All Forum Posts by: Chris M.

Hey, @Mike Cumbie I greatly appreciate the response!

That's about what I've gathered: if I can do seller-financing I can avoid down payments of 60K or more, which is about what I'll have to pay according to the median prices in my area of Portland. 

I've heard that if you negotiate well enough, you can get a no interest/no balloon payment deal with the seller. However, since I plan to live in this house, I think it would be best for me to avoid Subject To's, wraps and similar strategies in favor of seller-financing with someone who owns their house free and clear: that way I can avoid any issues with the Due on Sale clause... would you say that is wise? From everything I've gathered, buying a house via seller-financing when the seller doesn't own the home free and clear has some significant risks.

Mike, I'm actively working on rebuilding my credit, but the thing is: my business probably won't make enough NET income and my credit won't be good enough for a while, and I really want to start on this journey by next summer, and I know of others who started with seller-financing too.

Can you elaborate on first time home buyer credits? I've heard of such credits, but am unsure exactly what kind of bonuses/credits first-time buyers get.

Thanks again for the response and insight!

Hey guys, I'm on a mission to purchase my first home (to live in, house hack, renovate and eventually rent out completely) by the summer of 2017. Here's the problem: I'm self-employed with a credit score hurt by student loans and a NET profit (income) that probably won't qualify me for the mortgage I would need at a bank. So, I started studying and figuring out how someone in my position could best attain a house, and these are the options I found:

a) Use seller-financing to avoid needing a credit check/big down payment

b) Get my dad or another trusted family member to co-sign onto a traditional mortgage with me to qualify

Frankly, option a) (seller financing) sounds infinitely better to me as I would prefer to avoid banks. But here's my issue: I live in Portland, Oregon, a bustling real estate market with very high prices.

From everything that I have gathered, owners of a home usually won't bother with seller financing in a strong market and that if a house IS offered via seller financing in a strong market, that means there is likely something fundamentally wrong going on... like a giant repair that needs to be done.

Are you guys able to find good seller-financing deals in expensive markets like Portland? Am I way off the mark here? I've narrowed down my paths to buying my first home next summer with either option a or b, most likely, and seller financing seems like the way to go, but I want to make sure I don't get myself into a bunch of trouble by doing so.

Thanks guys and I truly appreciate any feedback on seller financing in expensive/bustling markets. I know many real estate investors started their journey by purchasing a home with seller financing, so I'm figuring I can do it too. Look forward to your thoughts.

Thanks, @Neal Collins, you're absolutely right: I'll need to do a lot of homework on the mortgages, taxes, potential fees etc. for any given property.

Another big reason I'm doing this is that there are a lot of attractive reasons to go from having an external office for my business (which is currently the case) to having an in-home office that would be tax deductible and essentially give me a discount on my house payment.

However, another consideration that I must be careful of is that with seller-financing, a seller can sell the house as-is with possibly a huge number of repairs/some deeply fundamental repair needed. I'm assuming house inspections are even more important with seller-financing deals?

Hey guys, so I am 100% determined to get my first house in the first half of 2017. This will be my first house. I'm a small business owner (self-employed) and won't qualify for standard bank loans most likely. Also, frankly, I'd like to avoid banks entirely, so I've been studying seller financing a lot.

Here's my plan: I intend on treating this first house as a total investment, but will also be living in it for 2-3 years and house hacking by renting out two of the bedrooms. I also plan on moving my business into this house to convert it into a home business, at least for a while. While living/working in the house I will be working on it/upgrading it to gain equity and hopefully the house will appreciate (in the Portland OR metro area it should).

In order to find the perfect house with seller-financing available, I'm studying hard so that I can pretty much mimic what investors do with these kind of properties by sending out mailers/yellow letters to get a bunch of calls/responses and find the perfect location in the Portland metro area. Right now I'm looking at Subject To's or wraps as the most viable route.

Here's my question: are Subject To's/wraps/seller-financing deals too risky for a first time home buyer/investor? 

I've heard of Due on Sale clauses, people potentially wanting to get out of the mortgages that you start paying for in a Subject To... basically I've heard of a few scenarios that sound a little scary that could screw up the entire plan. Are these rare events? Is there anything I should be aware of as real risks before going this route?

To summarize: I'm buying my first house in the first half of 2017. I'd like to buy it with seller-financing (Subject-To's/Wraps) and treat the process like an experienced investor would to make sure I find a good deal. I'll be living in this house for 2-3 years most likely and will be running my business from the house as I house hack it by renting out two of the rooms to help offset monthly expenses. While I live and work in this house I will be working on it regularly to increase the value of the home.

Any feedback here is greatly appreciated guys. I'm pretty much dead set on seller financing as my path now, and it's refreshing to finally nail down a path to take... but now I need to navigate the obstacles and pitfalls on this path so I'm not traversing it in the dark. Thank you to anyone who provides some feedback on my ideas!

@Brandon L. I appreciate it, I guess I should clarify: it's not a pile of irresponsible spending, it's a pile of production bills associated with my business. A wave happened to hit us this month and we are definitely working our asses off to offset it. My head is firmly on earth and knows the reality of the situation, which is why I'm so upset that I haven't been as dedicated to my real estate education lately. There's been a lot going on, but that shouldn't be an excuse not to learn.

@Glenn Tracy I've actually thought about meditation for a long time. Maybe it is time I finally give it a try. Thanks for that. Even though I'm not a religious guy, I feel like I need some form of spiritual fulfillment if that makes any sense. Definitely feeling a need for something more.

Thanks guys..

Man, the election, a heaping pile of bills, having to move again much sooner than I'd like to, overworked.. it's a lot. 

The gym helps.. watching BiggerPockets helps.. but I'm finding it difficult to stay focused on my ongoing real estate education at the moment. 

Thinking maybe I need a mini vacation... five days in Maui? I don't know. Do you guys have any tips/wisdom for stress overload/too much psychological stress? I'm thinking a vacation is long overdue. Considering visiting Japan for a few weeks in 2017.

Thanks for any thoughts on maintaining focus when in tough circumstances.

Hey guys, wow, thank you so much for the abundance of replies. I read through so many different perspectives and experiences on property management and it was truly educational. There were a few common threads:

1. It would best for me to start my real estate investing career managing my own properties to learn the ins and outs of the business so I can better choose a property management company in the future.

2. When it comes to finding the right property management company, my best bet would be to ask other investors, look up reviews, certifications, portfolios etc. before making any decisions regardless of company size, name power etc.

3. Property management won't necessarily be needed for me in the first 5-10 units as I plan on sticking in the Portland metro area if I can. However, once I get past 10 units PM will be something that I'll strongly consider (but who knows, I could end up creating systems to manage the properties effectively myself).

@Thomas S. makes an important point: even if you have property management you still have to manage your managers. However, I will say that this sounds much more preferable to me than dealing with tenants / maintenance / listings etc. On the flip side, I've heard from some that managing properties really isn't that much work overall. Still, for me personally, because I run a successful business in a completely different industry that keeps me plenty busy, I think PM is something I will almost certainly utilize.

You're right there's no such thing as completely passive investing... but I want to get as close to that as possible with my investments. First, it seems to me the best way to learn is to get my hands dirty, buy and manage a few or more properties and see how I feel after everything I've learned. Like I said, PM is still a strong possibility, but you guys have given me a lot of perspectives to consider. This thread has pretty much made me certain that I'll wait on PM until I've actually got some units and preferably a year or more of experience managing properties. 

Absolutely determined to take action in 2017. Right now I'm still renting, so I plan on buying a single or multi family home and house hacking/BRRRing it then starting to buy other properties from there. I'm going to try to buy at least a few investment properties in 2017 and really start going at it. The rest of 2016 is dedicated to education. Thanks again for your thoughts here, guys, truly helpful.

Wow, awesome responses guys, thank you! I'll address each one individually:

@Kurt K. good to know! I'm not sure where I heard 50% gross... I think it was a Rich Dad audiobook of some kind. Maybe I misheard! Yeah, I'm gonna have to ask around... seems like other investors would be the right guys to ask, right? They would know which property management companies are worth pursuing?

@Bruce L. So to be clear: you manage all of your properties yourselves? How many do you manage? 

@Jeff Bridges Thanks, Jeff, I'll definitely be reading this!

@Ned Carey Ned let me ask you this: would you recommend going with bigger more established PM companies, or smaller more localized companies? I'm wondering if the more localized and less amount of units for a PM company means my units would get extra care, or if that means the PM company is less experienced/reliable. Obviously a case-by-case basis, but appreciate your thoughts here.

Hey guys, I'm spending these last couple of months of 2016 to really dive deep into my real estate education, but in 2017 I'm taking action. I like the idea of passive income from rental properties, but I hate the idea of non-passive dealings with tenants, repairs and the other worries that come with being a landlord.

I've heard that property management companies take as much as 50% gross rent, which seems insane... but surely there must be other options? I realize that flipping houses isn't as sustainable as building a rental portfolio, and I'm starting to circle around an idea of BRRR'ing my way to financial freedom. But again: I really don't want to deal with tenants.

I'm sure there's some beginner's guide on property management I should read, but if any of you could give a more real-world answer on why property management isn't something you use or is something you use, that would be awesome. Thanks for any thoughts on this guys!

Sometimes it makes sense to go for minimalism and least amount of effort, there's a very valid argument to be made there. I know that personally if I could sacrifice say 25% of my profit to make an experience  much more painless/smoother/quicker I'd definitely do it in most circumstances. Since I'm a newbie myself I can't tell you how much better of a deal you'd be able to get outside of Roofstock compared to inside of it, but definitely worth examining the price differences. Best wishes!