All Forum Posts by: Ben N.

@Nhi Nguyen 

Thank you, that does help allot!  It's amazing how these little details can seem so intimidating when you don't know where to start, so I really appreciate you laying it out for me.

If you hadn't gathered from my initial posting, I have never gone through the process of getting approved for a mortgage. So if what I'm suggesting is not possible or not legal, I would sure like to know that as well! I am at least 12-18mo away from being able to save up my own down payment. I've just been so excited to get started on my own REI path that it's turned into me trying to figure out some creative financing so I wouldn't have to put off my first buy and hold investment! Any insights would be appreciated.

Thank you Adam...

Based on your response, I would be curious about two things:

1) Would you be willing to share some of the terms that you like to have an agreement on with an investor (either in general or specifically)?

When I find an agent to work with, I want to have a good working relationship with that person.  It would definitely help to know what I should be mindful and respectful of when approaching an agent about being a buyers rep.

2) If we were working together as agent and investor, what sort of interaction and milestones would keep you interested in a continued relationship where both parties are receiving benefit, and on the flip side... what would make you want to walk away?

I realize actions seen as overly wasting your time or taking advantage of your resources would be obvious detractors, but maybe there are some other less obvious things that someone with little experience like myself may be unaware of.

Thanks again for your time @Adam Wright 

Discussion Scenario: say I were looking at purchasing a property for $120k and I wanted to take out a loan in my name with 5% down ($6000). Then I go to a private lender (family, friend, referal) to front the 5% down payment with an agreed upon repayment period and ROI. What legalities would need to be documented in receiving that money from the private individual (and then also in returning the money invested with me, along with interest, to the private lender)?

Personally, I have only ever received money in a paycheck with all the legalities and taxes already taken care off.  So I'm completely unfamiliar with what kind of process is required to make such a monetary transaction legally.  (I know the bank will ask for an explanation of any large non-income related deposits into your personal accounts during the period surrounding your mortgage approval process)  Thanks for any tips or guidance on who to talk to or where start!

Say you're looking for an investor friendly real estate agent to work with you in your target market....but after lot's of searching, finding one with that kind of experience just isn't happening.  Is it worth trying to groom an inexperienced agent for your needs?

Last year, BP put out "The Real Estate Agent's Ultimate Guide to Working with Investors": 

http://www.biggerpockets.com/renewsblog/2013/08/24...

Would this be a good resource to share with an agent inexperienced in working with investors?  (Said agent would obviously have to WANT to learn this angle of the market and be willing to step beyond their normal processes of property analysis)

But for the sake of conversation...

Have any of you had the need to groom an agent to think and work with you the way you needed them to?  And how successful was it?  Any tips on how to initially approach an agent and ask them to learn this?  I'd love to hear from either the investor or agent perspective.

Thanks for your time in considering these questions!

So I have yet to get into REI...I'm in the education phase at present. I also plan to purchase my first property as a live in duplex. But down the road, as I pursue more properties, how valuable would it be to obtain a Real Estate License? What would be the benefits or drawbacks to obtaining a REL? If it is worth it...what are the first steps I would need to take to obtain a REL? How difficult is it? What education is required? (I'm in Kansas if that makes a difference in answers) Thanks for any advice, opinions or direction!

I'm not the voice of experience here, but as someone looking to do the same as you I would have two thoughts...

1) To make the cash flow happen, I would definitely be looking at a 30yr loan vs a 15yr.  At your purchase price of 250k, that's near a $600 per month difference!!!  Also, I assume from your photo that you are also fairly young (like myself) and therefore don't have the necessity for a 15yr loan to be fully invested by a "retirement" age.  And the likelihood is, you will probably want to sell off this property down the road before your mortgage even reaches completion.  Plus, having a lower payment make it more likely that your charged rent would cover more or all of the mortgage.  And if someone else is building that equity for you, maybe it's ok if it takes a little longer?

2) I am not familiar with the prices of housing in your market, but here in Kansas...$250k for a duplex is quite a chunk!  I'm looking to acquire in the $80-150k range (even if that means a little fixing up).  I don't know what your goals are...but I wouldn't go for a higher dollar property your first go around.  Get some experience and make bigger commitments further down the road when you know more what to expect.

Just my thoughts personally, hope they help!  Best of luck in your endeavors @Joseph T. 

It's so interesting to see this posted today.  I was literally thinking about the tiny house movement yesterday in light of all the things i've been learning here at BP.  I only recently found out about the tiny house movement this year, and I have to say that it fascinates me!  I don't know if it's the life style for me, but I could really see it's popularity catching on in the right market.

Reading all the posts here have really got my creative juices pumping on this.

I think it would be really fun to develop a tiny house community here in my home town; buy a large property in town, build a number of tiny homes creatively on the property, rent out the homes like you would an apartment complex (i don't want to say trailer park).  I could see endless ways to make this appealing and marketable to the right people.  And there could be allot of room to have fun with it too.

You could probably build 2-5 tiny homes for the same cost as purchasing a middle class single family home at market value.

Just so much to think about...

@Roy N. that is all good to hear!  Being in a college town, allot of the prospective market does revolve around student housing.  So I'm glad to know I have a good chance at making that a part of my portfolio down the road.  Thank you for your continued insights!

Those are all really great points @Roy N.  

Besides the expanding the family, I am also working a full time job. And therefore, I won't have quite as much time to do as much "managing" as it sounds like student leasing could require. I would love to be able to spend all my time in REI and property management, but that will have to come down the road given our current financial position.

So it seems like targeting properties for non-students would be the best choice for our first investment or two.

My other concern with student properties is how competitive the market would be; first, for purchasing properties that become available, and second, how low profit margins would have to be in order to attract tenants.  I know there are quite a few property management companies and partnerships that hold large quantities of properties, and therefore, I assume, would have a corner on rental rates.  Or maybe I'm just over thinking things...