All Forum Posts by: Rick Sheldon

@Shaun Weekes $125K; about $1900

I just received the text message, below, from a potential mortgage broker who is claiming that because the house I want to buy is a 3-unit, I will need to put down 15% for an FHA loan or 25% for a conventional loan... Is he full of $@*T?

"Good evening! I have gone over guidelines for multiunit properties for FHA & conventional with 4 lenders. Conventional will require 25% down payment plus closing costs and FHA is 15% down payment plus closing costs.

So...with that in mind, you will need approx $19,000 to go FHA and $32,000 to go conventional.

Interest rate on the FHA loan would be 3.85%"

Hi everyone,

I have been in analysis paralysis up until I found this deal. I am making an offer today, I just want to make sure it seems like a great deal to y’all too.

Type: 3Plex;

Market: Midwest;

Purchase price: $130K;

5% Down payment: $6.5K;

Interest rate: 4%;

Closing costs: $500

The first unit is a 2BR, 1Bath and has all new appliances and comes furnished. Rent - $800/month

The second unit is currently 1BR, 1 Bath but a second BR can be added to oversized living room. It has older, but nice and clean, appliances. Rent - $650/month

The third unit is the smallest and needs work. I will live in this unit and perform light renovation. Once I fulfill requirements of loan, I will move out and rent for $550/month

Total rent: $2K/month

Based on the average tax and insurance information in the area, the total for mortgage, taxes and insurance should be $1K-$1,050/month. After considering 10% for maintenance and repairs, and 10% for vacancy, I should cash flow $500-600.

I would appreciate any feedback regarding my estimates and assumptions, but also about my plan once I purchase the house. The 5% conventional loan means I should live in the house for a year, but I am curious if a new job out of state would be a valid exception to move out early and rent out the third unit. I am planning to quit my current job at the end of Jan and go abroad for two months. Once I return, I would live in this 3Plex until I can renovate it and find a new job out of state.

Thanks for reading!

Good point Mike! My family is based in Michigan, and my mother is a stay-at-home grandmother, who is supportive of my goals and knowledgeable about rehabs, in her own right. She would be available if you think this is a vital part of the plan. Alternatively, I was hoping to rely on photographs and aggressive negotiations. And perhaps partnerships with local investors. 

Earlier this year, I interviewed and was offered a position with a local wholesaling company as an acquisitions agent. During the interview I had to show that I understood the calling process and how to dig into the details about the rehab costs. Unfortunately they wanted to pay me only 5% of the profits, so I passed on that opportunity.

Hi BP community,

I am looking for some guidance/feedback on my wholesaling plan. Any and all advice is appreciated. 

For some background, I am 25 (M) and I will have $25k saved up by the end of January, 2020, from my sales career. My plan was to switch industries, because I am unfulfilled at my current employer/industry and I wanted to get into selling large scale solar projects to large apartment complexes and businesses because I have a strong interest in sustainability/renewable industry. I already booked a two-month trip to Thailand where I planned to scratch my traveling itch while learning more and networking within the solar industry. Then, I realized, that this could alternatively be a great time to launch my real estate investing career, which I have been learning a ton about over the last year. 

With the $25K, I could purchase about $1-2K worth of leads from List Source, and also cover the following expenses for at least 6 months:

1. $500 / month for family and friends in Michigan to find, skiptrace and send mail to leads using Deal Machine

2. $250 / month for new leads from List Source

3. $250 / month for CRM, phone system and other necessary tools to run the business as a business

4. $500 / month for one full-time VA from the Philippines 

5. $1,500 / month for other personal living expenses

TOTAL: $3K / month

I understand that this business will not take off overnight, even with investing in a VA and the proper tools, but if I am going to launch this business, I would like to give myself the best chance possible at success. I am willing to make money sporadically and work hard to make this work. My concerns are that launching the business from Thailand may not be the best approach, because it would mean relying on the VA to perform quite a bit of cold calling to sellers while I am asleep. Here is how the schedule work work while I would be in Thailand (12-hour time difference):

9am-10am EST: I would be training and speaking live with VA on important follow-ups

10am-5pm EST: VA would be working for me, using the CRM to make and receive calls and texts, leaving notes and assigning me follow-up tasks within the CRM

5pm-8pm EST: I would be calling leads and performing follow-up tasks assigned by VA

8pm-5am EST: I would be able to do tasks that are less time-sensitive, like building buyers list and developing other parts of business

After the trip ends a the end of March, I would return to the US and a more conventional schedule. I am just worried about relying so heavily on a VA this early on and beginning the company completely virtually.

Thanks for your feedback,

Rick