All Forum Posts by: Triston Murray

@Brie Schmidt

 living the dream. congrats! we can all strive to emulate your success!

Hey BP! I haven't posted too much here. But I thought I could really use some advice to get to the next level...

The Plan:

1. Short Term = Buy, Rehab, Sell - Chicago Illinois area, or elsewhere

2. Long Term = Buy, Rehab, Refinance, Rent - Chicago Illinois area, or elsewhere

The Good: 

1.I have a great bank that's ready to finance 100% of given deal (acquisition + rehab costs). They can also refinance up to 80% LTV immediately after an appraisal if I intend to hold. Really nice!

2. I have a great general contractor on board that's willing to personally give estimates prior to purchase and a big enough crew to do quality jobs quickly.

The Bad:

1. The bank lends based on the asset, so they need an address and budget to move forward, I can't just get approval for "X" dollars unfortunately. The turn around time from submitting the budget to getting approval is about 5 days. This means from the moment I find a place on redfin or zillow let's say, I must arrange an estimate with the contractor and come up with a budget, this takes a few days in addition to the 5 days on the bank end. I have missed out on 2 deals very recently because of this turnaround time :(

The Question:

How can I source potential deals more efficiently? Me searching the web is not cutting it.... is this something I should improve upon by myself or would bringing more people on board be beneficial, (like a good wholesaler???! Idk honestly)? I am basically in a position to pull the trigger, but need a target to shoot at. Has anyone ever had similar problems when starting out in RE? How did you conquer this obstacle?

Thanks Everyone!  

@Belinda R. 

 Scary Stuff! As a newbie moving onto flipping; this is eye opening... Thank you for posting you experience. I hope some of the dust has settled since your last posting and your back on your feet! (Or at least moving in that direction)

congrats @Keenon Trevor ! welcome to BP. There is truly a wealth of knowledge here. What kind of info specifically are looking for? ask specific questions in your posts and answers will come. ;D 

WOW! Crazy... In Chicago its the Sheriff. and they show up like 4-5 deep an full armor like storm troopers.

I don't think there's anything wrong with an investor using a calculator to quickly gauge a potential deal, especially if he/she has to evaluate many deals at once.  But the person should have an understanding of how the system calculates its figures.

There IS a danger of a newbie like me using a pre made template calculator to make a decision. For me the work around has been excel/ google sheets, because I develop all of my spreadsheets from scratch I have a complete understanding of the underlying calculations and I know they are tailored to my purposes. However the potential does exist for me to omit certain important aspects accidentally. So I still must be careful and triple check everything.

So basically IMHO newbs can use a calculator, but should understand it... should never base any final decision on it... and always perform due diligence no matter what the calculator says/. Take an excel class if your not familiar, excel will change your decision making life forever.

@Kyle Gregg Like I said i'm not knocking that strategy AT ALL, heck I did it! And I'll probably do it again in addition to other methods to be honest! IT PROBABLY IS PERFECT FOR YOUR SITUATION...I'm just saying in the grand scheme of thing there MAY be a better option. that's a BIG maybe. I don't know you or your investment strategy. But it's a small world filled with many BIG opportunities, this is just a personal revelation I am having and wanted to share with someone who is also new.

For example, that private banker I mentioned in my post, says that simply based on the past relationship between himself and my father he feels confident that he can do 100% (nothing out of pocket) of acquisition + rehab cost of pretty much any investment deal I bring to his table. I would need my dad to guarantee the loan.

Now what if I had talked to this same banker before I purchased my place? Would I have opted for the FHA?... hmmmmm... maybe, maybe not.

My point was less about your strategy and more about my falsely feeling that my options were limited when I starting out. I felt so overwhelmed I was afraid to reach out to people. And all it took was 2 minutes to get the phone number of the guy who can offer 1 more option I can utilize at some point in my RE career. For all you know, your cousins girlfriends dad is the senior underwriter at some private bank that's just aching to lend! Its a small world. 

Sorry if I came off like I was critical of your investment strategy. That's not the case at all!

The right time is when the numbers work :D - I would say that they numbers TEND to work more often when inventory is high and prices are low. But I would caution creating a correlation between the two. Just because there are a ton of properties on the market and prices are low does not make them all good investments, and conversely just because demand is high and prices are high does not make them all bad investments.

IMHO Appreciation is speculative and hard to predict, so each prospective investment must go through the ringer irrespective of speculated appreciation.... and if it works it works. Timing is irrelevant if you buy right each time.

@Kyle Gregg , Congrats! Be conservative and make sure the numbers make sense and you'll be ok! What I left out in my posting is that, if I could have done things differently on my first purchase...(Not really regret but...) I probably would have sought out cheaper SFR's in more rural working class hoods. In the midwest, buy, rehab, rent deals can be had for 30k all in and rented for 500-800, for roughly $300/mo in NET cashflow. I would have to get creative and arrange non owner occupied financing BUT to have similar cashflow with a fifth of the debt is appealing. (At the time of my first purchase, due to start up capital, income, credit etc I was under the incorrect impression I could never get more creative with financing and just went with FHA. Remember it's about who you know!!!)

Using FHA203 can be a very strong investment especially if you buy right and force appreciation through quality rehab work... SO totally not trying to change your mind on strategy, but IMHO it's definitely worth calling around to see if more favorable options are available. (it can't hurt you). The only reason I didn't explore more options was because I doubted myself and thought creative deals would forever be out of reach. When all I had to do was ask around! Open mouths don't get fed, and you'd often be surprised at who you know and what they can do for you.

Let us know how your first steps into RE go!

I would try to us a private or portfolio lender to quicken your growth, @Carlos Alvarado  , (I may be wrong... but) I'm pretty sure private/ community banks that lend out of their own pocket will mortgage you up as many times as they want. Getting you around the 10 loan problem. These same places will likely be able to refi you out as many times as they see fit as well.

We haven't done a deal yet, but I was able to find one of these lenders simply by asking my dad who he banks with. My dad is from a time when there were more private banks, and strong relationship was the name of the game. You actually had to go into the branch office, in a suit to get things done. You knew your banker's wife and children because you treated them all to dinner after your last deal closed, and maybe you even go to the bank's holiday party to keep up appearances/ LOL. For all the conveniences that the internet age has given us, don't neglect relationship building and face time.