All Forum Posts by: Paul Wurster

It is a relatively small amount of money.  As with any turnkey type operator, start small and tiptoe into it.  Make them show you the money first.  Don't get too excited.  

Here is a question, would the radio show hosts bet their reputation on someone that was completely out to lunch? (BTW, that is their second appearance on that show in as many years) If you think not, start asking questions.  

I wonder how much he put into the renovation?

@Joshua Woolls My lovely wife just started calling local banks and credit unions.  The first one we used was recommended to us by our property managers.  This helped us out because in the South, relationships matter more than just the numbers.  Then we presented the income statement for the property.  We showed that it was a great property even with the loan.  

Our loans were 5% interest.  That was a few years ago.  I'm sure you could do better than that now.  The borrowing goes against you personally.  Your portfolio is you.  They are not separate.  

@David Kleinfeld The loan terms were all ~5% interest on 20 year amortization loans with a 5 year balloon.  

Don't go to the banks looking to fill out a loan application.  Go there with your successful business looking for investors.  The banks are looking for you.  As long as your deal is safe and profitable, you are doing them the service by walking in.  I think there is a current blog on running your real estate investments like a business vs a hobby.  That is spot on.  The most successful people have a game plan and work it.  Those who dabble and quit are really just hoping that it will all work out.  

This is what we did to grow our portfolio.  We bought with cash and then did the rehab.  We sought out the loans after placing a tenant.  We used portfolio lenders at local banks.  It was slow at first because we would only get 80% of what we had in the properties, but after a few, we could get 85% of the current agreed upon value without an appraisal.  Emails with pictures and we closed within two weeks.  

Having the property paid off took all of the stress out of the property. Then when we got the loan we made anywhere from 25% to 80% ROI's. One property was even an infinite return because I got $15,000 more out of the refi than I had into the property and it still cash flowed >$300/month.

This helped us grow while we lived in a good rental market.  I know it is contrary to some of the math focused investors here, but we paid them all off with the proceeds of another house sale recently.  I feel like I locked in my gains here.  This secured our retirement, and now all of the money goes toward future growth.  

Steve, I think these details are less important than figuring out what you need to make. (i.e. a goal)  If you figure out that you need $2,000/month from rentals to cover your retirement shortfall, your numbers and choices just need to return $2,000/month.  You can do that with a mortgage or not.  The closing costs are small potatoes at this point.  

All these detail items are skills that you have.  Put your effort toward figure out what you need.  Then you can go find the deal.  

What are your goals?  What kind of cashflow do you need?  

Figure out the return that you need and then go buy properties at prices that allow you to make that return. 

Real Estate Guys Radio Show - I actually got started by investing with one of their advertisers and show guests. (Terry Kerr at Midsouthhomebuyers.com)  

Cashflow Diaries (J. Massey)

I got around 20% CoC with my two houses in Memphis.

I first bought two houses with Midsouth Homebuyers.

They were invaluable for getting me started and showing me how this real estate thing can work. I'm a cashflow investor, and midsouth did start me down the right path. For that, I am thankful. It is a great place to start. They are very easy to work with and very responsive. It is easy to talk to anyone on Terry's team or to Terry himself. If the numbers make sense for you, give it a try. Start small and get comfortable over time.

After having to wait for their inventory to replenish, my wife and I started doing it ourselves.  We make more money on our own, but like @Ali Boone is saying, it is more work.  Buying form Midsouth was like filling out forms for money.  I've never deposited another cent against those properties.  They pay a decent cashflow, but most importantly, they ignited the fire.