All Forum Posts by: Tim Johnson

I can see why you didn't get a response in Reddit. You want folks to spend 10 minutes reading your thoughts and plans....and then in the end, you're not really looking for advice....just someone to justify your decisions.....that you've apparently already made.

It's all good. REI doesn't sound like your best fit or passion. There are many other ways to go....

@Lisa R. Selling on your own is admirable .....and yes, totally doable. 

Statistics show an interesting reality however. Every year, less than 10% of homes are sold as FSBOs (for sale by owner) - and less than half of these sales are "at arms length" - meaning that the other half are sales between family members or close friends, etc. Why would over 90% of people still employ the help of realtors and attorneys in selling their homes?   top two reasons:

1. they can usually command a higher price through a real estate brokerage. This may not seem fair but perception is at times reality. Do you want to sell your diamond ring at a garage sale.....where everyone expects a bargain?... or have it consigned at a well-known jeweler? That's the difference. The $25,000 of commission on a $500K home suddenly doesn't look so terrible when you're able to have a real estate brokerage sell it for $30K dollars more than you could on your own. 

2. The hassle of it all - directly communicating with and qualifying potential buyers, constantly scheduling showings, understanding the paperwork, contracts, contingencies, and timelines.....all cause some sellers to give up on selling it themselves. Many would nevertheless soldier on, being willing to gut it out, learn the details....and simply hang in there - if they could actually keep the money that would go toward commissions. That would be well worth the hassle.....but alas.... see #1 above. Again, less than 10% of Americans go FSBO - and I don't think it's because they're lazy.

Yes I'm a realtor so I'm showing a bit of my own bias.....but every year I've also given advice and helped homeowners who wish to sell their homes by themselves. Sometimes I'm able to help them...and other times less successfully. Even I can see that there are situations and times when FSBO is the smart way for a homeowner to go.

So yes Lisa, give it a try. There's some good advice for pricing your home in this thread.....and there is lots of good advice online for the rest of it. Best wishes.

Fear of being in debt and taking on risk in general....can be greatly mitigated, if not completed eradicated, by having clear exit strategies planned in advance. Being "a million dollars in debt" is rarely a deep concern to an investor who knows that her assets are worth 2 million dollars. 

Another way of getting rid of your concern over debt.....is to do correct math. (Math is a tricky and glorious thing). If you have purchased 10 $100,000 homes over the past 10 years, and at the end of that time you still owe a million dollars on them.... you have other areas of REI that you should be focusing on. My point is that correct analysis and correct math will go a long way Keith in helping you and your wife move forward.

@Carini Rochester is correct. A million dollars of debt for buying stuff you didn't need.....versus a million dollar loan for a cash producing asset are not the same thing. Once you clearly understand that difference you'll have understood what leverage means.

NEVER take rent in advance in place of all your regular due diligence. And even then, don't take rent in advance.....for all the reasons listed above. Good renters, with good credit, and financial good sense don't offer to pay a year in advance. Why would they take that risk? Where's the possible advantage? 

Hey @Samuel Moreno - your best bet will also be an FHA owner / occupant loan with 3.5% down - gives you the best leverage and experience as a landlord too. I wouldn't jump in though until you have at least 50K of liquid cash set apart for your investing. It's tough to start off with absolutely no margin......something is bound to go wrong, and with some cash buffer it's easy to weather those storms. As a first step..... I would take time to save at a fever pitch (living frugally) for as many months as it takes to get your savings in order. Best wishes.

Hi @Connor McGinnis, congrats on getting your plan together...

Obviously your Dad has many options to help you out...and that may be good.

If you ARE looking to take title in your own name, an FHA loan (owner occupant) at 3.5% downpayment would be great - ($17,500 on a 500K duplex) and you'd be able to cover other closing costs as well. Just my 2 cents.

Hi @David Sanchez - thanks for the post. I agree with Jaron's comments, and I would add this:

As a realtor, I do best and am most successful when my top priority is "what can I do to BEST help and support my client?" 

Conversely, a priority of "how can I get rich as quickly as possible?" - while an excellent goal in itself -  is often sensed by those around us as a negative.

I love your energy and sense of confidence - and challenge you to consider REI as a team sport - whoever collaborates best....wins.

An old Japanese proverb says "The quickest way to the finish line....is to take the detour." (loose translation). Or said differently, "don't believe in every short cut you hear about....."

@Jaron Walling 's final paragraph is gold.....go with that.

Hi @Megan Harmon... first of all, you need to find a good mortgage broker / lender who can walk you through several specific scenarios. Your comments indicate that you could use some advice in this area. There's good help and info here at BP, but you can save a lot of time by going right to the source. 

Are you planning to rent out home #1? (planning to move?) If so, a rental contract and rental income should open up YOUR resources to help with financing home #2. Moving...(changing your primary residence to the newest project) will always provide the most leverage. If that's not possible you move to plan B.

Just my opinion, but I think there would be wisdom in separating your personal relationship with the boyfriend.....from your business relationship with him. A clear separation allows each relationship to be richer. Just my 2 cents.....which is of course what you asked for :-)  Best of luck!

Hey Kevin, no advice on LLC stuff.....no right answer there....

However, in regard to Section8 investing you should really reach out to James Hamling, a realtor in the Twin Cities area of MN. I found him super helpful on that topic. Not sure of best contact...Here is the bigger pockets URL:

https://www.biggerpockets.com/co/The-REI-REALTOR1

Hey @Dylan Bennett, definitely get it out there on Facebook marketplace and Craigslist.... yes, unfortunately there are scams out there.... but it shouldn't be a problem if you have a tight market. Just have your vetting systems in place. What sort of rental needs are there in your neighborhood?