All Forum Posts by: Andy More

"Given the current low 30 yr rates why not finance the SFH @ then use the surplus cash you have to leverage your way into investment RE. "

I'm probably only going to be flipping 1-2 properties per year so this cash would likely be sitting idle in a bank account earning nothing in between flips. If I used the line of credit to finance the flips, while im in between flips I would have the benefit of having no mortgage payment. To me it seems like a win-win. Either the money is allowing me to not have a mortgage payment OR i'm using it to make money flipping.

My wife and I recently got a divorce. For that last several years I have done very little real estate investing because she didnt want me to do it and wanted me to focus more of my time on our family. Well, that didnt work and I am now divorced and want to get back into real estate investing. The good news is I have alot more time to devote to real estate investing, the bad news is I have 1/2 the money as when I was married.

When I was investing more actively I found that I made the quickest and easiest money when I found a deal, paid cash, and guaranteed a quick and simple close for the seller then quickly flipped the property for a profit. So, this is the plan I want to continue with going forward.

Here is my plan to move forward, I'm asking you guys to shoot holes in my plan and tell me why this isnt a good route to go.

I want to buy a single family home to occupy for lets say 170k and I want to pay cash. After purchasing for cash I can take out a line of credit with my local bank up to 90% LTV and the rate would be adjustable and based on Prime. So, if I did this I could have access to about 150k at a moments notice to buy a real estate DEAL whenever I found it and then flip it for a profit. So, when I wasnt in the process of flipping a property I would be living mortgage free.

One side note, i'm 35 and have an equivalent amount of money in the stock market so this if things went bad with flipping I do have a cushion in place. I have no other debts and work a day job making decent living.

I was originally thinking of putting most everything in the stock market, financing a house to live in at 80% ltv and then just liquidate stock to flip rentals. But, the idea of moving a large amount of money in and out of the stock market does not seem like a smart thing to do.

Can someone tell me why this isnt a good idea? Any comments welcome.

I believe if another lender pulls their credit within a 14 day period it will NOT count as another inquiry for the reason Bill said. What their credit score?

Bills comments may sound sarcastic but I would say his comments are very accurate.

"I could never get it wrong". You will get it wrong. The majority of highly paid and highly educated money managers cant beat the maket so the odds that you will is highly unlikely. The odds that ALL your investment choices will be good as you suggest is ZERO in my opinion. Dont believe me? Make 5 stock trades and report back you results.

The good news is if your determined to pursue this "strategy" you only stand to lose $2500 of your money and will probably learn that picking consistent winners in the stock market is not only unlikely but nearly impossible.

Warrent Buffet, one of the most successful investors ever, has had a lifetime return of investment of something like 23%. If you make one investment per year of $2500 and sell that investment at $3000 like you suggest you will have a 20% return on your invetment. Doing this twice per year will put your annual return on investment higher than one of the most successful investors of all time.

Good luck :)

Anyone out there making money in unimproved acreage whose primary use would be for recreation(hunting, camping etc....)?

I have invested in multi family property for about 6 years and feel like i've done pretty well with it. I've gotten lucky and have been able to purchase some multifamily property at significant discounts to market value and have been able to flip for a good profit. Is it possible to do this with recreational land(50-100 acre range)? I dont see why not? Anyone out there flipping acreage successfully?

I assume the principles of looking for the land to flip would be similar to multi family property. Know your market(prices), have cash, be able to act FAST, market and network in search of motivated sellers .

Any advice?

Willingtolearn,

Thanks for the detailed info! Even at 20/month at 200/deal with expenses that is still not good money IMO.

If I was working for another appraiser I assume I would have to split that 200 60/40? Is this correct?

The one appraiser I spoke with said the company he works for only does business for 4 local banks in town who are not required to use AMC's.

Also, I think I would prefer to focus on commercial if at all possible. I assume the pay on these is better since commercial lenders are not required to use AMC's

With that being said, even with the AMC's in place, dont you think the market will eventually even out. Most appraiser wont work for 20k a year I assume, therefore the bidding process will be less competitive and the prices will go up. What % of the appraisal cost is the AMC taking? We typically paid $400-$450 to the AMC, are you saying they get half?

Thanks

After 9 years of being a loan officer at a mortgage company I am now without a job. I'm not real interested in finding another loan officer job as I was a quite burnt out at the end. Commercial or residential real estate appraising is something that I think would fit well with my skills and interests.

I've got a degree in finance and relestate, owned rental property since 2004 and worked as a loan officer for 9 years.

My question is, what kind income do appraisers make on average? I have spoken with one appraiser locally but thought there might be some appraisers on this board that could offer additional insight. Thanks

Bryan, thanks for the reply. I'm not specifically looking for turnkey properties in good condotion, I'm looking for anything that i can get a deal on. This other post I started explains in more detail. I would love to get some replies on this other post!!!!

http://www.biggerpockets.com/forums/73/topics/60551-results-of-2nd-mailer-looking-for-multifamily-flips

I had the same concern as you at one point. The salesman said the smooth tile would not be an issue when wet. He was wrong, I wiped out big time within a week of being installed becausese it was wet. After this, I will never use the smoother tile again for floor surfaces.

Thanks for all the responses! However, let me clarify my question. I was not asking if I should apply a flat profit(20k) to all deals. I was asking what is the minimum amount of prifit you price a deal at. For example, if you could buy property that would have an ARV of 40k, would you still be happy with a 10-20%(4-8k) profit? I wouldnt. 4k profit is way to little profit, and too much risk, to waste my time on IMO. What minimum profit would you pursue this deal assuming no renovation? 10k? 15k? 20?

Thanks