All Forum Posts by: Andrew M.

I don't know if these kinds of deals are common. What I will say is these guy's aren't gurus. They don't have any books to sell or cd's or speak at REI meetings.

The two guys offering this program are local wholesalers and rehabbers. I found the program while I was on their site looking for properties to buy.

The program is setup like this. I would pay $5k upfront.

In exchange for this I would get 2 things. Obviously all of it would be laid out in a contract.

1) Approximately 35 hours of instruction. According to them half of this would be reviewing their methods and how they structure their deals in their office. I would get access to all their contracts and scope of work documents and written materials they use for evaluating and estimating costs on properties.
The second half of the instruction would be a series of tours of their current rehab projects ( they said they generally have 10 to 15 going at any time) and properties which they are considering purchasing as flip projects.

2) Guidance through 5 flip projects. I would have to find out exactly what this includes but basically they will help me select a property ( they are also wholesalers so they can also help me source property) , evaluate rehab costs, get comps, manage contractors and market the property at sale time. They can also help me go through the process of getting hard money.

We would split profits on these rehab projects 50 /50. If i finish the full 5 rehab projects with them, I will also get my original 5k investment back.

I have very mixed feelings about this. I know anything where you pay up front is a red flag but I would imagine if it was specified in a well constructed contract it could be safe.

On the other hand I have talked to them on the phone and they were very professional. I would be able to visit them at their office and speak with references they provide of other people who have done the program.

I believe that they are extremely experienced rehabbers and know their market as well as anyone, it's more of a matter of how seriously they are going to take the partnership and if they are going to take the time to work with me step by step on these deals.

Anyway I'd like to hear any thoughts as to how I should approach this or if you think I should just avoid this right off of the bat.

Thanks!

I'm not doing any rehab to these properties besides maintenance, and as of purchase no major maintenance is needed. So if I were to sell at 20 the 10k would be pure profit. Obviously that's not going to set me up for life but it is 100% return per property so from that prospective it seems pretty nice to me.

As far as purchasing the property we already know who owns it. Some old lady in florida. Apparently she is extremely resistant to sell for no obvious reason. I will try to work on her though. Maybe I'll take some unflattering pictures and send them too her in an effort to make her realize how much her property is deteriorated.

The whole row is 7 houses long and I would love to own the whole row over the longterm.

This will be my first big purchase and it's a bit quirky so I'd be interested to get some outside opinions.

The properties I will be purchasing are 3 semi connected row houses which I will be managing for cashflow. My plan is to hold until the medium term and possibly eventaully sell for a good bit more than I paid for them ( the 30k price is a pretty steep discount. My partner is a full time wholesaler says he thinks they could sell for 20 a piece rented out.)

The deal is 3 row houses for 30k total. The houses are located in a lowerclass neighborhood in pittsburgh. If you know anything about the Pittsburgh market, wholesale properties in crappy areas for 10k is not unusual. The three units are separately deeded and are all currently rented out. One is section 8. Current combined monthly income is $1450 which puts yearly gross at 17400. Combined taxes are in the neighborhood of 1800 for the year, very low. Units are in decent condition, one has been cheaply rehabbed the other two are extremely outdated. From an income and cashflow perspective it looks very solid

Here's what make me nervous. The three properties are all part of one line of row houses. Two of the units are connected and then there is an abandned unit and then next to that is my unit. The setup is like this

U A U U.

The U'S are the units I'm purchasing, the a is the abandoned unit. The front porch roof of the abandoned unit which is connected to the porch roof of both of my units is starting to sag. The place is getting worse and worse over time and eventually could cause structural issues to the units I'm looking to purchase. I'm willing to spend money fixing the portion of the porch roof which is not mine but I will only be able to do so much.

My though is that as long as I get my properties highly insured this should not be an issue. This is also the way the guy who is selling it to me had it setup. I'll do as much as I can to have a contractor structurally brace everything and then insure the properties at 50k each.

Am I fooling myself into thinking this can be safely done through insurance or am I setting myself up to get screwed?

After finishing my first rehab/ cash flow property, I'm looking to purchase a a couple more cashflow rentals. Here's my issue.

I'm young and have minimal funds (i'll say around 17k at the moment). I found an awesome deal on 3 currently rented connected row houses in a rough area outside pittsburgh. 10k/ house for 30k total.Gross rents are 1350/month.Seems to be an extremely safe bet as far as cash flow goes if I can get any sort of loan with more than a 5 year term. As you can see I have a significant portion of the money in cash but not enough to buy outright.

My problem lies in the fact that the amounts are too small to do a mortgage. If I was buying one property and needed 25k I may be able to swing it but no-one is going to give me 3 8k mortgages. I have one family memeber who may be able to throw in a couple grand (lets say 3-4) but shes very risk averse and just does not want to get involved (not based on the deal itself, just the concept)

So now I need to raise about 13k or this great deal may pass me by. I don't know anything about hard money lenders but I would be interested to hear if people think this may be an applicable situation to use hard money lenders.I've also heard creative ideas like applying for a credit card cashing it out, and using that as a personal line of credit. Obviously I'd prefer not to do that but if it came down to that and I could swing it in terms of cash flow I might try it.

Still looking for alternatives as of now though so I'd be really happy to hear anyones creative ideas on how I could raise this small amount of funds.

To David Sheeran: I'm considering doing the same thing as you now and I would love to ask you some questions. Is there anyway I could contact you privately (email or phone?)

In general I'm still applying for jobs right now. REI is really the only thing I'm passionate about in terms of a career but until I have gotten to the point where my REI activities can sustain themselves, I'm going to run under the assumption that I cannot rely on that in terms of long term income and try to pursue a "corporate" career. The second things are going well in investing for me though I would put everything else to the side and pursue RE full time.

One thing I'm also torn on is whether to accept lower paying jobs that might give me some experience or more official jobs which would look better on a resume and could lead to a high salary position down the road. I have an offer to work as a leasing consultant for a local property manager but at this point I'm thinking I'm going to turn it down and look for something in the finance sector because first, the pay is terrible, but more importantly because its not putting me on any career path where I could be making any money down the road.

I'm just nervous that I'm going to throw away my current oppurtunities trying to invest in RE and then find out it was a pipe dream...

Yeah I should have been more specific. I'm looking to mainly buy and hold or rehab and hold.

I'm pretty fresh to investing, I'm in the middle of my first deal right now and it was a pretty odd one at that ( a rehab on a purchase option with a plan to use the rental income from the property to pay for the property itself.

The deal is finishing up right now and although I'll probably end up making very little money with it I have learned A TON and I am ready to start investing more seriously.

I'm pretty strapped for startup capital due to having extremelyy low job income but I do have about 21k in mutual funds right now that I could liquidate whenever I want and probabably have about 17 after taxes.

One part of me wants to liquidate it immediately and leverage it into a decent first property ( or two) but one part of me thinks that I should save this easy money until I have more experience and I'm less likely to squander it.

If i do save it, it could mean waiting years until I have a career which can provide that sort of discretionary income to start with ( I just graduated college and don't have any serious long term job offers yet).

So, I want to hear some opinions on how wise you guys think it would be for a young person to throw in everything theyve got with relatively little experience

This is actually something I posted in another forum. I wanted to get perspective from people inside and outside of the real estate world.

Background info: I'm 22 years old and graduating from college in about 2 weeks with an econ degree and zero debt except for about $3000 to pay off on a car. I have about $3000 in the bank that I have saved and about $15000 after taxes in mutual funds that I just found out had been saved away and maturing since I was an infant (i think about 4k was put in initially).I have really good credit (750ish) although there's not a ton on it.

Essentially I am in a very secure financial position for someone in my age and position and definitely consider myself blessed because I have gotten some help. My parents are not rich but are very intent on supporting me financially. They will pay for all my food and and probably my cell phone for another year or two maybe but I basically told them I don't feel comfortable doing it anymore and that I'm cutting myself off after graduation except as a really last resort. On a side note I'm a pretty cheap date and have no problem living an extremely frugal lifestyle for several years while getting started.

My basic options I'm considering are:
1. getting some type of salaried position with an investment firm or something similar as an investment analyst and probably starting out around 40-50k and some benefits.

2. Keep my current job working at my university's rock wall making 8.25 to support myself in terms of housing and food and begin investing in real estate. I will try to upgrade to some sort of position where I'm getting 10 to 12 /hour and closer to full time or maybe a server position.When I say real estate it would be some combination of wholesaling and purchasing and managing rental property. I would probably also start working on getting my broker's license.

I have interviewed for several positions already but haven't heard back on anything but at this point I have basically decided that even if I do get a position that I'll turn it down. For one thing I just don't think I'm cut out for the corporate world. I feel like being a cubicle jockey sounds really mind numbing and that if I pursue the investing and it works out it would be a much more fulfilling and interesting career / lifestyle.

The other thing is I'm not signing up for some midnight "Buy with NO MONEY DOWN!!!!" infomercial or something like that. My current landlord has been investing in real estate for about 7 years now and does really well for himself. I told him at the beginning of the year that I was interested in learning what he did and told him that if he ever needed any help I would work with him for free just so I could gain some experience. He basically gave me way more than I bargained for and walked me through the purchase rehab and management of my first rental unit which I have agreed to give him a portion of the final profit on. He has agreed to continue to mentor me and as one of the bigger wholesalers in my area can essentially provide me with a never ending flow of obscenely cheap property. I haven't offered it to him yet but I will probably offer him a small portion of all cash flow and profit I make during for my first two years so he has a really big incentive to invest time in mentoring me. On a side note hes actually a really good guy, and definitely not the grimey sleasy type that people tend to associate with real estate investors and I have a fair amount of trust in him.

My thought is that if it works out I could be starting on the path of a really cool and fulfilling career and setting myself up for financial security and if it fails I'm only 22 years old and I still have a degree to fall back on. On a side not I have decided not to take any money out of my mutual funds during the first two years so if I screw up during the learning stages I don't squander what I do have. If things go well I'll dig into that for capital in the future.

Am I crazy? Stupid? Making the best decision of my life? Tell me what you think.

I was wondering if I could get any idea of what to expect for my first REIA.

Mainly I was wondering if you would advise dressing business casual. I want to come off as serious and professional but don't want to be the one weirdo really over or under dressed.

Would it be a good idea to already have some business cards made up and what the hell would I put on one if I did (considering I have essentially zero real credentials)

Yeah I'm an econ major so I've got that pretty much covered.

I'm going to see if I can sneak into a business management class.