All Forum Posts by: Jeff Wallenius

@Kaelyn Hearn welcome to the site. There are fantastic resources all through BP, and educating yourself on each investment option should be your starting point. Great job looking to real estate as an investment vehicle, it's a great avenue to begin building wealth. 

@James Caruso and @Matthew Gangi keep the positive thinking and hardworking attitude and you'll be successful. Best of luck!

@Kay Kim nicely done, consider landscaping as well. Like I said your tenants most likely won't keep it up to your standards and a poorly maintained outside may affect your ability to rent when you do have a vacancy.

@Sebastian Marroquin 8-15% returns, just make sure you know what your investment dollars are actually invested in. Ask about multiple exit strategies, risk analysis, do managers invest their own capital, etc. 

@Kay Kim just make sure you breakdown all the individual expenses instead of relying on the 50% rule. Vacancy factor, maintenance factor, landscaping (your tenants most likely won't keep up with it), garbage service, CapEx, taxes, insurance and HOA if any. This way you ensure your numbers are accurate and your getting a true CoC return.

@Erika Reed you state your due diligence period was over, was this for the inspection? Your contract should have had a financing contingency to cover you for this exact event, but it sounds like that was not included in your contract?

@Sebastian Marroquin In response to your question on having $50K and wanting passive income. If your friend is open to a quality return without actually owning property a syndication may be a nice option. Both investments have their pros and cons obviously so it depends on your friends investment goals. This may be a nice opportunity to raise additional capital while he focuses on building out his consulting business and not having to worry about owning property and some of the management of real estate. Again, depends on his investing strategy. If he were to invest in a syndicate I would search for the following:

1. Transparency

2. No fees

3. Investors paid first

4. Funds free to withdraw at any time

5. Managers paid on the performance of the investment

6. Diversification of investment

I am a firm believer in buy and hold real estate and own this type of investment myself, but also wanted to add an option to the list. I invest in a syndicate that provides all of the above listed. As a side note, your friend can self direct his IRA and invest in real estate with that money as well.

Cheers!

@Kevin Smith I'll echo what @Larry Fried said about the low end turnkey rentals, stay away! These will be long term anchors on your finances and will cause you to realize negative cash flow before you blink. As an out of state investor you have to find a strong team to work with, and there are additional pitfalls to be aware of with turnkey investors as well. There are some very high quality providers, but also some snakes out there. Make sure you do plenty of homework prior to making your first purchase.

@Jeff Bisgier assuming you'll have a fair amount of equity in the house after your done with the rehab, refinancing and getting your funds out should be no problem. I did this twice last year with homes I paid cash for and refi'd out to keep as rentals. Do be aware that an appraisal for a purchase vs. a appraisal for a refinance usually result in two, sometimes drastically, different figures. As the house is non-owner occ you'll need to have 25% of equity in the house in order to cash out your funds. Happy to answer more questions if you have them.

The 5 year payoff is pretty common and you'll pay higher points and interest especially the type of property that your looking to finance.