All Forum Posts by: Account Closed

Hi @Brian Serina, I'm interested in commercial investments but was always scared because they usually come with a large price tag which means larger down payment and difficulty getting a loan. How does one start their commercial investment portfolio?

Thanks,

-Sean

Hey @Dennis P., I think the most helpful thing to me was finding a buyer's agent who had an investor's mindset. She helped me scan through the MLS and pick out the places that were under market value, had decent rents (met the 1% rule), and were in good neighborhoods (determined by school rating).

FYI I'm not sure you're allowed to discriminate based on sex (females only). Check up on that law before posting advertisements or you may have a lawsuit on your hands.

-Sean

Hey @Tim Steele, proof of funds generally refers to having your down payment in an escrow account. You need to have that in before you can officially close.

If you are not at that step yet, your lender is probably asking for proof of funds in terms of showing him your bank statements (to prove you have enough money for the down payment + closing costs + a little extra)

Hope this helps,

-Sean

Hey @Garrette Becker, I had the same problem as you and ultimately took action and made things happen. I don't know where you are in your life, but if you have the funds ready (possibly $40,000) and are well educated in real estate investing (if not, please read "The Millionaire Real Estate Investor" by Gary Keller). Then the next thing you have to do is to take action.

I was scared and chose a location based on popular opinion and advice from others. I joined real estate meetup groups (you can find them on meetup.com). I even paid to join someone's network (saves me the trouble of finding my own team and FORCED me to take action).

Here are the things you need to move forward.

1) Real estate agent located in your target area with an expertise in real estate investing. You don't want a random agent who wants to show you how beautiful the backyard is. You want them to show you monthly rent estimates, the cash on cash ROI, and whether the neighborhood is good or not.

2) Find a mortgage broker. Ask them what the rates are for a mortgage and how much you can afford to borrow. They will pre-approve you and tell you how much you can buy (i.e. they'll tell you if you can buy a $200,000 investment property or not.

3) Property manager. Find a good one, they'll be the deciding factor if your investment goes well or not. Ask them how many properties they manage, what's their vacancy rate, and what are their terms (some managers take first months rent as a finders fee and charge 10% of the month's rent).

Don't be scared to take action! Best case, you get a good property, worst case, you get a good lesson.

If this post was useful to you, please upvote this comment. It really helps me out!

Have a great day,

-Sean

Hey @Chad Friesen, I'm assuming you worked with her for your primary residence and are wondering if you should continue to use her for investment properties.

Here are some questions that I asked my own mortgage broker before working with him.

1) What are the current rates for a 30 year fixed on an investment property (no points or fees). Alternatively you could ask for other mortgages that they offer (i.e. 5 year adjustable, etc..)

2) What is the lowest down payment I can put down without paying mortgage interest

3) How much am I pre-approved for?

These are all generic questions that are pretty similar to buying your personal property. They will ask about your debt to income ratio, pull your credit, and see what they can offer. Typically an investment property will have a .5% higher mortgage interest.

Once you get the pre-approval letter from your mortgage broker, you're free to shop around for a great deal! I believe these last for 90 days.

If you thought this post was helpful, please upvote this comment. It only takes a click and helps me a lot!

Thanks,

-Sean

Hey @Riku Kiyokawa, welcome to BiggerPockets! I really liked the book "The Millionaire Investor" by Gary Keller. It's a comprehensive book that has everything you need to get started. If you need help with financing, you should start going to Real Estate meetups in your local area. You can find them by going to Meetup.com and searching for them or go on the BiggerPockets home page and look for the "Events Near You" section. You will meet a lot of seasoned investors that may be willing to help you finance a deal.

If you thought this comment was helpful, please vote it up, it only takes one click!

-Sean

Hi @Tad Fisher, welcome to BiggerPockets! I just moved out of Los Angeles a few months ago. A great way to find local REIA meetings is to go to meetup.com and search for real estate meetups. You can also find a bunch of local events on the home page of BiggerPockets under the 'Events near You' section. If you're looking to invest locally, I hear east of LA is pretty good (i.e. San Bernadino), there's a podcast that talks about it, although I can't remember which one.

Hey @Yousef Reda, it's hard to tell if this deal is good or not without a bit more information. I would like to know how much the rent is expected to be as well as how you plan on financing the home. I would also like to know what you are expecting to get out of it (do you value cash flow over appreciation? What is your desired cash on cash ROI). I would also like to know if you plan on managing it yourself or if you are planning on hiring a property manager.

Going from the tone of your post, it seems like you really like the deal, but are afraid to pull the trigger and are coming to BP for validation. If that's the case and you think it's great, go for it! Best case scenario, you get a good investment, and worst case, you get a learning opportunity.

Best of luck,

-Sean

Hi @Lamar Davis, I'm not from Fort Worth, Texas, but I've been finding great meetup opportunites using meetup.com. You can also find meetups on the home page of BiggerPockets in the 'Events Near You' section.

Best of luck,

-Sean

@Garrett Diegel I would like to add to this conversation, but not go with the majority. I would say listen to the circumstances of the eviction and make your judgment based on the cause of the eviction and not just the event itself.

When I was in college, I sublet a room from a friend so that I could stay on campus for the summer. At the time, we were paying below market rents ($2000/mo vs $2600/mo) and knew that the apartment manager was doing everything in their power to get us to move out so that they could rent to foreign students for the summer (at a whopping $3000/mo!). They warned the building that no partying would be tolerated and that this was our only warning. Being college students, we understood what he said but didn't think he was serious, so we held a small get together and had a great night (don't think of any crazy parties, think relaxed kickback).

The next morning we got an eviction letter telling us to move out immediately. Being the dumb kids we were, we wrote an apology letter and tried to talk him out of it, but he used the letter as proof instead.

My friends now have an eviction on their record.

Did they make a poor decision, yes, they sublet their lease when they weren't supposed to and their subletters held a small get together. Will they be a risk to you today? Unlikely, they all graduated and have stellar careers.

Not everything is black and white and if everything works with the tenant but a small stain in their history, don't completely block them out because of it.

My two cents,

-Sean