All Forum Posts by: Nikki Grizzle

I just got thrown off by your comment but I do agree that investors need to educate themselves on the different aspects of real estate. Of course I say that now because I know better. But your average newbie who has no knowledge of real estate and doesn't know anyone in real estate is going to make that assumption. 

There are many realtors here in NC that deal with rental properties. The last meeting I attended there were around 30 to 40 realtors from our area that solely worked with investors that did residential and not commercial. They aren't difficult to find. One thing I didn't do when I started was attending different real estate meetings. That would have been the smarter choice and I probably wouldn't have had such a horrible experience with random realtors and learned a lot more sooner than later.

And yes in NC you have to have your real estate broker license to do any transactional real estate. Prior to investing I thought about it but realized I would have to go through the process of getting my license which I did not have time to do and was not willing to spend the money onf. So I started my own business checking on properties, minus transactional real estate, for out of state investors who collect their own rent, deposits and find their own tenants but still need other services.   

I do believe that you are right about investors being hard to work for sometimes. I know many who walk in thinking they know everything because they read 2 real estate books or watched some videos. The issue is that many do not do their own research prior to inquiring or viewing the property. I will never send my realtors a property without first exploring the area, checking out the comps etc. Many newbie investors just send homes that look good, in their opinion, and expect the realtor to guide them in the right direction or make unrealistic offers. I hear tons of investor horror stories from realtors every week and so yes I can understand why newbies get the boot often.

@Jay Hinrichs I apologize if you feel offended but clearly you are not in the same category as the realtors I am describing. If you are on BiggerPockets then you have a clear understanding of the investor side of real estate. I am talking about the realtors who @Kim Younkin mentioned. The ones that have no experience but will gladly tell you that they can help you. Yes, we were naive because we were newbies and still in the learning process. Many newbies are and they will continue to be naive because they are getting involved in something new. Everything is a learning process and like many know who started out as newbie investors, the learning never stops. The intention of my post was to educate, not to chastise all realtors. I work with a few realtors in different areas that are absolutely amazing! They know us very well and have all information within a week or two, depending on the seller, about the property. At the end of the day we got the deal closed.Although you feel real estate agents should not be used, I would have to say I know many seasoned and retired investors who use real estate agents for rentals and not necessarily brokers. However, everyone has their own opinion based on their own beliefs or past experiences. 

@Kim Younkin Exactly! It's a learning process. I assumed that all realtors were knowledgeable in every market, including the rental market when we first started. It's something that new investors learn over time. I've vetted dozens of realtors in different areas of our state and I could say only about 5 were worth doing business with. As a buy and hold investor that predominately buys tenant occupied homes, my realtor should know, or gather, the basic information we need to assess whether or not the property is even worth looking at.

I had a great time meeting some new realtors and lenders from around NC today while we were out. Found some new lenders we never heard of and even connected with another investor who is doing his first flip. However, my husband and I had a quick and hilarious conversation with two realtors from the same company who obviously had no clue about NC Rental Market. They stated they had a property available that literally provided $0.00 in return. Now, I am no pro when it comes to analyzing but I know when a deal is not a good deal. We payed almost 75% less for a property 30-45 mins away for the same exact rent. I stated that we look for at least $100 per $10000. Of course we learned this from the one and only @Brandon Turner and have never purchased a property that gave a return under that amount. For some reason they chuckled and made faces like it was the most absurd thing they ever heard. The thing is we live in NC so I would assume any lender or realtor would know its not impossible. You can buy a property for 20k in excellent condition and rent it out for $750 2 hours away from the Triangle. Or, you can spend 100k and get the same rent because you want to say you bought a home in Raleigh. All our properties cash flow between $350 and $670. Again, you can find that anywhere outside of the Triangle. So how is it possible that a local realtor has no knowledge of the rental market within 45 minutes of where they do business but a realtor across the state can tell you the market trends for the past 6 months in your area? After a year of investing I realized that not all realtors are as knowledgeable as I thought. Just because they are a realtor doesn't mean they know a thing about real estate investing. I have met many that have never even met an investor. How odd when this place is crawling with them. Now that I think about all the advice I received from other investors, I understand why they would tell me to kick certain realtors to the curb. If a realtor thinks $100 per $10000 is absurd, we cannot do business. If a realtor does not know the rental market 30-45 minutes away, we cannot do business. If a realtor doesn't have a list, small or big, of investors they work with, we cannot do business. Do your homework and make sure they know the investment side of real estate. There is a huge difference in selling a home to a homeowner and selling a home to an investor. 

 Yeah that was the first thing I tried however only 1 property can be under a single loan. It will not let me add one unless I erase the other. This does not work when trying to track both home values, categorize expenses for each home etc. 

@Taron Jackson We used our business cards we received from Midwest Corp for cash advances for down payments. My husband applied with his name only under our business. It works out great if you can get business cards with at least 12-18 months 0.00%. If not, use the cards with the shortest promotional 0.00% apr first and then do a balance transfer from the cards that have 12-18 months. Many investors have said it is the wrong way to start out. However, as a new investor, most banks are not going to hand you a business credit card or line of credit because you have nothing to show. So although we were quite annoyed at the process and not receiving an actual line of credit, it helped us build our business reputation and gave us credibility. For example, we were able to get a card from another bank on our own because we already had business credit cards with 5 other banks. We were only in business for a couple of months, had no tax returns or anything to show but proof of rental income. 

I do recommend signing up for a regular personal credit card and using it as a business card, as you still get the same tax deductions. Shortly after he signed up for the business cards I signed up for personal cards under my name only. I got larger credit lines, better promotional offers and incentives. Two were with banks I have already banked with and the other was with a new bank. 3 new cards and the total credit limit was only about 3k less than what we got with all the other business cards.

So the pros with business credit cards is that it gives you leverage when trying to obtain other business financing as a new investor. It also is a great way for down payments however, you can do the same with a personal credit card and probably get a larger credit line. So I would say sign up for both. You are building relationships with these banks and eventually can increase those credit limits. You now have credit for unexpected expenses that you may not have the cash for such as roof damage, hvac replacement, leaks etc. 

The cons are that you most likely will have to pay cash advance fees on some of those cards for down payment money. You cannot do a cash advance off the entire card. So if you get a limit of 5k you may only be able to do a limit of 1500-2500k. You may have to do several cash advances off of one card as there may be a limit. We had that issue with one bank. They only allowed a certain amount per transaction. So we had to pay a cash advance fee twice.

So,if you are going to use business credit cards I highly suggest you make sure you have enough cushion just in case. Remember that only a portion of that card can be used for a cash advance so depending on the purchase price of your homes, you may or may not have enough credit so you will need to seek more financing options. If you can, get an actual Line of Credit so you can use as much as you need for down payment money. Especially, if that is all you plan on using the credit cards for.

Hope this helps a little.

Congrats!!! Love hearing from the under30 crowd!

@Brad Smith Majority of personal loans will say it cannot be used for real estate. However, so far Ive come across many investors, both new and seasoned, that use them. We have already built a relationship with Sofi and they definitely know that investors are using them. They always turn the other cheek since at the end of the day they know they are making money and building relationships with clients. As far as DTI, primary income is a huge factor. I like personal loans because they are available if you want to do a quick cash closing or competing with other investors who are using banks.

@Nathan Miller Can you use Quickbooks for rentals the same way Quicken does. I want a software that has the loan details, payment details, equity etc with charts. I actually used Quickbooks in the past for work and absolutely hated it which is why I think I chose Quicken since it seemed more user friendly. I use another program to track my bank accounts but not being able to track individual properties under one loan will definitely make me look for another software. 

So far I am really loving the Quicken Property Manager but ran into an issue that I cannot figure out. So we have two properties that are under a single loan. So the mortgage is for both properties obviously. How can I manually put these two properties in Quicken as separate properties under a single loan? It wont let me add a second property under one mortgage.