All Forum Posts by: Tim Campbell

The local MNREIA group has a wholesaling 101 class that meets once every month or two I believe. That would be a good place to start. I would network with attorney's at your local REIA meeting who are experienced with real estate investing as well. I'm a licensed agent in MPLS but I don't run my wholesale deals through my broker. I had the discussion with my broker and it came down to if the property transfers to my name or a name of a company that I have interest in, then it would be considered a transaction and falls under the broker rules. However, assignment contracts aren't considered "real property" and doesn't transfer ownership...just the right to purchase. Find an attorney experienced in this area if you have concerns.

@Kyle Vogt if you are truly wholesaling, you are not buying and selling property.  You are simply assigning the right to buy a property via contract.  You lockup a deal and assign it to a buyer which doesn't qualify as a purchase or a sale since the property never is transferred to you.  The assignment doesn't get recorded with the county and depending on your title company, the assignment fee isn't on the closing statement.  As a wholesaler who does a lot of wholesale deals, I sometimes do a double-close where I purchase the property and then sale it at the same closing which counts as a transaction since title transfers to me.  The only time I do that is when I don't want my profit disclosed to the end buyer for various reasons...but rarely do I do double-closings.

@Jake Hartnett as well on this deal.  Glad I could help you on your 1st one!  Many more to come!!

Looks like you have enough spread for a hard money loan.  If the banks or private money won't play ball, no sense in waiting on the sideline.  Use the hard money and keep working on your credit.

How much do you need for rehab?What's the spread?  How long is the rehab and how long will it take to sell approximately?  This is a cost of cash question which really depends on how you answer the above.

@Alexander Lang Are you still doing contract work?

 I like that analogy as it pertains to this conversation..."boots on the ground".  That truly becomes the difference in opinion.  Do you or a trusted partner have "boots on the ground"?  If yes, I'll listen to your advice.  If no, ...

@Eric Bate

Your current rent is $1000/mo. Your living expenses is probably another $1500 conservatively w/ fat ($2500/mo needed total). So, in terms of your goal to live 100% on passive income, you would need 9 doors rented at $300/mo per door in net positive cashflow. Therefore, in terms of “Opportunity Cost”, you need to decide on the most effective and efficient path to get you the 9 doors @ $300/mo/door CF.

Based on this information, if I was in your scenario, I would set a goal of leveraging the initial $50k over and over again to get all 9 of the doors needed to accomplish your goal. The first investment is any property that you can get in for under 70% ARV. Use your $50k to get in, even if it represents a 25% down payment. Rent the number of doors allowed. Refinance the property for 70% of the appraised value immediately and pull your $50k right back out (it may be a little less after the refinance based on charged points). Find another property under 70% ARV and use the $50k again to acquire it. Refinance and repeat this process until you get the 9 doors needed. Why stop there?...keep applying this technique by recycling the initial $50k that you have.

If you utilize this method of getting in under 70% ARV and refinancing the deal each time, it really doesn't matter if the initial loan is FHA, 3% -25% conventional or any other loan product. Your only intent is to refinance the money back out for reinvestment on another property.

Interested on hearing what other members in the forum think about this...

@Erika Young I invest and will continue to invest in North Minneapolis.  I currently have a partnership with another developer to build 30 single family homes over the next two years with a price point between $190k - $260k.  We have a home going up currently and it is already sold.  There is a waiting list of pre-approved buyers looking for homes in N. MPLS and there is a shortage of supply right now.  The same applies to the rental market in North Minneapolis.  Most of the opinions on this forum that is formed are based on information people obtain from the media (which is skewed)...it is not based on actually investing in the area.  Therefore, the general misconception can be used to your advantage since you are familiar with North Minneapolis.

The location you choose for your investing strongly depends on the strength of your program.  If you are managing property yourself and don't really know the ins and outs of tenant management, you'll get burned...no matter where you invest.  If you have a strong investment program, you can control your risk in any environment.

 Stuart, you said you wanted to gain financial independence.  I think your first step is to define what financial independence means to you and what kind of properties will it take for you to get there.  There are a lot of strategies that will take you in different directions.

If I was in your position, I would use BRRRR. I would find the first property, 1-4 units, and buy it all-in under 60% LTV (some will say you can't but I do it all the time). Use an FHA loan or a 3% conventional with no PMI for the 1st one. Then refinance and pull your initial $20k+ out of the property along with additional funds saved and go find another property under 60%LTV. Keep doing this until you get to 10 properties and then roll all 10 into a portfolio loan and leverage into larger properties.

You can do all of this with your initial  $20k investment.  Their are a few caveats so educate yourself along the way.  I do this myself and I help my investor clients do this as well so I know it can be done with very little money.  Recycle that initial 20k over and over again.