All Forum Posts by: Matt H

hEy HoW's It GoInG....

I got some interesting news this afternoon...

I've done a lot of deals, but I've never actually done a no money down deal. I know it's totally possible, and I know people who have gone beyond that and gotten cash at close.

Well an interesting situation came up. I've been in the process of purchasing this 28 suiter. I got the first mortgage, but went looking for a second. Nothing was happening and I was getting a little worried and frustrated at everything.

Then all of a sudden my mortgage broker was able to find a lender who would do a line of credit on my house based on stated income. I don't have the final ok yet, but it's looking very good so far.

There is a good chance that I'm able to unlock $200k. If that happens then I would be able to purchase that 28 unit with "No Money Down". To me that would be a rather interesting scenario, I'll keep you posted ;-)

That's the whole thing about rentals. If you buy a property that's say for example a house that you plan to rent out. What you got to ask yourself is, "how many units could I break this up into". By doing that you not only make a lot more money but if for some reason someone can't pay rent you still can likely make your mortgage payment because the rest of the tenants will. But with just 1 tenant, if they lose their job and can't pay rent then you have to be the one to pay the full mortgage payment. My friend has a small house. What he did was make 3 bedrooms in the basement. Inside each bedroom he installed a tiny kitchenette. Then the floor shares on main bathroom. Then he rents out each unit often to university students as it's near the school for about $500 per month. Where as a normal bachelor is starting at about $600. So he has no problem filling those rooms. Then he rents out the entire main floor for about $1200. Alternatively he could rent out the whole house for about $1500 max. So you really ought to try and maximize the space if your plan is to hold it. If your plan is to flip it in a few months to a year, to a family then maybe do the same thing but don't bother put in the mini kitchenettes. But I think it's a great way to get started.

Tenants and owners should never live together. As an owner you're at risk because you don't know what the tenant may or may not have in their history. Or what kind of people they are friends with that they're going to be bringing into your house. But also the tenants don't like it much either because they can't be themselves because they're always worried because they have the owner looking over their shoulder continually. So they can't turn their music up, they can't stay up late and all kinds of stuff without fear of having you hear them and not like what they're up to.

[NOTE FROM ADMINISTRATOR - POST WAS DELETED BY USER, CAUSING MUCH OF THIS DISCUSSION TO MAKE NO SENSE - SORRY]

And what will you do when you get an "ex con" living in the basement who knows that the rich land lord is right upstairs from them? He knows when you leave and knows what your daily routine is like, so he sneaks into your house in order to eat your ice cream and pickles.

What a crazy market we have here....

We got all these people who have no experience what so ever in REI trying to do condo conversions of all things, which is pretty much a step up in terms of what you need to know from just flipping and or holding.

So I've been getting these crazy phone calls. I got this one about 3 weeks ago. It was crazy because I'm talking to this ditsy blond. She has no clue what she's talking about or no clue how a condo conversion is done. But is interested in buying my building to do one. Then she's asking me all these questions about how it you'd go about doing it. Oh man! I should have maybe asked her a few questions like "are you single" and "maybe we could meet for coffee to talk about this more" LOL....

But it gets worse...

This number was on my phone yesterday. So I thought it could be a buyer so I call it back. I get this young sounded reggae/gangster type on the phone.

I thought at first as I was asking if he had called that he had the wrong number or something. Then he's like "ya mann, you got dat 15 unit upawtmant fa sale?" so I'm like "Ya actually it is"....

So we start talking about it, and very quickly I could tell this guy has no clue what he's talking about. Maybe another individual who has some money but has no experience whatsoever. And in this extremely hot market that were in here in my city he's trying to get a major discount on the price.

Then when I wouldn't negotiate he get's all mad and says something like....and he actually said this.....

"Ya mann like da situation da vay I see it is dat afta doin da condo conversion, if I paid ya price mann, I wouldn't hav any profit left on da table"

(So I'm thinking to myself...."ya so what don't buy, and if you knew anything about the market I'm already priced about 15 to 20% below FMV. And if you knew anything about condo conversion you'd know the process is going to take a while. And by the time you go to sell them it will be next spring again when the prices will have arisen dramatically, which is when you'll take your profits")

Then right after he said that says to me......"Ya man you'd be screwing me on da deal, whatch wanna stick a f***ing dildo up my a** mann on dis deal or something mann. Well just to put it blunt."

("No that's not putting it blunt. You go stick that dildo up your own *** and get back to smoking your blunt, which is all your good for you gangsta wannabe"....I almost felt like saying to him)

Oh man like I literally should have just hung up at that point, but the conversation was going reasonably okay up until that point. I just thought it was so funny though. Like I'm thinking "wow this guy is gonna do extremely well at this business with those shrewd and diplomatic purchase negotiating tactics he has. not".

Man whenever I get those calls I just think, if I didnt' have this other deal looming in the horizon, and didn't need the money right away, I'd probably do the conversion myself. Rather that let Joe Shmoe come in and make such a big chunk of change. Anyway I just thought it was a really weird and funny conversation.

why don't you keep the pool, that way you can invite some girls over and have a pool party!

I think what happens is that the people who end up making it past their first deal, and actually coming out of it with a good profit, move on to great things. Because A) They now understand what's involved in a flip or in renting and managing a place. And B) they actually made a profit doing it.

But I think if you go into it and you neither are able to accomplish one or both then you'll give up. That was one of my concerns when I first started. In Carlton Sheets course he stressed that when you're just starting you goal needs to be to just do a deal, because once you've done one it would only get easier. And when I thought that through it made perfect sense. So in order to just push the deal through I put down 40%. I know now that I could have done it much differently and would have had to put down much less. But I got the deal done and was able to learn the business. And continue buying buildings. After that I bought and sold 6 buildings, flipped about 5 houses, and working on 4 more deals right now.

But as far as failure rates go, it could be pretty high too because most people have it conditioned into their mind that you need lots and lots of your own money to buy property. When infact you don't if you know how to use creative financing and structure the deal right. Which really isn't too hard to learn how to do.

Just keep making lots and lots of offers everyday. And once you get your license then you can make even more offers and actually write them up on a contract which is even better. You normally have to disclose to the seller that you're a realtor though. Sometimes when you do that you might run into reluctance on the part of the seller.

The key is to just get your first deal out of the way. After your first deal it will get easier and easier. Don't hold out for the perfect deal. It doesn't exists. At this point you just need experience. The experience of doing the deal for someone in your situation is WAY more valuable than the low five figure amount you might net. So just get your first deal done asap.

Sometimes you just got to keep trying, that's all you can do. But if you keep casting someone is bound to bite.

Kpowell....sell to the market of buyers who "have money". They're much easier to deal with and won't waste your time.

Also...

If you wanna to change your finances it takes work. The main thing you have to do more than anything else is start making lots of offers. That's it. Lots of low ball offers. So get acquainted with your local online MLS. Look at properties daily, make at least 1 low ball offer each day. It's like fishing if you bait that hook just right and keep casting, you will get a bite, and you should be able to reel it in. And when you get it in your boat, it might be a really big fish! Then just keep casting out. But if you're sitting around and thinking about it and not taking the key action of making offers, casting your reel, then you won't catch any dinner. So when you go hungry and wonder why? That's one main reason.

And if you're willing to do that then start telling yourself that you're a millionaire. Doesn't matter one bit what's in your bank account or what you have or where you came from right now. What matters is if you can say that to yourself. Your mind will have trouble with that though. But say it anyway. Because what you say about yourself will manifest itself. Then one day you'll be casting and you'll latch onto a deal that makes you five figures, then you'll caste out and you'll eventually get a deal netting you six figures, then again cast, and you'll get a deal making you seven figures.