All Forum Posts by: Travis Beehler

As you're finding out, most, if not all, lenders will want you to have some kind of "skin in the game" so to speak.  If you go to them with literally ZERO dollars invested from yourself, then you're not going to go anywhere.

I was in the same boat you are.  You'll likely have to come out of pocket in some form or another.  You can check with private lenders (friends/family), cash out your 401k (like i did), or simply save up.

Now, if anyone has other advice that they'd like to add, I'll happily hear it!  I'm far from the "be all, end all" person on real estate advice.  HA! :)

Hope that helps!

If it's a conventional loan, they will want to question you as to where you came up with the deposit on your bank statements.  You will likely have to keep that money in your account for 60 days or longer, before it looks "normal" to them, and they don't ask.

 Yep, I've already talked to my property manager, and we both agreed that once I hit 10 units, we'd negotiate a much lower rate.  10% though is a pretty standard rate in St. Louis.  I'd LOVE to get my rate down to 3.5%, as that'd save me about 3-500-ish a month off the top of my head. :)

It can be quite nerve wracking at times, but all in all, I wouldn't be as far along in my portfolio if I hadn't.  I'd have MAYBE 2 rentals here in my town if I had stayed here making about $500 a month profit.

 Thanks!  Have a good day!

 Thanks Gino!

I didn't go at it as fast as I could have, but I started on the idea of rentals in 2010, made my first offer in April 2011, and closed that short sale in October 2011.  So 4 1/2 years or so.  I think I could have gotten further along had I poured more money into buying rentals than if I hadn't bought say a new car (I had an internal oil leak in my engine of my old car), and flown to Canada to be with my girlfriend. :)

 Anytime!  I agree, staying motivated does get hard sometimes.  ESPECIALLY when you're first starting out.  You're thinking "Great.  I'm making $100 a month, but that doesn't feel like a lot"  Or you get discouraged by crappy tenants, unexpected expenses, etc.

It really does get better, you just have to stick with it. :)

 Thanks!  Absolutely.  Average house price is around $40k.  I put down 25%, which makes around $10k + closing costs of a few thousand dollars.  I then put maybe 1-2k in improvements to make it rent ready (good cleaning, maybe paint, etc.).

I then rent it out for $800 a month and get a tenant on a 1-2 year lease.

My expensese:

Mortgage: $200 per month

Property Manager: $80 (10% of gross rent)

Insurance: $70

Taxes: $110

Grant total:  $460.

Rent is $800, so profit is $370 per month.

That being said, I just shove that money into a giant account.  Repairs and the like are taken care of out of that account.  Once the account reaches $15-$20k, I take most of the money out, and buy the next property.  There's always at least a few thousand dollars in that account for minor incidentals.  I have backup credit cards for repairs if I'm hit with a big repair and I don't happen to have the cash readily available.  Case in point, had a break in early on, that cost me about $2k.  I had about $1k in the bank.  Paid the repair on my Visa, and all the profits went towards paying that off asap.  Now I've got about $13k in my account.

Hope that helps!

 No worries!  Good luck!  PM me whenever you'd like if you want to get together or just ask questions! :)

I agree there's opportunity elsewhere, and it can be scary.  Especially when you know zero about an area.  Personally, I've had to go through 3 now property managers before I found the guy I like.  I've had to talk to approximately 12 banks before I ended up with the one I have now.

Sometimes you have to look into the abyss and jump. :)  I know it was scary when I bought my first one too.

Out of curiosity, have you ever thought about being a "money guy"?

For example, I've got a buddy who wants to invest in rentals like I have.  However, he's scared to death of liability, more than just risk.  He's a very high end engineer, and had his own company for a while, so he's been sued before. :)

So, he's been talking to me about investing his money for X amount of return, and a guarantee on his principle.  I give him a flat percentage rate of return, and a term of 2 years for total payback.

But that being said, he doesn't own anything of mine.  But there's also no risks. :)

Not necessarily hitting you up for it, just presenting options in case you're jittery for that.

But, I would say without a doubt, trust your gut.  If you are interviewing a property manager and they don't feel right, don't go with them.  If they don't return emails/phone calls for days, don't go with them.

Protect yourself with an LLC or something like that. I set mine up with Legal Zoom, so I didn't have to pay an attorney.

I also set myself up with a CPA with real estate experience (I can give you his number once you're at that point if need be).

It took a lot of time, work, and a few bucks to get me to where I am now, and I admit, it's been very discouraging over the past few years.  But, once you find quality people, it becomes MUCH easier.

Always insist on an inspection with pictures.  LOTS of pictures.  You may want to get a property manager before you even get your first property in a foreign city.  They would be able to help you buy in decent neighborhoods, find you off market deals, etc.  Hell, they may even be able to find you a place that already has a tenant in it.

My office at home is an actual office.  I've set it up, so that at any point in time, if I need to do anything, I can remote into my office at home from work and take care of various things.  I HIGHLY recommend one of those all in one scanner/copier/printer jobbies from HP/Brother/Canon.  You'll be signing and emailing tons of documents and it becomes a pain real fast. :)

I imagine I'm forgetting to mention other things, but if you want to know more, feel free to ask!  We could even get together for a drink and BS about it if you're so inclined.  Have a good day Tyler!