All Forum Posts by: Thomas Clark

Hey guys!

Im new to real estate and honestly right now dont have a single property or the money to get involed. However I want to practice real estate investing and make side income. So I had an idea of learning financial modeling, and offering to analyze deals for a small fee ($20 bucks or so).

In my services I will attempt to grab as much real data as possible, so I will call  utility companies, and look at the market data, and I will alter the analysis based on request.

So my question is this something  potential investors might be interested in?

@John Clark I appreciate the feed back but I think joining to "Serve your country"  and not yourself is too black and white.  Why can't one do both? What is the difference between joining for school money and joining for other incentives. 

Where I'm from most vets joined for a spectrum of reasons, and  not just  to "serve your country"... as they should. It is inequitable that society accepts the U.S. government's use of incentives to recruit and advertise, YET not an individual's  right to evaluate those incentive and use them to guide their decision. If one is going to risk life, limb, and family relationships then one should evaluate the whole picture.

Thanks everyone for the advice! 

@Rachel H., @Steven Dreyer, @Alexander Felice, @Zachary LaJoye: Thanks you for your services. I hope my questions did not appear as if I was demeaning our service men. Truth be told I always wanted to join the military (Air Force) but around my 30th I realized that widow is closing. Good or bad I don't want that widow to close, and spend my days till my last breathe kicking myself for not joining. At least if I join and its a terrible decision I will know either way. 

Also because I want to keep my job, the reserves and guard are my only options, and since I already have a BA and a good job, the only other incentive relevant to me is the VA loan.

VA Follow up questions

• I'm interested in seeing how valuable the VA loan is to real estate investors (if at all)? Is it miles better than an (FHA loan) or just marginally and in what areas? (Bigger pockets podcast has many interviews with investors who got started thanks to the military, but I haven't found a source yet that compares the VA Loan, to an FHA loan or conventional loans.

Hey guys, I need your input.

I am a 30 yr. old local government employee who wants to be a real estate investor. My strategy is to buy a multi-family home (duplex) live in one end and rent out the other. However, not only do I have no down payment, but between student loans and my car note, it will be six years before I’m able to START saving a down payment.

However, there is hope. If I enlist in either the reserves/guard then after 6 years, I will have VA eligibility and could qualify for a mortgage without a down payment. Right now, the military is looking like my only option if I intend on owning a home or even being a real estate investor by 40 .

My questions:

• Is my logic sound (using the VA loan to qualify for a no downpayment mortgage on a multifamily duplex)?
• To your knowledge as a property owner/investor/vetera/or person offering advice, is the VA loan worth a 6 year contract (1 weekend a month).
• Are there other alternatives I’m not thinking of? (I know USDA offers now down payment loans but those are on homes in rural areas, so essentially I would scramble for renters, and two I would have a hard time selling the property)? 

Thanks for you advice!

Thanks! I realize my thinking was a bit naive. Although to be fair its not like podcasts, products, books, gurus, etc out there paint a clear illustration of what REI failure looks like.

It took me months just come across the fact that "most real estate investors fail?" If failure is so common, why is it that I only encounter this fact in my third month of fact finding. I mean you could criticize my research ability, or sources. But I think the real estate industry is setup to give investors a false impression.

I would love for BiggerPockets to dedicate an entire podcast episode to failure just to pain a clear picture of this is what it looks like.

If my strategy is to buy a fourplex with the buy and hold approach, choosing a customer demographic that aligns with my strategy is the next step. Let say I’m young and dumb and think it would be cool to target college students for my owner occupied duplex. Is there a book (or recommendations) that detail how to analyze your target customer demographic? A book that teaches you how to analyze the population of your target demographic in your city (is there enough of your chose demographic in your city that rents), and help you think of ways to improve your property to target this demographic?

I guess in sum are there any good real estate/ property management market research books?

I can’t fathom how residential real estate investors fail. Or even what failure looks like in real estate. Do you all mind busting this naïve bubble?

If my strategy as an owner occupant is to buy a multifamily complex and rent it out, I do not understand how “failure” is possible. Yes, I understand that property management is difficult and tenants can be pain but failure seems (a total loss of time and money) seems impossible to me.

As an Owner occupant If I don’t have tenants then I could drop rent and although rent wouldn’t cover the mortgage it could at the minimum subsidize my living. Or hell, at the first worst let’s assume I’m the only one who wants to live in the property. Hey, as an owner occupant no big deal, I would of had a mortgage/rent payment anyway.. Am I missing something? I don’t see how one could fail? 

My Introduction to REI failure (for those interested):

I’ve been bitten by the real estate bug three months ago and ever since then I knew this was my path to financial freedom. Since, I’ve been bitten by the bug I’ve been devouring “Frank Gallinelli - What Every Real Estate Investor Needs To Know About Cash Flow,” and all things BiggerPocKets in order to educate myself on the craft.

However, will reading the forms last night I came across a post that mentioned most Real Estate Investors Fail. This post has been bugging me because out of all the resources I have been devouring for the last three months this is the first THING I’ve touched that mentioned failure. First.. On top of that the poster noted (and was second by another) that MOST Real Estate Investors fail. When I originally ready this I was completely shocked. Here I was trucking along as though everything was alright and while I won’t say I think nor thought I was guaranteed success, the idea that I could fail simply didn’t enter my mind.

Thanks guys. I've been doing a lot of reading along the way and although informational I feel as no book truly illustrates the amount of money you need to have up front to purchase your first property AND/OR methods or programs you could use to help offset some of those cost. But you all have led me straight.

*Also thanks for the advice regarding PMI, I was not aware that most companies want you to pay it all up front I assumed that all PMI deals just added an extra $100 or $200 to your mortgage.

Thanks Matt. You are right should probably look cheaper which is fine by me, $200,000 is the in the upper range end of my market anyways.

Thanks guys. So in sum a downpayment does not include all the cash onhand you are required to have.

I'm not sure if this qualifies as creative nonetheless... just a curious question can someone with an FHA loan also use PMI on TOP of the loan??

The reason why I am asking is because I'm looking at fourplexs in my area and it seems the average price is $ 200,000. The the lowest downpayment FHA loans allow is 3.5%), so I would need $ 7,000 cash not including closing cost. Saving around 10,000 would take me twos so if I'm able to get by with a lower down payment I will gladly do so..

I understand  concerns that the lower the down payment  the bigger your mortgage and that banks offering low money down loans partly caused the recession.... But I don't believe those risk apply to me because I plan be an owner occupant, I have a pretty good credit score (720)  and a combine income with my spouse of 70K (no children yet).