All Forum Posts by: Tommy Adeoye

Hello Avary ,

Welcome on board . Congratulations on your recent achievement. Do you have a niche or strategy that interests you? 

Are you looking to be an active or passive investor ? This is a great platform to equip yourself with the necessary toolset to get you started. BP has this functionality called the "keyword alert" that notifies you once anyone in your area posts. Otherwise, You may also go to the network section and just search for who investors in area and order your results by top contributors. Connect with them and have them invite you for a meet up around the area.

Good luck in your endeavors.

You are about to embark on a journey that will be accompanied with potholes, bottlenecks , flat tires but dread not so long as you are resilient it indeed will be rewarding. Real estate is very forgiving. I think the first step would be to invest in yourself - Books, Blogs, Podcasts. Post questions and answers. You would have to Immerse yourself completely every day in your one year of wait.  With vast knowledge, few mistakes are made.

The moment you feel you are comfortable and are able to communicate with a lender and a seller, then pick a niche and strategy (one for now). With your bag of knowledge , you may not have to wait very long to get started. 

To answer your questions.

1. If I decide to buy a property that needs to be rehabbed, would I need an FHA loan or a 203k loan.

If I have to choose between both, I will go with 203K. However, If I caught a deal on the property, I'll go conventional or better yet bring in a partner that is experienced , learn from them , work a deal to put myself in an equitable position with nothing out of pocket and on to the next. 

1.a. = if I'm using the BRRRR method, what are the pros/cons of hard money lender vs, a loan from a local bank.

Think of hard money lenders as your loan shark with higher points but may or may not require strict stipulations unlike a conventional loan which is usually what you get from a local bank. I strongly recommend you stay away from hard money lenders until you have had enough deals under your belt.

2. I'm in the Baltimore area, so is anyone familiar with good areas to look

Set up keyword alerts on your BP settings so you get a notification the moment someone posts a topic concerning the area you desire to invest in. Alternatively, there are some investors on here that are willing to help - connect with them or message them. Be courteous!

3. has anyone had experience house hacking specifically in the Baltimore area.

Same answer as number 2

4. is it recommended to hire a financial advisor or a CPA when one begins to partake in real estate, (to help with tax questions).

If you are just starting off, It is probably best to hold off on hiring a CPA until maybe after your 5th door. There is absolutely nothing wrong  building a team and having a CPA in your team. Is it highly recommended? I don't believe so.

You are welcome!

@Ryan Copeland

Scenario 1. You get taxed an ordinary tax income from the income realized when you flip the real estate property. I believe at that point it is considered self-employment tax(capital gains).

Scenario 2. When you BRRR the property, you rent it , you do not sell it , your rental income after expenses is subject to ordinary income tax but not considered self-employment tax.

Scenario 3: ( Which is the scenario you fall under) Your cash-out refinance is considered borrowed money from the bank and can not be taxed. 

Way to go @Jorge Rivera . Congratulations on your first house hacks. What's the next move from here?

With Experience, knowledge and hustle, I don't see why a hard money lender or a private lender would not want to take a risk on you even with a fair interest rate. One would probably be asking oneself at this point, I am still working on gaining the experience, acquiring knowledge and adopting the hustle mentality. How can a newbie like me get a lender to grant me a loan with a lower percentage.

You have few options - Give up and go sit in front of the TV and binge watch "Tiger Kings" . Alternatively, gather the 100+ private lenders online and on bigger pockets and reach out to every one of them - that there is the hustle.

Now, some of them will say No , some- maybe with very high interest rates, lucky enough you may a yes with stipulations and a fair to low interest rate . Thick skin and experience you would have been developed during this process.

Knowledge- Analyze deals, webinars, forum posts, podcasts, contact realtors, make an offer every week. 

What knowledge does for you is figure out creative strategies to obtain financing and/or the ability to re-evaluate your options even with a higher interest rate.

Analyze your flip and bring in a private investor (many of which you would find on BP) , If you could bet your life savings on the deal.

@Justin Miller When you say Cash on Cash calculator, are you referring to CoCROI ? Cash on Cash Return on Investment ? Is this for a rental property , wholesale, flip ? 

As a non-pro user, you are entitled to 5 calculator uses on Bigger pockets. I have found the calculator pretty resourceful and it seems to be the closest thing to perfection out there. Again, you first need to identify your niche and strategy before hopping on there . I suggest doing a search on how to use the calculator and also watch the video contents/webinar for guidance. 

Welcome on board.

You may find them at bigger pockets or a REI meet up closest to you. Another way would be to partner with a high school colleague/friend/family members you know is verse with numbers. There are many other ways - just ask your brain how can I get a partner and it will feed you with ideas.

As per figuring if this is something you can do, how about obtaining a Real estate agent license and work for a broker , learn the necessary skills and maybe earn some money while you are at it. I'm not sure what your source of income is at the moment but with a big gap in employment you may run into impediments getting lending/funding.

Your strategy depends on your goals. With that being said, do some research and find one strategy to adopt ,see how that works for you and then run with it. If you don't like it , you can change anytime. The real estate business is forgiving.  

@Brad Haughton Opening a separate account with a different branch or bank for the purpose of your real estate investment is not a bad idea.

Moreso, if you are not great with numbers , math, accounting, you should consider partnering with someone that's strong in that area while you focus on your area of expertise/strength. 

@Brad Haughton As you would your personal account. Almost all banks have mobile and/or web applications that help keeps tabs and notifies you of every income and outgoing expenses. It should be fairly easy to manage. Why do you think you would have any problems managing the accounts?

If you are going to be an active REI, you may consider sharpening your accounting and bookkeeping skills.

@Brad Haughton  Although not in the same domain, there is a design principle called "Separation of concern" in the world of software engineering. This principle simply supports for separating a computer program into distinct sections such that each section addresses a separate concern.

Keeping your RE investment finances apart from your personal finances may be beneficial. Within your investment account, you may need to further consider 2 separate accounts - one for income and the other for expenses.  

It shows some degree of professionalism IMHO.