All Forum Posts by: Ronald Allen Barney

Specifically for buying the only ROI for being a licensee is whatever buyer agent commission you might make with on-market purchases. If you buy mostly off-market you'll get zero commission, so a major factor for you will be if you plan to shop mostly via the MLS (which can be a good strategy especially for SFH where the data tends to be better quality). If you are going to target mostly off-market the license will just be a cost, and some brokerage you attach to will spam your in-box all day with "You don't wanna miss this" meetings, etc.

I think the more consistent and targeted synergy with investing would be General Contractor.  Instead of having to always find a good GC when you buy rehab properties you're it, and you can directly hire specialist labor with inside knowledge of that side of the market.  You save yourself a lot of money and in the course of running your contracting business, you'll run across off-market opportunities.  Some homeowner hires you for a project and they give up, get burnt out, and wanna sell instead, you're right there, and didn't even have to go driving for dollars or futz with bandit signs.

Run your numbers to see what price would bring you a cash on cash ROI in double digits renting it out. That math will give you your price. If your price works, you got a good deal. If they want more, someone else got a bad deal.

A few months ago I got talked into getting my license by investor friends.  Black Rock was gonna flood the market with cash and all I needed to do was get out there with a bucket and catch some of it in the form of commission.  Reality:  not so much.

For lead generation BP has been my only source that has worked, but most of those leads only ever want to look at MFH, and I've learned the hard way MFH data is sucky beyond repair in the MLS.

No closings.  Not much in the way of SOI leads.  Advice from team leaders at the market center is dinosaur, laughably ineffective, and/or contradictory.  No help at all.  "Just call people you know!"  I got the people I know riiiiiiiiiiiiiiiiiiight heeeeeeeeeeere.  Door knocking in the redneck part of Florida where I live is a good way to get killed.  No thanks.  Tried a direct mail campaign and oversubscribed on it, didn't work.

Rather than quit altogether I'm working on getting a day job to keep this going as a side hustle.  I have two ideas in mind, one to create a YouTube channel where I just rant honestly about RE to the world, what they see is what they get, and maybe that will differentiate me enough to get some leads.  Another idea is to work Commercial in Orlando as some companies associated with Disney (not Disney itself) are expanding.

The main differentiator for a beginner strategy is how handy you are and how much time you can put into each venture.  If you are very handy and have generous amounts of time to put in, a few flips can be a good way to get immersed in the process of evaluating structures, offers and negotiations, contract to close, and rehab.  It carves a few other investment variables out of the picture and allows you to focus on the experience you're building up.  From flips you can move to BRRRRs and apply what you already know from your flipping experience and add the new dimensions of learning the rental and property management side of investing.

If you're not handy (no shame in that) or don't have much time on your hands, it may be best to stick to turn-key buy and hold investments in single family, and hiring out property management. Do good investment math to make sure they cash flow. I specified single family because they are a dime a dozen, and in any MLS there should be good diamonds in the rough out there outside the mainstream of shiny objects being bid up above asking by desperate buyers (sometimes mispitched in listing to the wrong category by an idiot listing agent, which a good buyer agent can find and offer on as the only offer they've gotten in the past month!) MFH are much harder to find in this market and "house hacking" is such a fad now almost everyone I know is looking for one. As you gain experience and are able to network more broadly in the RE world, you will come across more and more opportunities in the MFH space and small apartment complexes. That will be the next level to shoot for which the networking will make more achievable.

I have a foundation repair company that I work with that is nice and responsive and has been able to save escrows by jumping in and doing the fix before the appraiser comes out.  Once the bank appraiser sees it bets are off.  It may just damage the appraisal or the bank my refuse to lend, depending on lender policy.  And also depending on how bad the foundation issue is.  Sometimes a minor jack job they're in and out in a day.

My younger self would be driving Amazon by day at $25/hour and taking online accelerated courses for business administration BA and MBA, and get certifications in project management like SAFe Advanced Scrum Master or Certified Scrum Product Owner.  I would get an entry level project management job and let the MBA fast track me for promotions up through business management (product manager, program manager, director, and on up).  That's for increased day job income to save up and invest.

On the investment side I would start with hustles that take less capital than RE.  Get streams of passive income going early.  With creative pursuits like writing books, music, or making videos, the main investment is time.  With some small scale business hustles like microgreens the investment is $2,000 and you have a $1,000 a week cash flow if you can find buyers.

Specific to the real estate phase of investing as @Bruce Lynn stated deals don't have to be perfect. Know what cash on cash ROI you can get in a given market and go for that ROI.

@Joshua Huss okay then that sounds about right. If a lender doesn't know you from Adam some of them will start with a max 70% LTV. Some that are more aggressive at deploying their capital can start with 75 to 80%.

FHA is such a picky program it's really easier just to accumulate more cash and bypass all their rules and hit up conventional primary residence for 95% LTV.

Lender seems to be mixing rules. If it's 30% down it's not FHA. Conventional commercial would be 20 to 30% down but in conventional commercial all income is taken into account. Find a mortgage broker who knows what he's talking about.

Good luck even finding one. NEFAR's MLS is so screwed up they even have Berkshire Hathaway listers showing a single condo for sale as MFH with 20 units. Guaranteed way to drive a buyer agent crazy.

Hard money debt servicing costs go in with the regular mortgage cost for the ongoing total debt servicing cost which, combined with taxes, gets subtracted from NOI to give you the cash flow number. When you get a payment estimate for the hard money that should tell you if the deal is a fit for your cash position or lack thereof.