All Forum Posts by: Ray Johnson

@Bryn Ebert @Chris T. is correct, I've seen a lot of people pay for mentor programs only to quit when success doesn't happen quickly. Depending on your background you'll have a better idea as to where your weaknesses are in the REI sector. What are your strengths, analysis of the numbers, construction/rehabbing? What would you be seeking from a mentor?

@Vlad Morel I've only ever invested in major metropolitan areas, Class A, or B neighborhoods, the last downturn I never had a vacancy for more than 30 days, never had a late payment, and have never had to evict a tenant. I think being in the markets I'm in are the reason. These markets also allow me to be more stringent on the tenant selection process and not have it affect the tenant candidate pool. This is my strategy for success in good or bad markets

@AL DURAN I think we will see different numbers depending on where you are in the country. During the last downturn, I was in Newport Beach, CA and the downturn was minimal compared to other areas in Orange County like Santa Ana, Fullerton, etc. The Midwest shouldn't see much of a dip dollar wise but because everything there is extremely cheap it will reflect as a higher percentage drop.

@Joe Ferguson there won't be an issue since you've had consistent employment and your new income will be the same or higher. The bank will call your new employer to verify your income, they will also ask your new employer to verify your income in writing. If you have an offer letter for new job that will help if you apply for the loan before you get two months of paystubs.

@Alisha Decoteau @Robbie Reutzel pointed out the most important thing, Get actual numbers. When dealing with a portfolio purchase, you can't assume all things are equal with all the properties. You may have some terrible properties the seller is trying to unload within the portfolio and this is an easy way to do it if the buyer doesn't know how to analyze a portfolio deal properly. Ask the seller if you can sign an NDA to have access to the actual expenses broken out but property. You will want more information on each property within the portfolio and analyze them separately to ensure you're not overpaying for any of the properties as part of the portfolio deal.

@Michael Yan A deal that is "hoping" for cash flow in year one, and again "hoping" for cash flow in year two tells me this is not a good deal, you should never be "hoping " for anything is a deal, if you don't have solid numbers in your deal you're speculating and hoping this turns into a good deal over time as you hold it. Also, this is Baltimore, you should not be bailing the seller out of a bad property in Baltimore at less than 5% in return.

@Will Grabert I use the MLS for the most reliable numbers on rental comps, I've looked at Rentometer, Trulia, etc.. because they aren't as accurate as the MLS I use it as my target.

@Charles Borrelli @Stephanie Irto is correct, don't try it. As an investor I purchase the Owner Occupant properties as a way to get an advantage on a property before it gets to the investor pool of buyers. I actually do move into the properties since I wouldn't commit a felony for a 1% lower mortgage rate and a $30-$40k discount on a property. Since my latest acquisition was 3 miles away from my previous primary residence, I was asked by the selling agent representing Bank of America, and grilled a few times by the underwriter at Wells Fargo who I got the home loan from about making sure I was going to use this as my primary residence, I had to sign affidavits for both banks stating it was going to be my primary residence. Interesting incident happened a little over a month after living in the property, a woman knocked on the door saying she was going to rent a property in the area and wanted to ask me a few questions about the area, she asked how long had I lived in the home, was I renting or was I the homeowner, if I liked the area, and my name, I closed the door and looked out the window and noticed she got into her car parked one house over and drove away, I have a feeling someone may have called that Hotline to report possible fraud. I've purchased 4 REO's this way so I don't blame them for being suspicious.

@Pavel K. you will want to get the lowest payment possible since your HELOC payment will be a part of your new DTI ratio for the 30 year Conventional loan on your new soon to be acquired property. I've thought about doing this strategy but haven't needed the funds yet, it may be an option later if needed.

@Bryan Korf @Trenton Miller it's definitely on the MLS, it's what I use when searching for a property for my buy and hold portfolio. I get comps for the property sales and the property rentals before I purchase the property