All Forum Posts by: Sam Steadman

@Travis Kemp

Let me know if I can help you in anyway possible. I live in Minneapolis and would love to connect sometime. Shoot me a personal message and lets setup a time to talk!

Sam

@Madeline J.

WOW. I love your mindset and your desire to help the poor with your business model. Like many people have voiced in previous posts, it is HARD to be profitable and help the poor at the same time with them built directly into your investing strategy. Personally, out of them all, I loved the post by 

@Michael Wentzel.

-I think this is something that is very achievable and HIGHLY beneficial for the community and the poor! As a country, I believe that we are lacking financial peace and the ability to accurately budget our funds. At the heart of this is our public education system for those in poverty. Our school systems are teaching math, literature, history, etc and all those are valued and important courses/subject, but they are lacking in courses that teach the simple basics to building wealth and how to receive a loan. The poor need to get OUT of renting and back INTO owning homes. This is crucial! Many of them do not know what a budget is, how to build credit, or what they can do TODAY to build wealth. I love the idea of offering tenants and other individuals in poverty a scholarship to go to Dave Ramsey's financial peace course. Then to offer them a rebate on their rent!!! What an awesome way to incentivize those in need to take action and better educate themselves. 

With all that said, Madeline I would love to meet up sometime. I am located in the Minneapolis and St. Paul area. I graduated from a University that strives to help educate and empower the poor. It is not a "simple fix" and there are many different organizations that are attempting to fix this huge issue. I would suggest checking out this organization... Banyan Community (I believe attached the link). They have been doing an excellent job helping their community and enabling those in poverty to take control of their futures.

In conclusion, please feel free to reach out to me. I would love to help you with your business in the Twin Cities or even just grab coffee and talk about ways you can help give back to the community! I am passionate about this topic and would love to improve areas like North Minneapolis or other surround areas that are desperate for assistance!

I hope this helps and what a great post and response by the BP community!

Sam

@Michael Schwob

Nothing is stopping you from investing at an early age... like 20 years old! 

-Lenders are looking at a couple things... They are looking for a strong credit score (WORK ON THIS NOW, get a college credit card with a max of $800-$1000 and use this sparingly. It will help you build up a healthy credit score and make sure to always pay it off). 

-They will need verification of funds for downpayment. The bank will visually request to see the funds for a downpayment so have this in a checking or savings account to show proof.

-Lastly, the most important is probably proof of income. If you have a salaried position that helps big time for a lender. Think about it, it lowers the banks risk of you defaulting on your loan b/c you have proof income coming in for the entire year and allows them to have more confidence in your ability to payback the loan. Of course, there are ways around this if that is through cosigning or going 50%/50% down with someone who can show proof of income if you cannot. In addition, if you had a friend or family member willing to help and make a little bit of money, they could purchase the home for you and then you could "purchase it from them" through a Contract for Deed financing. In the case of a Contract for Deed, the friend/family member acts like the bank. It is a possible way around conventional financing that would allow you to purchase an investment property earlier than could had been done before. 

@Chris Mason

Sorry for my lack of detail.

I would be living in the home with friends of mine (post graduates) who are working downtown with the intent of renting it to college kids after I move out. Knowing these guys on a personal level, they would not destroy the home. 

As well, I graduated from the college that I would be renting to and I know the rules and regulations that go with it. It is a private institution and its body of students are not as "party happy" as those of other Universities. I know of other investors who have done it successfully around the University and have been happy with their returns.

BP Community.

I am reaching out for some advice.

Currently, I am looking to purchase a single family home near a college in the Minneapolis/St.Paul Area. I am planning on having it be a owner occupied investment property. I am reaching out to see what all of you think would be a great deal with the information that I have in hand. If you could advise me on a good sales price for a property with the estimated revenues would be excellent! I am sorry for the limited information, but I am in the preliminary stages of looking for a property.

Ideally I would purchase this home within 1 mile of the college... 

-In the city where I am looking to purchase... You can have a MAX of 5 non-related individuals living in one SF home. 

-They have no restrictions or rules stopping investors from purchasing homes around the University. 

-I have access to FHA financing (MIP included :/)

Here are my rough estimates

-Average student rent around the University= $400 + Utilities

-# Of Renters= 5

With that said, with me living on the property b/c of FHA financing...

-I would be looking at a revenue stream of around $1600 (4x$400) monthly and $2000 (5x$400) monthly when I move out after a year.

With that kind of rent income... What would be a good price to purchase a home for? I am willing to buy a fixer upper and put in the sweat equity to raise value. What are your experiences? What are your thoughts? Any advise or thoughts are welcome!

@Michael Schwob

Network. This is HUGE when it comes to your ability to find success. This can be as simple as treating people kindly in your classes and getting to know them on a personal level. Also, this can be taking a leadership role at your University if that is in the business department or elsewhere. No matter what, treat people with kindness and give everyone their due respect.

READ. Always be looking to learn new things and different strategies and mindsets. Too many people graduate from college and quit learning... Come on!! What a terrible idea. Never stop learning and be constantly reading books to get ahead of others who are not willing to do so.

Start Saving. Set a goal to save money every year if you can. Many people when they graduate are held down and forced to rent because of an issue with receiving financing. This can be better resolved if you have CASH for a downpayment... Even if that is only an ability to put down 3.5% or 5%. A great plan is to have a goal of placing 5% cash down on an investment property and have a GREAT job to show proof of income to lenders. If you plan 3-4 years ahead of graduation you can achieve that goal.

Work on your values and ethics. I believe that this is CRUCIAL to success in Real Estate. Learn how to treat people well and place their needs before yours. If you can do this, people will learn to trust you and they will want to help you in anyway they can. Be a good guy and honest. Nothing is more important than in business/Real Estate as your REPUTATION. Start out strong building that healthy reputation and it will follow you throughout your life. 

Hope this helps. I love your tenacity and drive for success. Not many people at 18 years of age are thinking like you and that WILL pay off for you in the future. Let me know if I can help in anyway possible.

Sam

@Chad Friesen

I think more education and qualifications is always beneficial. However, in my opinion, any good Realtor will be willing to walk you through the process and help you find the property that fits your financial needs. Even if that is a lot of properties. They have access to MLS and automatic searches, which can allow them to weed out a TON of the properties that do not fit your qualifications and allows you to look at them before they would show them to you.

Answering your direct questions...

1st. Yes, you are able to become a Realtor if you are not going to do it full-time or be heavily active. The downside to this are the classes cost money, there are monthly dues, and yearly dues to maintain a license.

2nd. I would say this is not a common thing, but people have done it. I believe that with a license you have an advantage because you have access to MLS and more information. In addition, you will better know the paperwork and strategies behind winning an offer on a property and receiving it for a better price than you would had before.

Again, in your case, I would suggest you find a Realtor who will take the time to discuss your options and help hold your hand throughout the process. Many people believe they can purchase a home without a Realtor, but I have seen/heard of too many people that have paid WAY too much for a home because they did not have access to resources like MLS or know how to present an offer accurately.

Sam

@JaNae Anderson

I would highly recommend Minneapolis/St. Paul area. We have an extremely strong economy surrounded with good colleges and healthy public schools. Right now, the market is extremely hot with low interest rates and a small amount of homes on the market. 

Personally, I am biased. I know that in every city and state there are opportunities, but I think that MPLS is a great location to hold and rent... Also, it has opportunities to flip!

Let me know if you have interest or questions! I am a Real Estate Agent in Minnesota and could send you more information or properties. 

@Julia Bobe @J Scott

I agree with J. Change it to your situation and what fits your analysis. For someone who is not an agent 6% makes complete sense.

Sam

@Drew Cameron

That is an AWESOME idea. 

I would never say it is "that simple", however I would suggest the idea that it is more simple than what many people would assume when looking into an investment property. Obviously, it is a great idea to have someone else pay for your mortgage and help relieve one of the biggest expenses in ones life (mortgage payments). I would say that you are in a GREAT spot and to keep researching more on BP about the process of purchasing, renting, and selling an investment property like a duplex.

There are a lot of cool financing opportunities like FHA loans with only 3.5% cash down or even some conventional loans with 5%,10%, or 15% down. I'd say to look into all these options and the extra expenses/insurance that goes with each one and find the one that best fits you.

My biggest word of advice though would be to build a model for the duplex. Look at revenues, expenses, appreciation estimates, etc... Even create a "best case scenario" and "worse case scenario" for the property so that you can go in feeling prepared and informed.

Hope this helps. If I can help in anyway please reach out. I know a lender in Arizona and could possibly throw you their information if you want to hear more. 

Sam