All Forum Posts by: Shiloh Lundahl

Hi Ethan, ignore everything that was said on this thread. A lot of people are intelecualizing, moralizing, and complicating things. This can be much simpler than people are making it. 

First off, it is kind of your grandmother to offer to lend you money at 5%. It shows she believes in you and wants to help you be successful. Thank her for that. 

Secondly, you need more experience and understanding to become a good real estate investor. With a savings rate of $2000 - $2500 a month you have shown that you can manage your personal finances successfully so great job!

This would be my suggestion, continue to go to real estate meetups in your area and start connecting with other investors on a regular basis. If possible, invite a real estate investor to lunch each week and pay for their lunch. Ask them how they got started and what type of deals they are doing currently and what the numbers look like. After doing this for a few months and having gotten to know several (ideally 20 or more) investors, ask one of them that you felt most aligned with regarding the type of real estate they are doing if you can lend to them short-term on their next deal and if you could see the process of how they invest. Make sure your interest in the property gets recorded with the title company and then learn as much as you can about the process. 

After doing this on 2 or 3 deals, you will be much better prepared to recognize a deal, how to get into a deal, what's important and what's not important in a deal, and how to make the deal profitable.  

You are getting too much feedback on how people buy houses the normal way and get loans the normal way. Well your regular average person that buys a house the normal way gets rich very slowly if at all. Skip all of that. Learn how to find really good deals, and then get into a really good deal and turn that deal into a great place for you. 

This is an idea of what I would do specifically if I were in your current situation after having dove head first into learning, networking, and participating in deals.

1. find a house from a wholesaler that is an older build but that doesn't need things like electrical upgrades or things like that. Look for a house that is around 1800 - 2200 square feet where you can change a 3 bedroom home into a 4 or 5 bedroom 2 or 3 bathroom home. This would make an ideal situation for a house hack/rent by the room situation which would exponentially build your income quicker. 

2. Purchase the house with a hard money loan from a lender you met over the past year of doing deals with successful investors. Get a 90% or higher loan with rehab reimbursement draws where you can get money draws from the lender to reimburse what you spend on repairs. This will make it so you can recycle your rehab money and make it go much further.

At this time you should have an additional 20k - 30k in savings so you should be at about 50k or more to work with on the purchase and rehab. 

3. After the repairs are complete and you have started renting the property by the room, look into either refinancing as a primary home or get a DSCR loan if the primary home loan lender is giving you a hard time.

If done well, you should be at only a 75% - 80% loan to value and you would have taken your $50,000 in cash and turned it into $100,000 or more of equity. You should be able to live in one of the rooms for free and cash flowing $500 or more a month on the property.

After doing this, go back to your grandmother and show her the deals you have been a part of, what you have learned, and the deal you put together. Then ask her if she would like to be your money partner on deals and go start crushing it. Outline the partnership expectations in paper, continue to build your support system, don't get over leveraged, and improve your craft. 

I would encourage you not to use grandma's money at the beginning until you are already doing your own deals successfully. It makes it too easy to use easy money and it doesn't push you into finding really good deals. It would likely make you into a mediocre investor. So don't do that. Focus over the next year at building the investing rocket ship and then let your grandmother provide the fuel.

@Enrique Jevons You mentioned many ideas and principles of investing. All those principles are good, however, I think you missed on the most important principle and that is to have an unfair advantage. With the amount of competition trying to do everything you mentioned above, you can get beat out of every deal unless you have some sort of unfair advantage such as 1) Lots of money, 2) A greater knowledge of the location, 3) More speed than others, 4) A niche strategy that's not over saturated, etc.

Those are sound principle that you mentioned, but unless someone develops an unfair advantage, it is likely that the deals that may fit the criteria above, will be snatched up by people who are quicker, or have more money, or have more knowledge or a greater strategy.

So in addition to investing with sound principles, I would say that you need to develop an unfair advantage to really be successful in today's market.

@Corby Goade I agree with you that everything you need to know is already out there and that you could get that information if you researched it and studied it. 

At the same time, I look at coaching like how my wife makes banana bread. There are the ingredients, and then there is the recipie. With only the ingredients, I'm going to have to try and fail several times until I figure out the right proportions to make it come out as good as she makes it. Or, she could give me the recipie and even show me how to make it. The chances are, if she shows me, it's going to turn out great and I won't need to go through several trials in order to get it right. 

The information is like the ingredients. Having a coach or mentor is like having the recipie.  

@Christopher Johnson I have no dog in this fight, however, I have read through several threads on BiggerPockets over the years and have seen similar things play out. If you are unfamiliar, you may want to read the threads about Clayton Morris or Morrisinvest. As that saga unfolded, let's just say Clayton decided to move out of the country to Portugal for whatever reason. And we'll say "moved" because "fled" sounds bad.

If, in fact, you have a contract with @Scott Johnson how has the company done with their performance? Have they provided the good leads that were stated that they would provide? The easiest way for a company to defend their reputation is to provide the services that they were paid to provide. 

There have been several people who have made posts on BiggerPockets accusing companies of being a scam. Then the company responds to the post with their receipts of fulfilling with their services which ultimately makes the accuser look foolish. Additionally, reputable companies usually have other reputable customers who will speak up on the reputable company's behalf. 

So rather than spend a lot of time focusing on arbitration or trying to get this post removed, since it has been a couple of months, surly there should be some receipts of good leads sent. Just provide evidence of those leads that were sent.

Also, another way of defending your company and establishing your credibility would be to ask some of your clients who have been successful using your services who have had accounts on BiggerPockests for months or years to share their experience with the company. Of course these people should have accounts on BiggerPockets that are older than this thread and they should have other posts on BiggerPockets, otherwise they will look like fake accounts. Surely with over a million members and posters on BiggerPockets you should be able to find a few people who can speak positively on your company's behalf.

I am eagerly waiting to see how this unravels. And if it starts to look really bad, well, I hear the house next to Clayton Morris is up for sale. Boa sorte (that's good luck in portuguese in case you want to get a head start with the language).

@Yun Han I have many friends who are agents. Yet I still prefer to work with a sellers agent rather than work with a buyers agent when I am buying real estate. I like as few people between the seller and me as possible. In fact, if I'm able to convince the seller's agent to allow me to talk directly with the seller I will do that. 

Additionally, if I want my offer to stand out above other offers then I will let the seller know that I already own 10 properties in the area and I will offer a $20,000 non-refundable earnest money deposit, a quick close, and I'll wave my inspection period. 

Right now I'd take the cash because I could allocate that to pay off high interest debt or I could use it to buy undervalued properties that could double the money and create some cash flow.

Hey @Keith Freie At the time that I am writing this post, I just finished with The first day of a three day event put on by Aspire where Eddie Wilson talked about buying businesses. It was a great event. But the buy in for the group is pretty expensive. My wife and I joined it back in September of last year and the information that we got about tax savings will create 10 times the cost of the event. 

@Terra Padgett if I suddenly had another million dollars to invest then I would double it (well almost) and create about $2000 a month in cash flow.
I would buy 23 properties under market value leaving about $40,000 into each deal while also creating another $40,000 of forced equity through repairs. And I would keep $80,000 in the account for reserves.  

I would keep the properties for about 3 years and bring in tenant buyers to buy the properties and then I would trace up. At that point, each property should have about $100,000 of equity in them creating 2.3 million dollars with about $150,000 in the reserve account. 

Each time a property would sell I would do a 1031 exchange into 2 properties thus doubleing my money again. Within 6 years the 1 million will have grown to nearly 5 million dollars. 

At that point I would have about 46 - 50 houses and I would focus on paying off about 20 of them over another 3 year period and thus increasing my monthly cash flow to about 23,000 a month.

@Nate Marshall is that how you deal with everybody who disagrees with you? You resort to name calling? If somebody just shared with you their experience, why not ask him more questions rather than accuse him? Unless of course you're just more interested in thinking that you're right and just closed off to the idea that other people may have had a positive experience with the thing you demonize. 

@Nate Marshall why so rude?