All Forum Posts by: Simon Shih

@Angel Moreno. House hacking is a great way to get started in real estate investing.

Saying that, do not count on appreciation. It's great if it happens, but don't bank on it. The best way to ensure some equity is to buy at the right price. Maybe an REO.

If you do buy a multi-property and become a landlord, treat it like a business, which it is. Put processes in place up front that make it easier on yourself and that you can recreate and scale up in the future.

I use J Scott's book, The Book on Estimating Rehab Costs. 

If you are conservative with your numbers and build in a buffer, you'll be fine.

Once you have a signed contract in hand, you send it to the title company so they can start doing a title search. Only costs associated with this is closing costs at closing. Only deposit is if the owner wanted earnest money. Earnest money goes to the title company to hold.

You then look for an end buyer to assign the contract to or do a double closing. Make sure the title company you pick does contract assignments or make sure the title company does double closings without transactional funding. This means that you won't have to find temporary funding to close with the owner first before getting paid by the final buyer.

Okay guys. 

@Ben Leybovich @Account Closed @Ned Carey

What about turnkey properties. I have no interest in it, but many investors are building whole companies on providing turnkey properties. Am I missing the definition of turnkey or are these deals retail or close to retail and rented and ready to go?

I tell them I need to see the house first before I can make them an offer. It gives me time to do some research, find the tax assessment, do comps and research the area. 

https://www.biggerpockets.com/renewsblog/2015/02/12/bp-podcast-109/

@James Wise @Roy N.

I stand corrected.

And just for the record. A commercial loan doesn't look at the borrowers credit. It looks at the property ROI and the ability to come up with a down payment.

People on BP will partner with people who have documented experience. At least the ones with money will expect that. A proof of funds letter is not a guarantee. It only gives you a piece of paper that says based on certain things we look at like credit and income, that you could get a loan for 500K. It's a starting point so that you can look for a house or finance a deal. If you don't have the down payment, then there's no way you can get the 500K loan. 

I can pay a hard money lender a fee and get a POF so I can give it to someone who needs one before they accept an offer. Doesn't mean I have 500K in the bank or that the lender will lend it to me.

A partner will expect some skin in the game from you. If I have 100K (20% down payment), then I have the credit and the ability to do a deal like that for myself. Why would I need someone who has just credit? 

You should take the time and listen to the BP podcasts. It's invaluable for understanding basic real estate investing terms and types. http://www.biggerpockets.com/renewsblog/category/p...