All Forum Posts by: Ryan Muska

Yes, keep educating yourself - always invest in your future. 

As far as getting a mentor, why not look up a broker that is working with investors in the area you are and seeing if you can shadow someone/work for them. If they are selling to investors you will learn how the investor thinks and be better off for your own investor journey. 

Good luck with your search. If you ever need an investor friendly realtor, click on "FIND AN AGENT" a the top of the website and you can find some good options.

 I did not. I walked away because my other ventures needed more attention. On top of that, the park has little growth potential. If I go back to this, it will be to negotiate a much lower price.

Welcome to the REI and BP Community!

Lots of potential in those three markets and have seen lots of clients working there.

Good luck with everything and I hope to read about your great success in the coming days!

Interest rates have dropped about .5% over the past week. Maybe some buyers will hop back in.

If you cannot sell it, what about renting it out and getting a loan on it?

The monthly mortgage payment is not going to decrease if you pay the loan down. It will remain the same, the amount of payments (30yr term = 360 payments) will reduce.

Current High Interest Rates: Less buyers, reduced prices (despite still being inflated) because people cannot afford as much with higher interest rates, less competition, ability to win more deals. 

Future Projected Lower Rates: More buyers flood the market, prices increase because people can afford more property, more competition, easier for people to find "buys" due to numbers being easier to work with.

Future Potential Same/Higher Rates: Rates do not go down, this is the new norm, get used to it. People slowly (and many have started) realizing that this is what we can expect for the foreseeable future. 

Date the Rate, Marry the Price. There is something to say about prices being very high right now, but statistically, within the last 75 years, home prices have only dropped about 10% of the time. That being said, it is highly likely that they will increase, and with the projected lower interest rates, they are all but guaranteed to increase.

Why am I writing all this? Because I think it is best to leverage. If you are intending on putting most of your cash into a property merely to negate having to get a loan, you better have a sound plan for the cap ex that comes with that property. It is expensive and sometimes difficult to take equity out of a property. What happens if the property goes 50% unrented for 6 months? Do you have the reserves to cover the payments? What about a flooded basement? By leveraging, you leave additional reserves for you to utilize in the case that something unforeseen happens. 

Minimum down payment or 50%: What is better? Let us look at it statistically on a $2 million property. For this example, let's use a minimum down payment of 25% and an interest rate of 10% to make the numbers easy: 

25% --> 500k down payment | 13,163.57/month principal and interest

50% --> $1million down payment | 8,775.72/month Principal and Interest 

In order to save 4,387.85/month, you need to put down 500k more. Sounds like a lot saved. But wait, what if you put that money into a CD/Savings at 5%. Now you are making 2083.33/month. Now you are only saving 2,304.52/month to add 500k to your down payment. With the lower down payment, you have the capital available to do what you please.

I apologize if this was confusing.

I would assume that is fine. But I am not licensed in CA and cannot provide CA-specific advice on FHA loans, speak with a lender that is licensed there.

DSCR loans in LLCs are going to have much higher interest rates than in personal name.

I think it is a very circumstantial thing to put a property in an LLC. Lots of them go to tax benefits, but if you plan on purchasing, rehabbing, then refinancing, it makes little sense to purchase in an LLC because the tax savings you would have are likely outweighed by the higher interest rates.

If this is your first time doing this, I'd recommend doing a personal name loan because it will secure lower interest rates for this (almost definite) rough first go which will be a huge learning experience for you. 

Unless you are hard-set on an LLC, I do not think they are necessary and all too often investors think they are the way-to-go when in reality they may be providing little-to-no benefit.

As far as refinancing into another loan in the case that this property does not move, that should not be much of an issue even if you are short of assets due to being able to roll in closing costs into the loan.

There are lots of options, but how much is not much cash on hand?