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All Forum Posts by: Scott Hollister

Scott Hollister has started 51 posts and replied 389 times.

Post: Aloha from Maui - New form member intro

Scott HollisterPosted
  • Rental Property Investor
  • Connecticut
  • Posts 400
  • Votes 432

Welcome @Mitch Tempo to the best REI forum out there!

I want to acknowledge that you are looking to better yourself where most realtors lack. I think being able to work with investors and offer meaningful investment advice will bring your career to new heights. 

  • Have you thought of investing yourself? (I think this will offer valuable insight to the process and make you wealthy in the meantime:)

There are many things investor look for. It depends on the investment, commercial v.s. residential. I think just being able to bring good deals to your clients and closing the deal are on top of the list

  • Are you confident yourself to run numbers on investment properties? Or do you know the areas cold where you are a realtor? 

Sitting down with your clients beforehand and getting clear on their needs is a good way to start building relationships. 

Good luck Mitch! 

Post: Borrowing Money from 401K

Scott HollisterPosted
  • Rental Property Investor
  • Connecticut
  • Posts 400
  • Votes 432

Hello @Stephon Shaw,

We just had a presenter speak about this last month. There are two ways that would make sense. (This is the information I was taught, please do your own due diligence to verify tat the information is correct)

  1. You can borrow up to $50,000.00 while paying back interest to yourself. Not a bad deal to play the bank AND invest.
  2. You can take out money for use of downpayment on your home. There may be a "hardship penalty" subject to a 10% tax. (Check your policy for 1 time exemptions) 

Again, I would do your research to see if this is the right choice for you. 

Part 2: Wise Investment Advice:) 

My advice would be to NOT use your retirement account UNLESS you are going to get a better return with the investment you will be making. 

  • This might be buying a home and getting a COC return of 20% while you are only paying yourself 3% interest. Therefore getting 17% return. (More like 23% because you're paying yourself back)
  • Whereas if you just left it in the stock market you might only be getting a 8% return. 

I cannot wholeheartedly advise that you use it for a purchase of a primary residence, once you put that money down on that house it is "useless". That means you cannot access your equity, it is a sitting duck bringing no money back into your pocket. The goal is to have your money go make friends and have those friends make friends. 

Part 3: Best case strategy

Use that money to purchase an investment AND a home. Look into house hacking, you can make money and have a place to live:) Good luck Stephon and remember the options are endless. Just make sure you are being wise with your money. 

Post: One year Lease for current tenants

Scott HollisterPosted
  • Rental Property Investor
  • Connecticut
  • Posts 400
  • Votes 432

Hello @Edward Mikel

It depends on your local laws. Do you have a local attorney that could look this over for you? 

Also, you want the tenants to sign new leases, it is a good thing that he had them sign the addendum. Tell the tenants that you will honor the term with the previous landlord if they agree to your new lease. (Also if they pass your screening test, not sure if they would like this? Maybe another member can comment on that)

Not to scare you but every time I heard someone inherit tenants on the podcasts it wasn't a good story...haha

Advice: 

  • When you do a walk through of the property, meet the current tenants. Do some light screening work as a friendly people person. You can find a lot of information out from a few smart questions! 

Post: I am new and getting nervous about my first buy

Scott HollisterPosted
  • Rental Property Investor
  • Connecticut
  • Posts 400
  • Votes 432

Welcome @Jonathan Wooten

You are in a great position and your goal can be accomplished with dedication and hard work! Which it looks like you already possess these qualities, you're on BP! 

Don't get discouraged with getting shot down, you might find yourself putting many offers in before having one accepted. *Don't sacrifice being a wise investor to just get a property* 

Problem: Finding Deals

  • Have you connected with an investor friendly agent? 
  • Have you connected with local BP members? Considered going to meet ups? 
  • Are you pre-qualified for your first home? (Call Comtrust FCU, see person below)

Big Question: If I were in your shoes...

  • I was just in your shoes. I bought a house hack, then a REO BRRRR cash out refinance, and now Im am working on my first flip. Personally I think you're doing this in the right order! A house hack is the best way to enter real estate investing. (IMO)
  • If I were you I would go FHA on the house hack, keep the bulk of that 40k to get your BRRRR after you have your house hack stabilized. What I mean is that it might need some work, get that done. Get a quality tenant in there, move into your side, possibly find a roommate? (With that FHA loan you will have PMI for the life of the loan, weigh out the benefits and make the best financial decision possible)
  • Then start looking for your next rental. During all this you act like a sponge, listening to all the podcasts, being active on the forums, and reading any book you can get your hands on. Audio books work as well. 
  • Use your money to partner with hard money and cash out refinance out in 6 months. (This can be done! Talk to Dana Bolin at Comtrust Federal Credit Union in Tennessee. They don't have time frames on cash out refinancing) I knew this connection would help someone one day, they have a branch in CT but the guidelines are different. She is extremely nice and I wish I could use them! 
  • Once you have that property, get the work done as fast as possible and don't sacrifice quality. If you get tenants in the house within two months they will pay the interest only loan for you. They will most likely cover all costs until you can refinance, which will leave you in a better cash flow position. 
  • TAXES: Don't be so aggressive on your taxes. This hurt me when I went to refinance. I had too many loses on my house hack and I couldn't get financing. Just be smart and consult a CPA if you need. 

It is GREAT to find off market deals. Just be cautious when buying them as a new investor. 

Don't give up Jonathan! You can do this! 

Post: Wholesaling in Bridgeport

Scott HollisterPosted
  • Rental Property Investor
  • Connecticut
  • Posts 400
  • Votes 432

110 main street

Manchester, CT

06042

Post: Wholesaling in Bridgeport

Scott HollisterPosted
  • Rental Property Investor
  • Connecticut
  • Posts 400
  • Votes 432

Welcome @KinYat Lam,

Feel free to come to our next meeting and network with other REI!

Its December 13th at 6pm in Manchester. Right Trac Financial Group! 

Hope to see you there,

-Scott 

Post: Pflugerville SFH - Advice

Scott HollisterPosted
  • Rental Property Investor
  • Connecticut
  • Posts 400
  • Votes 432

@Tim Phan I understand. You and your fiance want a nice place to live. One of my mentors always said, slow down Scott. Now is not the time for your dream home, wait until you have other people pay for it. And that took awhile to sink in, and is still taking its time but I see the truth in it. We are all here for the same reason. Financial Wealth, so lets do the best that we can with what we have! 

Great Books:

  • Any book that is published by BP, @Joshua Dorkin will agree that they do an amazing job putting quality education out that will help people grow. 
  • @Brandon Turner does a nice job with this list so I won't try to compare with this guy:) ha

Audio Books:

  • Lets throw the BP podcast here because this is the equivalent to a masters degree in Real Estate Investing. 
  • I just finished Grant Cardone's 10X Rules for goals. This WILL make you push yourself, most of the time you will find that your worst enemy is you. So set unrealistic goals because you might be surprised what you can accomplish! 

Just remember to use that dead time to grow and learn. When you wake up in the morning, while you're cooking breakfast, throw on that podcast or audio book. When you drive during your commute or whether you're at the gym. I remember @Jacob Reilly telling me he was cranking out podcasts at every free time now he is doing multiple deals! 

Post: But Seriously, access to $200,000,000.00 to invest?

Scott HollisterPosted
  • Rental Property Investor
  • Connecticut
  • Posts 400
  • Votes 432

@Russ Draper trust me, If I wanted someones opinion on telling me it can't be done I would talk to my middle school special ed teacher or my high school counselor who said I didn't have what it takes to go to college. I appreciate opinions but what I'd rather have is a way, just tell me how it can be done or how its been done then I will figure out the rest:)

Notice how @Brian Burke just showed me a way, he has his apprehensions but he said: here is how its done. For me to fully understand how bigger players do this I have to put myself in that scenario. To see how deals are acquired, how people get paid, what team needs to be in place, etc. 

We all start at the same place!  

Post: how does cash flow increase BEFORE paying off loan?

Scott HollisterPosted
  • Rental Property Investor
  • Connecticut
  • Posts 400
  • Votes 432

Hello @John LaMedica,

Yes he does put in 1% but he said he doesn't spend too much time on "future assumptions". Inflation is more, like he said also but don't spend too much time on this, just put 1%. You are buying the property now, so you should be purchasing a cash flowing money. 

See 13:45 in the video, he is explaining the cash flow per year. So the property is paying you $105.71 per month, that equals about $1200. But in year 5 you will make more like $1500. Remember this is take home money after all expenses, over time you can see it increase. 

Post: Pflugerville SFH - Advice

Scott HollisterPosted
  • Rental Property Investor
  • Connecticut
  • Posts 400
  • Votes 432

Hello @Tim Phan

Please remember that everyone will have different opinions on what investment is wise for their money. I hope I am right when saying: NEVER buy a rental if it doesn't cash flow! 

  • I get that you are looking to build equity but this is not the way to do it. You are putting 50k down on something to lose money? (Take a step back and think about this)
  • Also, can you guarantee that the house will be worth your projections?
  • When you sell your house you will lose large chunks to realtors and closing costs (Assuming its a buyers market) So that 300 quickly becomes less and less. 

On average we have 3% inflation. So that means you need to make AT LEAST 3% return on your money to stay "above water". Thats right, just by keeping money in your bank account or CD means your are losing money if the return is less than 3%. 

My advice is to use that 50k to make money! True wealth is turning $1 dollar into $2 dollars. (Not turning $1 in .95 cents to hopefully make $1.05 in 30 years) There are much better vehicles for making money. 

Sorry if I was harsh Tim:) But I want you to be successful! Have you read any good real estate books lately?