All Forum Posts by: Bill Goodland

I know Morris Invest wants you to pay cash for the property, but you could always buy that one cash and try to find a lender to loan like 75% LTV on it. Then repeat once you save more. May be hard to find a lender who will loan on such a low cost property but you may even be able to find private money from family for like 8% to allow you to expand quicker and try to get a blanket loan on multiple properties.

I think that yes, with more expensive properties you don't need a full 30% but personally I wouldn't go less than 25%. Factoring in closing costs and the fact that you could still be easily 5% or more off on a rehab estimate, I think you still want the flexibility to pull cash out and refi at 80% LTV worst comes to worse even on a potential flip. Now if you're in a hot market and have experience flipping and am super confident in numbers and ability to sell quickly, if 15% buffer is still 150k then who am I to say don't take a projected 6 figure profit. All in all it depends your experience and what works for you but in the deal you mentioned, I personally don't think 50k buffer is enough to warrant getting yourself into that deal and compromising your criteria that much.

I mean if you are going to buy a new fridge anyway, you might as well do it to keep your tenant happy in hopes she doesn't leave it vacant and trashed. But I understand setting the precedent of not letting your tenants walk all over you. Replacement fridge, no fridge or move out seems like a fair set of options though

As I look to acquire rentals, I think the #1 thing keeping me from scaling quickly will be access to capital. If managing my first 10 units or so allows me to save more money to acquire more rentals then I will do so. Eventually however, the biggest obstacle I expect will be making the best use of my time. I personally like the idea of hiring someone under you to do the PM at a cheaper rate and also that will do things your way(i.e. caring about your properties as much as you do). That could change if I found a great PM company, but as everyone said, it's still obviously best to factor in PM as an expense and either pay yourself or assistant for the time and effort while you are still scaling up.

If it was me, I would use the BRRRR method as much as possible. I'm assuming you are not maxed out on personal Fannie May loans? You clearly have the cash to buy a house in need of rehab and pay cash for rehab depending on your market. Even in your 50's, doing one BRRRR a year is very doable even with the 6-12 month "seasoning" periods banks want. Given that you are paying cash and I'm assuming good enough income and credit, I would think there would be plenty of lenders willing to give an 75-80% LTV note on the property right away with a tenant in place. Then of course repeat. You get the same benefits of flipping by essentially rehabbing it to add value, however none of the tax DISadvantages on flipping and all the tax advantages to buy and hold. Given that SFR's and small multi's are usually more liquid and easy to find then larger commercial, I would utilize the good Fannie may financing options first with that before trading up to something bigger. Always room to scale up, but I just wouldn't personally put it all into one business or leverage commercial property.

Hi Michael,

Don't beat yourself up about not starting sooner. The best time to start investing in real estate may have been 6-9 years ago but the next best time is right now. I do think that 15k is enough to start in a lot of markets however in southern California that might be tough. I would recommend talking to a mortgage broker first to see what you could get pre-approved for. Something else to think about it that for many new investors, they are willing to put sweat equity into deals by learning to do a rehab on their own, or busting their backside trying to wholesale for 5k deals here and there to build capital. My response to you as a self employed person is whether or not that is the best use of your time. If you think you can hustle to do some of the low money down strategies then by all means do it, but what I think I would recommend is to focus on your current business to allow you to build up enough capital to get a more traditional investment property considering 15k isn't enough for one in southern CA or enough to really get many brokers excited to work for you out of state. If you were younger I would say look into house-hacking as a good way to keep expenses low and get real estate exposure but what it sounds like your best bet may be is to save up 40k or so to invest and put 20% down on a 200k property(yes they exist in southern CA but you may have to drive an hour or two). If the returns look better out of state, I would look into some turn-key companies which essentially do all the hard-work for you, however you still need to do your due-diligence on them. Lastly, if none of these strategies seem like they may be for you and you have some time on your hands, maybe look into some flipping opportunities with a partner with money, experience or both and see if you could put your time, money or relationships you build to work. Good luck and don't stop exploring everything BP has to offer, it is definitely a great resource. 

I totally understand where you're coming from, and you definitely got the right idea when it comes to capital creation and then investing; however I doubt someone is going to randomly bring you in 50/50 on a deal from one forum post. What I would do in your situation is to reach out to some cash buyers(usually flippers) and see exactly what they're looking for such as 3/2's in these zip codes for around this price, and then see if you can drive for dollars or do a bit of direct mail and basically be their personal wholesaler/deal finder(make them feel special). So if you are clearly adding value to one specific buyer, clearly that is replicable and you can then bring deals to more buyers. If you happen to come across a deal and need to find a buyer, then is when I think it would be a good idea to bring it to another experienced wholesaler looking to go 50/50 in a deal. What I'm saying is that it all starts with the deal, and that in order to expect something from someone(time a piece of a deal from a vet), you must be willing to take initiative and provide some value in return. 

Hey Mark, welcome to BP. I myself started on the webinars at biggerpockets.com/webinars which are held weekly. They're a great place to start and Brandon lays a lot of stuff out really well. If that definitely catches your interest, I would start to do your own education through books, podcasts, etc. BP's Ultimate Beginners Guide is a great start, and a lot of those topics are elaborated on in more detail on the BP podcasts which I listen on my commute to and from work(although I'm out of new ones now). Classic real estate investor books include Rich Dad Poor Dad(a must read), Millionaire Real Estate Investor, and Richest Man in Babylon which definitely helped get the personal finance piece into perspective before investing. For a newbie looking to do small multi-family, I would research the concept of house hacking which is recommended more than anything, along with the 203k rehab loan if you are looking to get some rehab experience and the immense benefits of adding value. Best of luck!

I think it totally depends, but I would probably start by going down to the city and seeing if you can get any information on it such as the owner, tax liens, environmental or zoning issues that could lead you to why it might be vacant. Is it for sale? If so, I would think that the listing broker could give you most of the information you are looking for, but if it's not and you are represented by a broker, maybe see if they could give you some guidance on who and what to ask regarding the property.

Andrey Y. You can absolutely get a decent truck for as little as 3-5k. A car should get you from point A to point B, and if you NEED a truck I'm sure just about any truck bed will do. If you want one for 8-10k and can afford it fine, but if you're trying to save as much as possible there's no reason you can't get away with something in that range. You'll have repairs on any used cars and a lower end one will depreciation at a far slower rate than a more expensive one. Even with the average expected repairs you end up paying less $$ per year in that range. Not saying everyone should drive an old car, but I'm saying you absolutely can if you have to so I wouldn't write it off so quick. I drove a Nissan worth $1500 for almost 2 years and got the transmission replaced from a junk yard and someone from Craigslist to put it in to keep driving it until I sold it.