All Forum Posts by: Spencer Cornelia

@Armando E. When you say that traditional financing has been difficult do you mean that acquiring a loan is difficult? Since you have 15% for the down payment, I'm assuming that your DTI is too high or you don't have enough in reserves..? I'm only assuming since I have limited info.

Make sure your lender is allowing at least 50%+ of the rental income from the other two units to be counted towards your income.  If they are not, I'd recommend shopping around and finding someone that does.

If this triplex is anywhere near Garden Grove, CA, then I imagine you will have no difficulty getting a nice amount of rental income from the other two units.

Let's assume worst case scenario...

You can't qualify because your DTI is too high or whatever reason your lender is giving you difficulty.

Is there any chance that the owner could seller finance a portion of the loan amount so that you can have 25% down and thus not have PMI and a smaller loan amount? What about lease purchase for 12 months to give you some time to qualify for a loan?

Hey group.  I'm a Software QA Analyst for a tech company in Las Vegas and have spent a lot of time learning software engineering.  I haven't been able to make the leap yet to full time software engineer but I'm hoping to do so within the next 12 months.

Really cool to see other engineers here.  It's a great industry full of really intelligent people.  Surprisingly, there isn't much crossover with software engineers and real estate investors.

@Roosevelt Thomas let's analyze your options...

You claim you want to BRRRR. So inherently there will be rehabbing involved. Which means capital. And you will need to refinance into a long term note when the rehab is complete.

So you're left with a couple of options...

1. Use seller financing with no money down.  Does this exist?  Maybe.  You'll need to find an owner distressed enough to believe in you taking over the payments and ensuring that they're paid, even with no skin in the game.

But then that brings up how you will pay for the rehab...

2.  Take over payments for a distressed seller and use credit cards OR monthly net income for the rehab.

But what if you don't want to do that...?

3.  You can team up with someone who has the capital.  You provide the deal, management of the rehab, and safety of their investment.

I don't know your situation enough to know what's best for you. I would be worried about the refinance part of the BRRRR if you don't have capital right now. Are you sure you'd qualify?

The benefit of a seller financing type deal (seller carry, lease purchase) is that you can maybe hold off on the actual refinance portion until the due date which provides you with ample time to replenish your cash reserves.

@Jennifer White you'll never be fully ready to buy your first deal.  I don't think humans can really learn until they go through something themselves.  Sure, you can understand how to plug in generic numbers into a calculator, but you won't fully understand the reason for the numbers until you own a property.  It's not until you FEEL loss that you can understand how to avoid it.  It's not until you FEEL profit, that you know where to pursue it.

For me, my first "deal" was a 4plex here in Vegas using seller financing.  I wish I knew then how much reserves would be needed for a D class property and how to adequately prepare for economic vacancy (late payment, evictions, etc.).

I think we as a BP community tend to really focus on numbers and spreadsheets but forget the real estate is centered around people.

The people who will be managing your property, the people who will be living in your property, the people who will be living in the community, the people who will be creating jobs for your tenants, the people who will be fixing your property.  All of these things matter more than a spreadsheet calculation IMO.

@Josh Sharp can you give an address for one you're looking at?  I want to make sure we have the same interpretation of what A/B class is.  In my 4 years of living here, I haven't seen an A/B class apartment near the strip.  The only A/B areas that exist here are far West (Summerlin) and Southeast (Henderson) with some spots in various locations throughout the valley.

If you do find an apartment complex near the Strip, it will probably be 3-5 cap.

@James C Norman Jr I'm a proponent of any strategy that makes money and aligns with one's goals. BRRR basically isn't possible in Las Vegas and I don't have interest in buying/holding SFR.

@James C Norman Jr you'll move out here to Vegas, drive past the small multi families, become less interested in owning a multi family, then look up the asking price and be astounded at how people are buying these 4plex for the prices they're selling for.

I would steer clear of 4plex in Vegas right now unless you can get a 40% discount magically.

And you're talking about putting down 0% with VA loan.....you'll be paying more out of pocket to house hack than it would be to rent.

@Corey Kenney hard money lenders don't lend based on your "friendship" with some stage guru. They lend based on the asset and they typically have a hard stop at a certain percentage of ARV, 70% for the beginner and 75% for someone with experience.

I will try not to tell anyone what to do so attend this event if you want to.  But the only networking that is worth your time IMO is going to be with your local investor meetups.  You're within a short drive to Philadelphia.  I bet there are 4+ great meetups every single month within driving distance for you, all with a significantly better group to network with.

I've been to one of these stage sales funnels so it would be hypocritical for me to tell you that the networking at these events is 2/10, but they're a waste of time.  We've all been beginners at some point, but all the people there will be just as clueless as the person to their left.  That's why these companies can get away with charging $50k for education.

Sure, there will be some element of "teaching" involved, but you can get that information in 10x supply on your commute to/from work in the form of podcasts.  The real knowledge you'll gain in this game is from networking with people in your area who are doing deals.  

I can go ahead and tell you what's going to happen.  They're going to hype you up for 90 minutes on how anyone can become a millionaire.  Then they'll tell you that you aren't serious if you don't sign up for the next stage of the sales funnel for like $300 for a weekend course.  Then you'll be asked to join their elite level, only if you're serious, where you'll pay an exuberant amount to be taught by them.

@Antonio Pican When my coworkers buy a house, it is a liability.  Why?  Because they have expenses every month and $0 in income.

With my house hack here in Vegas, I gross $3,600 a month in rents and have $2,000 in expenses leaving me with $1,600 profit every month.  My house is an asset.

It can be one or the other depending on how you buy.

@Nathan Yung Before you jump 10 steps ahead, I think it would be smart to pick one market (step 1).

You can become very successful in every market so don't worry about having to meticulously find the best one.  Find the best one for you to succeed in and then move to step 2.

Step 2 is networking with a team of people that will help you succeed in their market.

Step 3 is picking a strategy that you will be implementing.

Step 4 is execution.