All Forum Posts by: Clayton P.

One thing: you can customize the digits in your number, but when YOU call them, on smartphones they'll see a different city & state you're calling from. Just today I had a seller tell me "so you're in New Jersey but you have a Chicago number?", and you can hear the suspicion dripping off his voice. He's the most recent in a looong roster of sellers who mention it. Just so you're aware it may happen to you, have a nice reason ready so you don't come off just that much more shady. These people are already expecting the run-around by talking to you (unfortunately), so yeah. I just say it's the service I use to text me my voicemails if I miss calls.

1) Depending on what area you're in, go to your local REIA / meetup group & get to know the buyers. 2) If you can build a relationship with a private lender, find a reason to meet the people that utilize his loans 3) use other wholesalers buyers. They either mark your price up, or you guys split the fee 4) I've had good luck with bandit signs... Yellow board, blue ink, post a ghost property or your actual deal if it's jaw dropping enough. You will absolutely get flack for this, from both this forum and your local code officials, but if you actually have something on the contract, you need it sold yesterday, and that can work sometimes.

@Nicholas Armstrong, that arrangement is called Subject-To (taking title to a property subject to the existing financing), and this is not a cut-and-dry process, it will most definitely involve (if you want to be "safe") getting a RE attorney involved to draft the docs and submit them, and it's risky because most residential mortgages have a clause in them that says a change in title of a property they hold the mortgage on would indicate it changing hands, while their loan hasn't been satisfied, so technically they could call the loan due and demand the entire balance at that point. This is called a DOS clause (Due On Sale). It's something your RE attorney will be aware of and be able to explain to you how subject-to deals have changed over the past few recent years... if he can't explain this, drop that attorney.

As far as the FHA 203k renovation loan, can ANYONE get the loan, most likely not, but it is worth exploring - it's geared towards an owner-occupied, first time home buyer (FHA program) and the barrier to entry is worth trying to beat because that kind of financing is really a thing of beauty. Talk to a mortgage lender that understands k's and can help you through it.

Edit: https://www.biggerpockets.com/forums/522/topics/13...

Follow that link to see some of the in's and out's of doing a K

Originally posted by @Rochelle Wilkinson:

Originally posted by @Raquel Baranow:

Originally posted by @Rochelle Wilkinson:

 unlesssssssss we're making some interest on the moneyyy..... I'll help a friend out for a 12% loan put on paper :) 

 You got the right advice with your sheens .. eggshell for your walls, semi-gloss for your trim, and the colors - a light beige or tan, or a white / off-white, etc. It's been said enough but just to reinforce it: Give your tenants a clean slate so they can coordinate their furniture, accent pillows, duvet covers...yadda yadda... the idea is for them to feel invested in the place and dress their belongings to reinforce their idea of home; you just provide the walls.

Out of curiosity how long did it take to rent the pink place? 

Originally posted by @Sylvia B.:

Did you paint the room orange, or is that what they did to it?

 Haha you beat me to it. I'm curious

Like Jeff said, if it gets the tenant to stay 3,4,5 years because it feels like home to them, then that's like best case scenario. Some pride of "ownership" and maybe they'll treat the place better as a whole. Can't be emotionally attached to your paint job, which is hypocritical of me to say because I'm considering doing some 2-tone scheme at my next turnover (which is really not necessary in a rental, right?) 

PS, floors look great.

Originally posted by @Nicholas Armstrong:

The Plan: 

I plan on purchasing a deeply discounted 3/2 house in need of renovation from a motivated seller with the seller financing the deal. These deals are quite easily found in Birmingham if your looking hard enough and you have at least 7k to put down. I know because I have looked at several properties with the owners and I've asked them!  (I thought it'd be nice to get my feet wet, even if I don't plan on purchasing quite yet)

After I purchase the property, renovation will begin which is where my personal funds will be needed. Two weeks before the property is finished, I will market the property targeting section 8 property owners  (Which I know several of myself) and sell the property just after it is renovated. If I can not sell the property within a month, I will section 8 the property myself, and sell the property for even more with a paying tenant down the road. I hope to net 8-12k from my first deal which will hopefully allow me to purchase 2 more properties using seller financing. I plan on repeating this process until I have enough capital to purchase a multi-family property or several single family properties to rent for passive monthly income. 

So here are some of my questions:

1. Should I get my RE license while I'm saving/paying down debt and educating myself?

2. Is my plan realistic by currently investing part time? 

3. Am I missing something?

4. I'm currently renting an apartment. Should I purchase a house for myself before investing? (In my personal opinion, I feel that I should keep renting. It will give me an exit if my first deal doesn't work out as planned)

5. Any tough love or constructive criticism with my (contingent) plan?

Experienced investors, please pour out your wisdom! :) 

Thanks!

 Congrats on the new little one on the way man! Overall you're taking great steps toward your investing. Some little points to help you along.. 

1) Go right ahead with the RE license if that's something you see yourself having time for. Your broker will need some kind of productivity from you & they'll also stiff you on your commission splits at first. Know up front: The RE license teaches you literally nothing on actually making money, buying/selling, talking to clients, etc. Focuses mainly on agency laws and if you're lucky, the ethics laws so you can cover your a$$ while investing & holding a license - it gets sticky while you're new.

2) Your plan is absolutely realistic in the part-time sense. If you're going in the rental income direction, right at the get-go put on paper your: Tenant qualification criteria, Move In/Move Out procedures, your Eviction procedures, your maintenance procedures, and build them all after researching all your state's landlord/tenant laws. Systems will make the part-time investing very possible. Once you have them, buy an external hard drive, and back it up on there and on the cloud, a la DropBox.

3) For your property, work with an agent/get MLS access so you can nail down the Days on Market for your kind of 3/2 and the solid comps. If your plan is to go straight for an investor-buyer, build your numbers & eventual exit price with a nice discount off of that comp number, 20% off is a good ballpark.

4) I'm renting while investing, & here's my approach as I see it, you may see it different :) I split my rent with two other people, so costs are super low, no liabilities, while leaving the credit free for the right mortgage. Whenever repairs comes up, try to shadow the maintenance person & talk about their common issues, how they repair it etc.. things like furnace maintenance, weathering, etc. You will run into these as a landlord and you can save a lot of $ if you can handle it yourself without jobbing it out. 

4b) If you're good at sourcing fixer-uppers, while you're still renting but getting ready to move on, keep an eye out for a beaten-up multi-family, and take it down with an owner-occupied 203k loan - purchase and renovation funds in one mortgage, with a tiny 3.5% down payment. You can use the tips your current maintenance guy gave you, plus the experience from this property you're looking at, and start managing multiple tenants in one place and really take off. This will also help you learn a lot of renovation processes and costs, which is applicable in sooo many niches in REI.

Overall I'd say your approach by going for owner-financing is great, your motivation is great, keep burying your head in books, podcasts, etc, try to meet up with more experienced people and bring them DD coffees, and pull the trigger on some deals! Even though you have a family and that's a huge responsibility, you can take some lumps in the beginning (at your age especially) & still be okay down the road.

He's charging 25k for coaching?? Come on man... This guy, after being in the podcast circuit especially, should know people would see that coming a mile away. Anybody who charges an amount that you could then take and do a deal yourself, is not a good resource. Investing the hours in books and then finding an experienced guy (REIA, local flipper, etc) to help you through the motions : way more valuable, infinitely.

I've been glued to this thread since yesterday, through last night, waking up and opening it immediately haha. Great stuff, a lot of smart minds around here. Fitzgerald Hall , great work bud, this deal is the kind of deal that makes a new person look at REI & get a desire to pursue it.

Originally posted by @Ashley Wolfe:

Originally posted by @Clayton P.:

I gotta say I would sell everything I had & never buy another rental if it meant I could hop into self storage as a result. 

Tell me a bit more about what you've learned about SS as a form of passive income.

 PM'd