All Forum Posts by: Ronald Burgess

UPDATE

The wheels are in motion, Deal is $10,000 down, $500 a month for 3 years just to pay off the remaining $19,000. Sale price is $29,000, comps sell for mid 40's in the area but he's never put it on the market due to our verbal agreement (he's selling over 40 houses). Current tenant has been there 3 years and is being charged $650, about $100 under market. I don't think I'll raise it due to this being my first rental and I rather have the existing tenant than to look for another. I won't be making any money for the first 3 years but after that it'll become all profit.... Oh yeah as you Can tell from the math, it's 0 APR, he's mortgaging the loan himself to save me on the ridiculous closing cost that would come with such a cheap purchase

 Net worth is definitely my goal,  thanks for the knowledge again! 

 Can you elaborate on the 4 loans until proven capable thing?  Sorry if it's self explanatory! 

 The area Is still pretty high on heroin sales but it's vastly improved since 99' when I moved from there. .. why are small loans a killer?  They generally higher in interest rate or something?  Or are you speaking about how hard they are to obtain? Thanks for your input! !

I likely wouldn't live there now to be honest, but it's where I grew up. As far as buying more expensive, desirable areas, I would love to but there's a few things I have to worry about. 20% down and vacancy risk being the obvious ones. Also from the numbers I'm crunching ( I could be way off)  it is much tougher to find a cash flowing rental in houses in the 200k+ range.

I appreciate the time and response fellas

I've been researching and wanting to start investing for years now but always had an excuse (nerves) not to. I recently agreed verbally on a deal ( pending finding a bank to mortgage such a small loan) with a guy who owns 40 properties and is in the middle of downsizing and selling half of them. The house is in a low income area that I grew up in but is very close to booming neighhborhoods. The deal is for 30k on a 2 bedroom/1 bath/ 648 sqft row home. He offered me two other properties for the same price, 3 bedroom 980 sqft but I think that areas is much further off in terms of gentrification. They're all currently occupied with the other two properties bringing in 700/mo. The house I agreed to verbally is only bringing in 625/mo. 

I don't think the 30k mortgage and 625 rent quite meets the 50/2% rules but it's such a small deal that it can't possibly hurt me and I feel it may build my confidence to take a real risk. Initially I was going to jump in head first and buy a shell for 80k in a 200-250k neighborhood area.

Any tips, reccomendation, criticism is very welcome.

 Key word alert? I'm curious myself of this meet up.

Good luck Garrett, were in the same boat, although college was nearly a decade ago for me hah!

I've stumbled upon this after crunching numbers on an APP I just downloaded. If I end up renting my current home out at the average $1050 in this area the ROI calculates to be 16% ( is that solid? ) and my first rental I have verbally agreed upon is calculating at 69%, it is going to be 30k purchase already occupied with tenant paying 625, does this sound accurate? Sorry I'm still learning!

I can't do FHA, my current home is FHA. I bought in 08' for 125k, and I owe 104..... if values are the same I would be close to 20% equity and could refi to conventional with no pmi then go FHA again but something tells me my house has lost a good bit of value! As for the 50% rule, I need to get familiar with that for sure. And yes please message me some of these banks if you can, my own credit union wouldn't do under 50k

Thanks for the detailed response buddy. 

 Yeah I've noticed that, a lot of houses in point breeze listing for 300 and selling for 200!! Thanks for the advice.