All Forum Posts by: Trent Stone

Get EVERYTHING in writing. It's not that you don't trust the person, it's just that people almost always have a difference in expectations and there will always be problems. Decide what is most important to you. The first time I started a business with a friend I told him, "your friendship is more important to me than any business". Did I lose a little bit of money when we disagreed? Sure. But we are still great friends to this day and I don't regret it for a second. I was willing to lose everything I put in the business to keep his friendship. Get a solid joint venture agreement, have the tough conversations if crap hits the fan, and be sure you are on the same page and I think it could be a fantastic experience. I hope it goes great for you!! 

Yes, absolutely you can, not technically a BRRRR, but yes, it's possible.

The way to do it is to pay cash or get a hard-money loan then refinance after the rehab is complete. If you go the traditional route you would have to wait 6-12 months for "seasoning" before you could refinance the property and get a traditional mortgage. Alternatively you can buy the house by whatever means and have the title company include your rehab costs in your closing statement. Then you don't have to wait for seasoning and you can refinance %100 of the money you put in or %70 whichever is less the day you are done with your rehab. If you go this route, just make sure you get a GOOD deal, or the appraisal will come in low and you will have to pay a lot more out of pocket than you would otherwise have to. Feel free to PM me if you have any other questions. Good luck!!

All that matters is supply vs. demand. If there is insane demand, then don't worry at all. If a giant Amazon plant just closed or something, then yeah, run for the hills. How long have those rentals been sitting? If nothing has been sitting longer than a month, then you're golden. If those have all been sitting for a year, then yes, be concerned. What I did when I first started investing was to contact 5 property managers and ask them for market specifics about the type of rental I wanted in specific areas. I quickly learned who was a good manager and I got invaluable market knowledge for free. I HIGHLY recommend doing the same thing, they will tell you exactly what the rental market looks like for your property. Good luck!!!

If you are more concerned with cashflow, I would absolutely recommend going to a different market and getting a mfr. I've heard so many horror stories about the deadlines for 1031's, just make sure you have all your ducks in a row and have a great 1031 intermediary before you pull the trigger. Florida has good cash-flow markets, KC, Indianapolis, Dallas/Austin, Birmingham, few other places. I'm doing all my investing in Indianapolis right now. Just my opinion. Best of luck to you!!

If you plan on investing where you live, I don't think it's a bad idea. I have my license in Utah but I invest in Indiana. Utah is way over-inflated right now, so I wouldn't get my license here just to invest here. I think if you want to learn the business you'd be better off reading David Greene's long-distance investing book to gain all the skills regardless of if you have a license or not. If you actually want to be employed in real estate sales, great, if you just want to be an investor, then it's not a huge leg up. 

The stock market is just gambling unless you are in it for the long run. As Robert Kiyosaki says, putting money in the stock market and hoping it does well is not investing, it's just trading and speculating. You have no control over your money in the market and if it tanks then you could lose everything. You have a great deal of control about when and how you invest in real estate, and if it all tanks you still have a physical asset to fall on. You might hit the jackpot with stocks, I have before, but just with play money, not with my investment money. Average P/E ratio in the S&P is about 15 right now. That means they are charging 15 times what the company actually produces in revenue. That's a lot of speculation and good will. Real estate by far has my vote.

Lots of people are doing the refi and I think it is a fantastic idea. You are spot on, rates are at an all-time low, no better time to capture that equity than now. I might stay away from the ARM just because they have been a little volatile. I have a client doing a refi from an ARM to a 30 year fixed for that very reason. Shop around and get you a good mortgage broker. Good luck!!

If you are willing to do the work you can get much better rates and terms by finding a property where you have instant equity or can add equity easily. Go to meetups and network with wholesalers in your area. Lenders really only care about the loan to value ratio (LTV). If you find a deal with a 70% LTV, that's like having a 30% down payment.

As a flipper I won't go above 70% LTV in case I need to refinance the property and hold it as a rental. I just got a deal under contract for $110,000, and only needs $15k in rehab to be worth $180,000. 125/180 = .694. If you find a good deal, have decent credit, and a good debt to income ratio, then you should have no problem finding financing. You also can definitely go the traditional route with 3.5% down and buy of the MLS too, but remember that FHA will only lend on what the property will appraise for, and it very often will come in lower than asking price in a hot market, so be prepared. Let me know if you have anymore questions.

Happy hunting!!

Congratulations!! I'm sure everything is gonna be fine, people in general are just like that. I would get them something like a $25 Amazon gift card or something and go introduce yourself. I think that would be a great way to get them to want to talk to you, break the ice and show them that you are a good person and a good land lord. I'm willing to bet it will pay dividends in the long run. 

Next time, make sure that you get the leases and rent rolls during seller's disclosures or the due diligence period. I got a property UC and went to talk to the tenants before the seller's disclosure deadline. What they told me was way different from all the numbers the seller provided me on the back of a napkin (cheesy Excel sheet he threw together in 5 minutes). I asked him to provide leases and proof of income and he couldn't. I saved myself from a terrible deal just by asking for documentation the seller should be providing already. So, just make sure you are a smart buyer, that's what due diligence is all about. Trust but verify!!

Hope it turns into a great investment for you, good luck!!

ALOHA!!! Welcome to BP. I'm an investor and Realtor here in Utah. I've dabbled in wholesaling, but I'm not a "wholesaler". Wholesale deals are hard to come by here in Utah and the number of distressed properties to the number of investors is very low, so your margins and number of deals would be pretty slim. Not to say it can't be done, it would just take more work and a larger marketing budget than other markets and you might not make as much. San Antonio is not a bad market at all, so if you have contacts there already then it might not be a bad place to start. Austin and Dallas are also fantastic markets right now. A few places in Florida are hot as well. If you can swing it in any of those places I would say go for it. The most important thing is to have boots on the ground who can show up to sellers appointments and have people who know the intricacies of the neighborhoods where you are buying so you can gauge ARV's and offer prices effectively. If you don't know the markets where you are wholesaling you could get some really bad deals that will kill you. You don't ever want to get a property UC that you can offload. The smaller counties in Utah do have higher margins, but fewer cash buyers, lower inventory, and more risk.

As an investor, I look to see if I have multiple exit strategies, ie. BRRRR, wholesale, flip, etc. When we do a deal we want to be all in at 65% ARV, though I have found investors here in Utah who will go over 75%. For that reason me and my partner are doing all our investing in Indianapolis right now. But, when you get a deal, I would make sure that no matter where it is, that it is actually a GOOD deal. I get so many "deals" from wholesalers that have inflated numbers and don't even clear 80%ARV. Be conservative and realistic with your numbers and provide your cash buyers with real quality and I have no doubt you can be successful wherever you decide to start your wholesaling business. Don't be part of the 90% of wholesalers who suck or it's gonna be a rough journey for you, lol. We'd happy to be on your cash buyers list and look at any deals you find.

Let me know if I can help in any way. Best of luck!!