All Forum Posts by: Bryan Casteel

Some great advice from all here. I have had the best experiences with the small local banks. These are banks that usually only have 1 or 2 branches and the lending decisions are made by the owner or President of the bank. You can really develop a strong relationship with these types of banks once you prove yourself with a track record. It is pretty cool to walk in and they all know you by name.

What I have found around Cincinnati is that the small local banks each have a niche that they service. One is set up for lending on rehab properties, another on landlord properties (1-4 units) and another on development projects. These banks specialize so that they can service that niche the best but they don't usually do very well servicing the other niches.

Watch out for bad service though. I am dealing with a Savings and Loan bank right now on a commercial deal and they are really falling down. The loan agent I am working with can't get anything straight and it is taking VERY long to get everything through. I will not be using this lender again because I can get much better service other places. Remember that they are the lender, but you are still the customer.

kbedwell, I have seen a couple of posts here recently about estates. Can you let us know where you were learning about this? I recently saw a guy in our newspaper that was doing a 2 hour sales pitch on capitalizing on estate homes. I don't know his name, but I wanted to go see him but I couldn't fit it into my schedule. Did you see someone like this at a local meeting? I am curious of what he said and what the sales offer was. Thanks for your help.

Thanks Josh, I have all of them except your FIRST one - a mentor. I have gotten this far on the gurus that I have purchased book/tape sets from, but I am thinking that I am reaching a level that might need a mentor's help to move above. Hmmmm, something to think about.

By the way, it never hurts to have a Leprechaun on your side as well :D

Outstanding post Sunrise. I am in total agreement with you and this is how I run my business. I have NEVER done any work in my homes, I just buy them and tell my GC to let me know when it is done. Beyond your team, I have also gone to hiring most of the crew that I need for all non-licensed work. I still sub out all licensed contractors (i.e. roof, HVAC, electric, plumbing,etc.) because these guys carry very high workers comp insurance that I don't really want to pay. Hiring the crew and the GC full-time on staff has really brought my contracting bills way down. The only risk with this strategy is that you have to keep them busy or they will start to get expensive.

I have heard of these "professional renters" that seem great until you put them in your unit. They know exactly how to work the system for the maximum amount of free rent.

The best system out there is the judicial system where the eviction goes on their permanent record for all to see later.

This is why you have to do your homework before renting and run the background checks prior to renting. Theoretically, if you run the background check you will see the prior evictions. Also, you can ask for the last TWO landlords and then call the 2nd previous one. They will tell you the truth. If you just rely on the current landlord for information they could be lying to you just to get the renter out of THEIR hair.

These parasites can pop up anywhere.

I read a disturbing article in the New York Times about people buying properties from online auction sites in areas that they know nothing about without doing any homework. This article is very important for anyone to read that may be considering buying a property from an online auction site. The article can be found at:

http://www.nytimes.com/2006/03/11/technology/11ebay.html?_r=1

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This article bothered me quite a bit and I decided to RANT about it on my website. Here is my conclusion:

The bottom line here is that there is no one to blame but yourself for any bad deals that you get into. Don

Oops, I guess DWF would be Dallas Wort Forth. That is where I want to go.

Mede, you have all the right ideas. You are right about the small chunks of cash from the downpayment on lease/options. You could probably expect about 2% of the option purchase price as the option premium downpayment. Depending on your market, this may get you your $3K to $5K with one or two deals. Also, you are right that over time, doing the creative deals (or what I call the "Pretty House Strategy") will build up passive income and chunker income at the same time. It is actually an exponential growth curve if you put one of these deals into your portfolio on a regular basis (i.e. one per month). After about 2 to 3 years, you will have a huge income.

As far as wholesaling properties goes, it takes the least capital of all (usually just enough money to put down an earnest check that you will get back on top of your profit when you sell the contract).

A good wholesaler will make from $3K to $7K per deal in the inland markets (i.e. the Midwest). I think the numbers are a little better on the coasts. So, if you average $5K per deal and do 3-4 properties per month that would be $15K to $20K per month. You will have some marketing expenses and the rest is yours to keep. Not a bad living, but it is hard work.

Give us the numbers so we can help.

Way to many investors try to bully their way into these deals. They get the home owner in foreclosure very scared and feeling like they have to just jump on whatever deal they are pushing. In my opinion that is a terrible way to conduct yourself.

It is much better, and a lot easier, to build repore with the home owner by educating them on the process and helping them in their time of need. You will get a lot more satisfaction as an investor that you will be helping someone instead of just pushing them around. You get more bees with honey than with vinegar.

[thanks DWF and great addition to my post here]