All Forum Posts by: Mike Huang

It depends really on your own situation. To me, having 100k in the bank before even doing any investing means you were able to get your financial situation together, usually with some stable income and paying off any debts. I think having that financial status is the point of the 100k.

But if there are ways that work with your current financial situation, then why wait? The time value of money goes down over time so that is the cost of waiting. 

For example, I'm using all my savings for another business of mine and my partners' funds for investing. I built up that relationship, which got me the funds to invest. That was my own way of getting the funds.

This site is great for giving you resources. You just have to really understand what you can do and what you're willing to do at this very moment.

Hi BP,

Due to my partner backing out, I am looking for one or two partners to help fund the downpayment for two deals I have. The properties are 135k and 118k, their respective ROIs are 41% and 51%, I have a management company in place to take over, negotiated so that we wouldn't have to pay closing costs, inspections have already been done and I myself have lived in the area for 5 years so I know the areas pretty well.

Disclaimer: these are student rentals in upstate NY, co-signed with their parents, and are currently all rented out for the remainder of this school year and also have been leased for next year as well.

Let me know if you're interested.

Hi, I am looking for private lenders to assist with buying two properties in upstate NY that have strong financials, an experienced property management company in place already and is in an area I have lived in for 5 years. 

Please contact me for details.

Hi BP,

I'm currently in a situation where my partner is providing the funds for 2 buy and hold deals but does not want to be on the loan since he has been on other deals. My income and credit are more than enough but my loan officer is worried about how to get the down payment funds into my name without putting his name onto the loan application. Is there a way around this?

Some more background, these will be my first two deals in a rental market I know very well. I still live with my parents so we were thinking of declaring the first property as a personal home and the second home as a vacation home. Can we keep saying these are vacation homes in future deals as well?

I have asked the same question to my lender and yes, 401K amounts are allowed to count towards your 6 months reserve.

The amount that would count is the amount you'd get if you pulled out of it. Usually, that won't be the full amount since you won't get your employer's matching contributions unless you met the vesting period of your company. 

The reserves requirement is there for the bank's peace of mind, not for you to actually use unless you absolutely had to. It is true that you shouldn't risk your 401K but if you're on the younger side, it works.

The details aside, if you're thinking about the macro reasons for buying a deal, then think long term. Even when the market corrects, good deals are made when they're bought (management aside). If you're thinking long term, then you'll realize that the correction will last only a small fraction of your potential buy and hold period. So buying wise, like everyone else above me has said, don't worry.

Where I can see your worry being justified is planning for exit strategies. If you have a strategy where, for example, you plan to sell after a fixed number of years as per a partnership agreement, then the timing may not line up well. It may be better to be more flexible and consider more options here.

@Account Closed That is sound advice. The only local I know there is that agent since I'm out of state. Then again, that just means I should be networking more on BP. Thanks for the posts, guys.

You will find a lot of markets that make so much more sense than the insane areas like the Bay Area and NYC but also watch out for the "hot" ones since that's where everyone has gone. 

Also have you decided on a niche?

Hi BP!

I'm looking into NC as a market now and a realtor who's the cousin of a good friend told me that the market there is too hot to really cashflow enough to make it worth investing in the popular areas, such as the Triangle, Triad and Charlotte areas. He has recommended looking at places about 30 minutes out from those areas.

Is this true? How would I go about finding deals that prove the exception to the rule?

Heyo BP,

So I got a triplex under contract in early June; it's in a rather old neighborhood, with most of the houses in the area built around 1900 (very old houses, not much potential for appreciation in the area). The financials were solid, around 2.2k rent every month, all units rented out, and 800 net after all expenses/reserves. We negotiated the price down to 90k flat. Now the thing is that the seller wants to sell as-is.

But here are the following issues.

• Inspection found that the roof was at the end of its life and seller was not willing to fix it. This made me go from using a lender to going with a cash deal.
• Seller has issues with the Health Department several years ago regarding lead based paint. To my attorney's knowledge, this was never resolved. I was also sent a disclosure where the seller signed saying they had no knowledge of lead based paint. Hmm, that doesn't seem right....
• Fire Department came around in April and found 3 pages worth of violations. The seller did not seem to have fixed any of the issues on the abatement and may have kept paying the penalties since then.
• Building Department came around beginning of 2016 and was thinking to downgrade the triplex to a duplex due to the basement unit being questionable.
• I have been requesting several documents to confirm the leases, their Schedule E of tax returns, all the other documents you should request and I've been getting nada after a month of asking.

The numbers are good but there seem to be a lot of issues. When does a deal just stop being worth it when you uncover all the skeletons in the closet? Would this stop you from making the deal go through.