All Forum Posts by: Tyco Bronye

I'm still in education mode, I haven't purchased a house besides my own. I'm not fully understanding why private and hard money is so necessary. It seems that if you were solely in the business of flipping you would soon be able to fund your own projects in a short time. Also it seems that banks loan fairly easily on 4 properties so you could have 4 flips going at a time at a much cheaper bank rates.

Let's say I'm starting out with my first flip. A house in need of rehab is 60k. I need 15k for down payment and 30k for rehab I spend that 45k. Then when I sell I get all that money back plus 15k in profit so now I have 60k in the bank.

I do the same thing over and over now I have 75k in the bank, then 90k, 105k etc. Lets say you did a house per month and made 160k a year. It seems like even lending from banks would be unnecessary in a relatively short time (under 2 years)
At that point you could just buy everything with your own cash and eliminate lending entirely.

What am I missing?

I am not a seasoned real estate person so this may seem like a beginner question but I've not seen this talked about. It seems like a conflict of interest that a buyers real estate agent gets paid 3 percent of the purchase price. In the agent's interest they would want the price as high as possible right?

In my own experience I've made bids on personal residence houses with two different realtors. They both recommend I offer listing price. Of course they would do this because they make more money this way.

I see tv shows like Property Brothers and the buyer's agent brother's first impulse is to offer less than asking price on the house. This will actually make his commission less, why would an agent do that?

It would seem like a better idea to get a commission based on how much less you got the property for your buyer.

I'm probably missing something......seems wierd

A friend of mine claimed chapter 7 bankruptcy about 6 months ago. It was the result of a down payment loan he made on a rental property back in 2007. He makes money playing poker. He told the bankruptcy place that he works for his parents and shows that he makes I forget the number but around 20k a year.

I was telling him he should do wholesaling but he says he can't make more than 20k or so or that will effect his chapter 7 bankruptcy. I asked him when he can start making more than that and he says he doesn't know.

Does anybody know when you can start making more money after claiming chapter 7?

I have a friend here in Minneapolis who purchased a triplex in 2007 by a college to rent out. They had it about 2 years then let it go into foreclosure because the house was worth less than the amount owed on the mortgage in other words "underwater" . I can't understand it because the rents never changed, only the selling price of the house. If you never intend on selling the house why would you care what the house is currently worth on the market?

Yes I understand equity and that he couldn't get equity loans but he had no intention of doing this. His only response it "it's underwater"

Is there something I'm missing?

He's a guy that wanted to be rich through land lording. Now a foreclosure took him out of the real estate game entirely or so he thinks. It seems like that bubble bursting in 2008 would have been a good thing for him because he could have bought his next rental house for less money.

Any thoughts on this?

Hi,

I'm Tyco from Minneapolis, male, 34 years old. I want to get into the real estate game and stop with the 9 to 5. I'm wondering if my plan is the wrong plan. I bought owner occupied house in a nice suburb of Minneapolis 2 years ago for 87k. It needed to be rehabbed which I did all myself over a year and made my own basement apartment, I rent out the top part of the house. I got it appraised and refinanced a few months ago for 145k.

I got the real estate bug at that point. I thought about how many hours I put into the rehab doing most the trades for the first time and I thought to myself if I could just put 8 hours a day doing rehabs with my own labor on the properties I would make substantially more per hour than I do at my day job.

My initial plan was to buy a house off the mls in need of rehab, not in the ghetto but rather in the same price range I bought my first house maybe 60 to 90k. I have been granted a HELOC on my owner occupied house of 30K. I want to use this and some money I have in the bank for 20 percent down payment on an investor property. I would like to be a landlord at this point because the notion of someone else paying for the mortgage is attractive to me. I liked the model of a guy with a podcast named Ronnie Adams who owns around 35 properties does his own property management. Eventually I would like to quit my job as I see it as a waste of time compared to the forced equity I could put into my own rental properties.

Does anyone think this way?

I have heard 1000s of hours of podcasts over the last few months and no one seems to do the work themselves because their best use of time is finding deals. I guess this brings up the question how much do rehabbers charge per hour? I belong to a plumbing union and we cost customers 150 bucks per hour. I think to myself I make 25 bucks per hour at my current job. It seems like with my sweat equity this would be a good living.

Your thoughts are appreciated. [b]