All Forum Posts by: Mike Colucci

Right Randy. What I meant was, from my perspective, there wold limited funds from my end; that's not to say it can't be done, I just need to figure out where to get the rest of the money from. The HEL is really the only place I have to play with  here. If the county property appraiser's  website is any indication of the market value of my condo, then a HEL @ 80% of the value would give me about $75,000; a decent chunk of money, but with some of the preliminary checks I've done in my area, probably not enough to cover a traditional down payment, holding costs, and a reno.

Thanks Randall; so I guess this would be where the creative finance aspect of real estate comes in. I.E. purchasing a property with no or low money down. I'm guessing the easiest thing to do in this situation would be to subtract those costs from the down payment / renovation fund.

Hi Bob, for me there are still a lot of unknowns as first time investor. I still have a lot of things to get in order before I can even think about purchasing anything. 6- 9 months is probably still too short of a time frame for me. Probably going to be more like a year. There is still so much I need to learn first.

@Jason Wray, I was going to use a home equity loan instead of a HELOC because I don't like the adjustable rate associated with it. I was thinking about purchasing a turnkey property until I read Engelo Rumor's and David Greene's posts about purchasing turnkey properties found here: https://www.biggerpockets.com/... and here: https://www.biggerpockets.com/... Both make really good points,but here's my concern. Let's say I buy a property under market value because it needs some renovation; let's also say the reno is going to take 3 months to complete. If I use the HEL as the down payment and for the reno, I now have two loans to pay back, but there is no cash flow coming in from renters for the first 3 months because we have to reno the building. How do the loans get payed if there is no cash flow coming in? Can you defer both loan payment for those first 3 months until you get the renters in? How is this done by others purchasing their first investment property? What am I missing?

Thanks guys. I appreciate everyone's feedback, but I think I'm going to go back to my original plan of purchasing a small multi-family property and scaling up from there. My gut is telling me that's the way to go.

@Jamie Bateman Thanks for your reply. I didn't think anyone would respond for a couple of days. I read your blog post, but I'm still a bit confused as to how it works. If I purchased a performing note for $100,000 and lets say I'm getting $700 a month in payments just to use an even number. I need $50,000 out of it to put towards another note, so I partially sell 5 years of payments to a partial buyer. That means the partial buyer gets the $700 a month from the original note and has control of it for the 5 years, and I take my $50,000 and buy another note with it? Since I only have $50,000, I can't buy another $100,000 note or can I?

Hi everyone, I'm a new investor from South Florida. I've spent the last few hours on various blogs including this one reading about investing in mortgage notes as form of passive investing compared to non-traded RIETs. It seems the safest way to invest in mortgage notes is to invest in performing notes. Assuming the purchased note is deemed a good investment, how does one scale this business? If your doing multi-family rentals the technique is to wait the seasoning period, refinance with a cash out option and go purchase another property. What is the technique for purchasing more performing notes to say increase ones net yearly income to $100,000 or more?

Hi guys, I too had a question about investing in REITs. @Jordan Burnett was asking about publicly traded REITs, but what about investing in a public non-traded REIT for income?

Thanks @Jaysen Medhurst. I didn't even consider the closing costs. It seems like the best thing to do in this situation is to aggressively pay down the initial down payment.

Hi all. I need some help. I have a condo that is payed off and I want to take out a home equity loan to use as a down payment on my first investment property. The property appraiser's website says my condo's "Just/Market Value" is $93,860. Let's assume this is the number used to calculate my HEL; 80% of that is $75,000. So now I will have two separate loans to pay back, with possibly two different sets of terms. How would I calculate the ROI on a potential investment property of let's say $300,000 using the Bigger Pockets calculator or the four box method? I ask because there could be two different interest rates on both the loans. And then would I refinance to consolidate both those loans into one loan after the seasoning period?