All Forum Posts by: Erin A.

Coming to this thread a bit late. Great info here! I wanted to especially thank @Brian Rhodes for the suggestion of shopping wholesale deals around to HMLs. Brilliant. Never would have thought of that. Thank you!

Hi Matt,

Wow, I can tell you've been thinking a lot about this! Very good.

With respect to lenders and mortgage brokers: Yes, they can all offer different terms and minimums based on 1) their company's underwriting standards, 2) whether or not they're going to hold the loan or re-sell it, etc. etc. There's some amount of variation, so you just have to keep calling around until you find someone who has a loan product with terms that will work for you.

Regarding other low-down methods: Though not super common, you may be able to find a property, put 10% of your own money down, get the owner to carry 10% of the loan, and then get a "regular" mortgage for the other 80%. Have you already come across this strategy? If not, it's called owner financing, seller financing, seller carry... do a search on the BP forums for it. 

Why don't you want a partner? A partner is anyone who is helping you do what you want to do. If you want full control of the property and rights to all of the cash flow and appreciation, take on a partner who is going to loan you the other 10% you need for the 20% down payment, and pay them a fixed rate of return. I've heard of this type of arrangement, and it's usually 6% - 8% a year, interest-only paid monthly, with the principal repaid as a balloon payment in 3-5 years (ie: you refinance and pay them back). You can obviously change any of these details to suit the deal/partnership.

I was resistant to having a partner for a long time, until I learned 2 important things:

1. Would you rather have 50% of something or 100% of nothing?

2. Control of a property and its cash flows is dictated by the operating agreement you have with your partners, not by who puts how much money into the deal.

Hi Matt,

I also got started in real estate investing by buying a multifamily (triplex) with FHA. It's a fantastic way to get in with little money down. I also would like to refinance mine at some point and move elsewhere using another FHA loan. One drawback to FHA is that you can only have one FHA loan at a time, so if you want to build your portfolio more quickly than adding a new property every 2 years or so, you'll have to fork over 10, 20 or even 30 percent for a conventional loan. By the time you get to that point, everyone will know you're an investor so you might be able to find some private partners to help you with those larger down payments. :-)

There is a ton of info on BP about low-money-down options. Brandon Turner put out a book on the topic. 

Learn all you can. Good luck!

Hey everyone!

I phoned him this morning, and he was surprised to hear from me (first time we've met). He came over about 5 minutes later (small town... LOL) and I gave him the letters. It appeared as if he didn't remember them, but he seems intrigued. In any case, he was grateful and touched. Good call, BP-ers!

Thanks everyone! Sounds like a resounding "yes" to offering to give them back. :-) I'm planning to call him tomorrow so I'll let you know what happens. And as @Lee I. suggested, I won't mention anything to anyone else who might answer the phone. Ha!

With respect to reading them: I've read only enough to know they are in fact (tame) love letters written from a distance. Though the mystery kills me, I'm content to leave it at that.

It is indeed very, very cool!

Hey BP friends!

My electricians found a bunch of love letters from 1966 written to one of the 3 brothers from whom I bought the house I'm rehabbing, a 1906 craftsman. (He was 17 at the time and is in his 60s now.) 

Since he's still alive, I'm having a moral dilemma about what to do with the letters!

1) I'd love to read them, but it feels wrong since the recipient is still around. What would you do, read them or not?

2) Yes, they legally belong to me, but they're not mine in spirit. The recipient is involved in the local community and I could easily give the letters back to him. Would you?

It's my first flip and I'm a hopeless romantic... hopefully you can sift through my sentimentality and give your two cents! Thanks in advance.

Fantastic camping all throughout Yosemite National Park. You can get there by driving through part of the Central Valley, if you're curious to see what that's like. I'd also try camping somewhere along the Central Coast (Santa Cruz, Monterey, Santa Barbara, etc.) Really stunning views. 

Yes, come to Northern California! The Sonoma and Napa Valley wine country is great (I recommend renting bikes—there are many trails and beautiful scenery). There is a ferry that runs between San Francisco and Sausalito, with exceptional dining and shopping on both ends. You might get a kick out of walking around downtown Berkeley and near/on the UC campus (very eclectic, also with good food). 

With respect to real estate markets... it's generally true that CA is more expensive and tends to have lower cap rates than most other markets in the US. The closer you get to urban centers such as San Francisco, San Jose, Los Angeles, San Diego, etc. this becomes the norm. I've noticed that the lower-priced properties that have a bit more cash flow are in the Central Valley, but that's a unique place with unique demographics & agriculture-based economics that deserves a post on its own. For vacation purposes, I'd stick to the beach towns in SoCal you mentioned or the cities already recommended by others above in NorCal.

I love California. It's my home, and I love to share about it! Feel free to send me a message and I can help you figure out some can't-miss spots that match your interests, whether in the north or south. Have fun!

Hmm... my knee-jerk reaction to a first-time investor getting into speculative multifamily development in a predominantly single-family area is: don't do it. I admire your creative and flexible thinking and absolutely believe you'll figure out a way to take your first steps into REI, but I don't think this would be the most prudent path. Additionally, as @Damien Shoemake mentioned above, the 203k loans are for rehab only, not new construction. 

Now that I've burst your bubble, on to some positive news! I've been hearing a lot about Tennessee. Sounds like there are several good markets there (Memphis, Louisville, etc.) so I think your biggest challenge will simply be to figure out which strategy works best in which area. There are many BP members in TN so poke around the site a bit and see if you can find anyone to connect with. 

You're on the right track! Good luck!

Love this thread! Great getting-started story, great strategy ideas. I also agree about the mentor/coach distinction. 

I, too, got started with an FHA loan on a multifamily property (triplex). FHA has its drawbacks but I wouldn't have done it any differently. Next time around, I want to try the 203k route!

Keep up all the good work.