All Forum Posts by: Nicholas L.

@Sam August

HELOC money is expensive money, so borrowing via a HELOC to buy real estate won't work.

@Nick Volz

just curious - are you a HNWI looking to diversify?

no need to share numbers.  but a syndication is not / should not be a beginning investor choice.  as in, i have $25K.  total.  should I house hack, or invest in a syndication?  those aren't equivalent options.  again, it's a diversification strategy.

if that's you, great, carry on.  just figured i would throw this out.  and - a lot of syndications have actually been struggling lately.  just browse the forums here on BP - there are some LONG threads about it.

hope this helps

@Peter Vercellin

it's not crazy, but it's also more difficult, and more expensive, than advertised.  the macro environment for long term rentals (and lots of other niches) is just about the worst it could possibly be right now for a new investor to pick a random market in a random state, and shell out $50K or more to get a random property, and then turn it over to random people you haven't met. and then, the HVAC goes, and your first tenant roughs the place up on their way out, and that $10K turnover eats up your "cash flow" for 12 years. and you are now sad.

so, 

1. don't give up on investing in state.  it's too expensive?  so is the scenario i outlined above.  can you go an hour or two out from Denver?  can you find a niche?  can you house hack?  can you live in flip?  

2. IF you choose to invest out of state, don't pick a random market. pick one you have ties to or know well or can drive to or went to college in or hope to move to eventually or like to vacation in or where you have two handy uncles.  price point alone is not a great metric to choose by and gets new investors burned all the time.

3. read these threads and don't do what those OPs did.

https://www.biggerpockets.com/forums/963/topics/1195280-expe...

https://www.biggerpockets.com/forums/48/topics/1160450-run-i...

https://www.biggerpockets.com/forums/48/topics/1137397-balti...

https://www.biggerpockets.com/forums/52/topics/1010977-12-00...

not trying to be discouraging, just realistic

hope this helps

@Kolin Goff

the short answer is yes but I don't think an increase of 30% is enough to make it worth it - because (A) DSCR loans typically have fairly high closing costs, which will just get deducted from your proceeds, and (b) your rate will probably go up. with that said - sure, call around and see what's on offer.

i recommend The One Brokerage, David Greene's company.  not affiliated in any way, have just worked with them in the past.  they're a broker so they're going to charge their own fee on top of whatever the lender charges.  but IMO they add a lot of value.

good luck

@Christopher Sarter-Soto

it sounds like you're planning to borrow 100% of the cost - is that accurate?

just to be blunt, that is expensive and high risk.  do you have any cash?

@Scott Costello

stay local.  immediately local if possible, within 1-2 hours if not.  no reason to go further away than that - just makes it harder to get started and makes you more reliant on your team, which is harder when you're starting out.

@Peter Vercellin

i would not start with a 'private' lender - not fair to them or to you.

@Rafael Ro

if you are getting numbers from a turnkey provider, they are likely going to be best case scenarios.  and to be clear, that doesn't make them "wrong," or provided in bad faith, it just means - best case. like, no dishwashers breaking over and over for no reason (ask me how i know about that.)

 if you look through the forums, you'll see posts from other folks who bought turnkey properties, and then got crushed by a long vacancy period or a rough turnover...

not trying to be discouraging, just realistic.

@Christian Artuso

you didn't ask but - i would also definitely not start with something where you'd be "one of a few investors."  just no reason to start with something like that - more players = higher risk.

@Christian Artuso

yes - short answer: don't start with a long distance BRRRR.

the more hands-on you can be, the more likely your BRRRR is to be successful. no one is going to QB or PM it like you will - there is no such position as "BRRRR manager." folks have tried to cobble this together among agent, property manager and contractor, and it's always frustrating and higher risk. just to repeat myself: the buck stops with you, not with anyone else.

and, if you don't have enough capital for a BRRRR close by... you're going to have to save up more. no one wants to hear that but it's true.

i have done a few, i did one an hour away and even that was painful.

happy to answer any questions you have

not trying to be discouraging, just realistic