All Forum Posts by: Robert Lum

@Jaime Brame When debating whether to invest in a condo, your priority should be to determine if the condo association is well organized and to build a good relationship with them. Take the condo board members out for coffee or lunch and get to know them because they are essentially the governors of the building. More often than not, they have leverage and influence that can ultimately change the way how the building is operated and in effect change your monthly expenses; i.e., determining which fixes in the building get priority, adjusting the monthly common fee charge; and at any time, can hit you with special assessment fees for just about almost any amount they deem fit and necessary for the improvement of the building.

I represented a client in litigation where the client got hit with a special assessment fee for a repair/improvement to several units belonging to the board members despite the fact that the client's unit was suffering from severe damages for years! Needless to say, he was frustrated and litigation ensued. 

TLDR; your destiny is the hands of the condo board. 

@Patrick O. The attorney is there to essentially watch your back by making sure you are protected from unfair negotiations and provisions in the deal/contract, informing you of your legal obligations/entitlements, taking steps to clear cloud on title, reviewing accuracy of the closing documents and be able to explain them to you. For a small percentage of your target investment, paying for an attorney can save you big in the long run.

@Chris K. is correct. Better hire an attorney if you purchase a property out of state. Just because you are familiar with the legal aspects in closing on a property in Philly, that does not necessarily mean the same rules apply in other parts of the country. Every State plays by their own rules.

Disclaimer: Please understand that this reply to your question in no way creates an attorney-client relationship. You are strongly encouraged to consult with an attorney in your county in person about your specific legal problem.

In regards to the younger generation, I think Fannie Mae is forgetting that millenials are having trouble saving for a down payment because they spend their money on avocado toast. All joking aside, even if raising the DTI ceiling will allow more folks to enter the housing market, it is highly risky to take on more loans when wage growth is flat and home prices unjustifiably continue to rise.

@Jerryll Noorden

Your success story is inspiring and I know the best is yet to come. I am driven and burning with desire to get into the real estate investment game. I don't have much saved up by am saving. I also don't have much knowledge with wholesaling and fix/flips, but have been consistently learning. Upon my independent research, I have decided that a good route for me to take would be to start with wholesaling here in NYC. What kind of advice would you give me?

That is amazing. Congrats. What was your first ever deal and how did it go down? What were the challenges? Best of luck to you in 2017, Philip!

Hello everyone,

I have just begun to learn a lot of real estate investing. I have been acquiring as much knowledge as possible about the brrr method and interested in pursuing that. But considering that I am in one of the most expensive markets on the planet - NYC, it is possible but extremely difficult. Hence, I plan to seek opportunities in neighboring States or nearby cities/towns.

My prior concern, as with a lot of people, is my high debt-to-income ratio. My student loans from undergrad and law school amount to somewhere in the $130k range. Thus, I figured it would be nearly impossible for me to obtain any sort of loan (unless I am mistaken?). My current employment salary as an attorney is $65,000.00 without 401k; however, I do get a decent bonus for bringing in clients (a percentage of whatever the firm ultimately bills the  client).

So here is my question to you folks who are/were similarly situated like me - what are some of the best options for me to get into real estate investing in light of my current financial situation?

I appreciate any advice you may have. 

@Brian Wheeler Congrats on your success! Could share with us how you acquired your first deal? What was the most difficult part? Were there any curve balls thrown at you in the process?

@Trey Brooks

Congrats on finding your passion and welcome to the club! I was in a similar position to where you are now. Since you are off to college, my advice is for you to take courses on finance and marketing. Wholesaling is all about being able to market yourself. Finance comes into play when you're crunching numbers and trying to determine whether this is a good deal or not. 

Action is always the most practical application. Go out there, knock on those doors! But remember, you are there to sell yourself and telling them why they need YOU, not you begging to wholesale their property. Let us know how your door knocking venture goes!

@Amanda Williams

1. secure the property by having SELLER sign and notarize a purchase and sale agreement for the property. This will give you exclusive rights to the property.

Side note: Make sure to include an assignment clause in the agreement so you do not have to worry about double closing (more fees), and you can just assign purchase and sale agreement to your investor. But check with your State whether assignment clauses in real estate transactions are allowed. 

2. assuming assignment clause is effective, create a separate assignment agreement with BUYER for him/her to assume the rights to the property. If assignment clause is not allowed or not included, you will have to double close. This meaning, you will close on the buyer and then close on the seller. This effectively means you will be owning the property for a brief moment and will be paying more closing fees.

These steps apply to an individual property. There is no way you can legally prevent investors from moving in on the list you provide them.

@John Morey

I agree with all the above. I will further contribute by saying that some wholesalers include an escape clause in the contract which states something along the lines of "closing is subject to approval of my 'partner' in the deal." This "partner" can literally be anyone or thing; even your dog can be your partner! All laughter aside, now, this may or may not be legal in your State, but some States allow such clause. Inquire with an attorney about this. Nonetheless, assuming that your scenario contains a contract with an escape clause written into it, you can walk away from the deal if so you choose. Of course, this is not the best way to conduct business and I do not recommend it since it can greatly damage your reputation.