All Forum Posts by: Nick Versetto

Four questions to ask and answer yourself before proceeding: 1) Have you fully considered what happens if you lose what you take out with a line of credit?  2) What happens if you lose all of that, but still need more to pay some sort of expense?  3) What happens if you lose your job, perhaps at the same time something else happens?  4) Will you be able to sleep at night with all kinds of debt?  The real estate seminars, clubs, books, and so forums are loaded with success stories, but far fewer of the people who fail can or will write or talk about their experiences.  This does not mean avoid risks, but it does mean take calculated risks. 

Risk is not static.  At one time we had mortgages on nine rental houses and our home, and negative cash flow on several of the rental houses.  We had the resources to do that (savings and income, various types of insurance), and watched the marketplace, selling all but two of the rentals just before or at the peak.  No great crystal ball capabilities on our part, just watching and considering the possibilities.  When the risk of keeping them passed our threshold, they were sold.  Overall we made quite a bit, as some had appreciated sharply, while others were even or down.       

Nick Versetto

Seller financing can allow you to build a nice portfolio very quickly with very little money down.

Here's a thread where I discuss how I buy. I'm set to close a 12 units deal either today or in the next few days where I'll have less than $1500 out of pocket to get possession. That includes getting my insurance started.

http://www.biggerpockets.com/forums/311/topics/125040-how-do-you-scale-your-business-so-quick

Congrats on the campaign and people calling! Ask them everything. Is it owned free and clear? What do they owe? What deferred maintenance needs to be done? What is it rented at? What are the expenses? Why are they selling? What is the condition? Ask for profit and loss statements if they have them. What is their asking price? Are the tenants on leases? What kind? Being a 4plex comps can be ran via MLS. Try to get that done before you go so you know what it's worth. You can ask most of this on the phone. You want them to have equity and be motivated. You find that combo and you found your 4plex. I would look into some other options other then FHA if you are looking for a low DP some banks offer only 5% down mortgages if you search you can see that the FHA vs Conventional has been beat to death!

@Nick Versetto 

Don't overleverage yourself.  It will potentially take the excitement and replace it with anxiety, stress, misery, and ultimately your failure in this venture.  Save money from your income and current rental to buy another and then repeat. 

 In terms of PML or wholesalers/sellers?