All Forum Posts by: Steve Smith

Ethan,
Sounds good. 3.25% is a great rate for an investor. (0% is a bit better....). But you'll have cash flow and overtime, hopefully this will prove to be a good investment.

However, after you've financed 4 or 5 properties with banks, they cut you off. And regardless they always dictate the rates and terms. And today they beat you to death with paperwork. Last time I checked they even wanted tax returns!

I haven't been to a bank to buy property in years, and just don't do that. PITA. I remember years ago on a few refi properties, they would send you the paperwork, and you'd have a notary come out to witness the signing, and they'd send you a check. Boy, did I have fun rewriting the docs to "my" specifications. I think those days are gone.

Seller financing makes a much better choice. A bit hard in some markets but it's there. I recently signed a purchase agreement for w $400K waterfront condo for $25K down, seller financing at 0% for 6 months, and taking title subject to an underlying mortgage. Backed out because I just didn't like the condo docs. WAY to restrictive. But it would have been a good deal for someone who likes condos. But the deals ARE out there.

Alyssa,
ABSOLUTELY NOT. A vacation rental is a LOUSY first time investment, almost as bad as a duplex. I could argue this strongly.

Get a good old single family home. Get one that's a small step above a good entry level home in YOUR neighborhood... no further than a short drive (15 to 20 min). Get a solid home, good bones, CHA, clean and modern. Make it attract a GOOD tenant and that's your key. You want one easy to buy, easy to maintain, easy to manage and easy to sell.

Yes, you can make money with vacation rentals homes, but you can also loose your shirt, especially with the distance. You DON'T want long distance management.

Now, if you haven't, get yourself educated in single family homes. Of course, you'd want to be educated in anything you put money into.

Get Schaubs book:

Building Wealth One House at a Time, Updated and Expanded, Second Edition

Amazon for about $30

Great for starting and reviewing if you've done a few houses.

Napier's book is good, too.

so is Rich Dad Poor Dad as just a good read.

Daniel,
I could argue for a first flip, keep it simple. You don't need a business. Treat this like an investment, which it is. If you can hold it long enough to get capital gains treatment you'll save some tax, or better year, get a Roth and do your flips in the Roth... no tax (but leave the money in). That may take some time to build but a MUCH better option.

Also, could argue to just hold for a few years, and if you need to sell, do a 1031 and defer the profits.

Lots of options... sounds like you need to take a GOOD real estate investing course or two.

Pretty expensive....

$2,850 origination charges

$1,100 underwriting fee

$1,949 transfer taxes

$2,310 property taxes and homeowners insurance

$900 homeowners insurance premium

You can eliminate all of the above except transfer taxes if you ask the seller for financing. Have you done that? You might still have a few items like RE tax depending on when they collect it. Unless it's a killer deal, could be a reason to shop around for other deals.

Couldn't find a new intro forum, so I'm posting here because this is what I'm in it. Looks like a good group.