance issues. You will no longer have to be involved. Plus you will be receiving the asking price (or whatever negotiated price can be agreed upon) in full. With basically 60% of the money up front, and interest plus the balance on the rest of the money."  .. I might also tell the seller, it's kind of like he refinanced his property to get 60% of the value out of it, and he still has no more burden of running the day to day operations.

There are a lot of different way of "selling" the seller on this concept. And, you will probably have to. Most sellers want all of their money up front. But, many sellers realize that there aren't a lot of buyers for their particular property.  And getting 60% up front, plus a 2nd mortgage and interest on the other 40% is an interesting option.  

I hope that helps. Ben is certainly a better teacher than I am. I would recommend really diving into your studying of his and other real estate teachings before making a leap of this kind.  

@Benjamin Shaw,  I don't know why it wouldn't link your name on this. 

But, I hope that I have explained @Ben Leybovich's concept simple enough.