All Forum Posts by: Michael Lee

@Amul Sutaria

Sure thing - 

Lenders go by the appraised value of the property, and lend you 70-75% of it's value.

In order to do a successful BRRRR and cash out on all your initial capital, you need to make sure you can renovate and increase the value enough so that it meets this "rule", and you can get most if not all your money back and to pay back the HELOC.

If your property appraises for 100k, most lenders will lend up to 70k-75k.

I put the word rule in quotes because different lenders have different guidelines, but if you are looking for a conventional bank product like a 30-year fixed rate loan, Fannie Mae has their guidelines on how much they can lend up to. (and bank money is the cheapest out there)

Hi Amul,

You will want to buy a property that is under market value and do some renovation to increase the value, so when you refinance, you will be able to get your initial capital back. Most lenders on the refi will allow 70-75% LTV, so if you cannot get an appraisal high enough, you will not be able to cash out your initial investment.

So say your purchase and renovation, you spend 250k, the appraisal will need to be at $357k or higher to cash out everything, or else you will have money in the deal.

If you are going to be strictly a real estate investor, you don't need to be licensed - I know many successful real estate investors who are not licensed. For me personally, I like to dive in deep and get to know the inside/out of the business, and real estate sales is a huge part of it, which is why I feel its good knowledge to have. 

Just like for renovations, I like to get my hands dirty at least once, get the hands on experience so I know what I'm talking about before I delegate responsibilities to others. But that's just how I like to learn.

With that said, you know yourself best; if you feel like getting licensed, then get licensed (if the cost and time is not a huge concern for you)! As long as you're taking action and moving towards the right direction, that's the most important IMO.

Hi Bryan,

Did you want to get a real estate license to do agent work? Or are you looking to get into investing real estate?

Depending on your personal goals, you may or may want to get licensed. I am licensed myself and I do think it's an advantage because I know how retail buyers work, I know the transaction side, traditional lender side, etc. My license gives me access to the MLS and I can open my own doors for properties I want to buy. If you plan on actually doing agent work and making sales, it's definitely a good idea to get licensed and work and learn the real estate game.

However, to make money as a real estate agent, it takes time to build clients and working the leads, asides from the fees Natalie mentioned. Most agents quit after 3-4 months into the business, and it's not a get rich quick profession.

Good luck!

This is how I see real estate investing, there are 2 phases:

1) From learning about real estate investing (flipping/wholesaling) to ACTUALLY TAKING ACTION to get some deals done (most people are here). If you have not done any deals, you're probably still skeptical (I know I was).

2) From doing some deals to scaling and doing more deals and building a business around it

If you are at a point in your real estate investing venture where you want to grow and scale up, Justin's group is a great resource. I've listen to all of bigger pocket's podcasts, getting into the flipping junkie podcast, learned from as many sources as possible, but Justin's training takes it to a whole different level. 

I'm a believer that new investors should not drop a ton of money to listen to gurus, if they have not started taking action in their business, because you can get started with all the information you can find for free like BP. If you are still skeptical about wholesaling or flipping in general, joining a program like this will not help you IMO. Their goal is not to get you interested in real estate investing, their goal is to get you from doing a few deals to hundreds of deals using systems (because when you start to do one or two deals, you know it works).

Justin's program, like other members mentioned, is like a blueprint to bring you to the next level. My partner and myself started doing some deals this year, and our goal is to build a real business in flipping and wholesaling. The coaches on Justin's program have done that and are all doing that right now, and they share are willing to share their business model like an open book.

For example, Andy Mcfarland is a coach on the program and he talks in depth about seller financing, how he negotiate and speaks with sellers. I've used his tips for myself to speak with sellers and gotten deals from his methods.

I've also built an efficient CRM using Podio using their blueprint.

I believe it's better to learn from the pros, save myself time learning everything on my own trying reinventing the wheel. What I'm building now has already been built by others.

@George Bittar let's connect, I can share with you some of the things I've learned along the way when I was looking for a brokerage.

Welcome to BP! 

The numbers should be able to help you answer that question! If you can, share some numbers with us (purchase price, renovation cost vs new build cost, ARV of rehabbed properties vs new builds), that way we will be able to give you a better idea whether its a good deal or not. If it is a good deal, you can always pass it along to someone and make some money from it, or partner with someone who can get it done.

@George Bittar congratulations!

In regards to brokerages, do you have plans to do agent work? Showings, listings etc?

Not all brokerages are investor friendly. I joined Silver + Oak because almost everyone in our brokerage is invester minded. One of the partners of this company is an active flipper, and theres a lot i learned from him. You may want to find somewhere that have people you can learn from if your focusIng on investing. Good luck!

Wholesaling in general is very tricky to do it right and lawfully. Im sure if you search, is wholesaling illegal, you will see tons of debates on this forum. With that said, adding a licensed agent into the mix doesn't help. I recommend you do some research on how to wholesale the right way before putting your license on the line. I hear some states crack down on wholesalers pretty hard.

For example, even if you're not wholesaling and you're buying the property for yourself, you need to make sure the seller is aware you are a licensed real estate agent, and you must tell them he/she is selling their property to you at below market value, show them comps of the actual value, and have them initial the comps so they understand what they are getting into. If not, it's an easy lawsuit for them should they want to take the property back, because you're the "professional" and you're the one who "deceived" them. 

To avoid all this, find a good partner who's not licensed.

Hi @Rigo V.

It depends on whether you are including your name as an agent on the mailer. As we learned in real estate school, if you are advertising something from the real estate agent position, make sure you follow all the guidelines that's allowed by the Real Estate Commission (such as including brokerage names, etc.). You should have your broker review the mailing piece before you send it out, as @Wayne Brooks suggested.

If you're just mailing out a typical "we buy houses" postcard with no association of you as an agent, you should be able to do it however you want.

Good luck!