All Forum Posts by: Van Blackman

@Michael Cerni -

Here are a few I've heard of:

1. Iron Bridge

2. RMAC

3. Barnett Capital

4. Finance of America

All of these lenders are active HML's in Chicago, but a few of them might have refi options, or at the very least have preferred refi lenders that they can refer you to.

Hope this helps!

Thanks,

Van

@Joshua Aceret,

Hi Joshua! First off, congratulations on making the decision to become a RE investor! That's very exciting, and believe me, it can be very rewarding if you know what you're doing. I have a couple thoughts for you based on your introductory post:

1. It's VERY important that you know the areas that you're going to be investing in. Believe me, you don't want to buy a house somewhere that ultimately becomes a liability for you. That will put you on a backward trajectory in your RE career. You mentioned that the areas you're looking in are less desirable. The reason why rentals work is because you're buying on the hope that somebody WANTS to rent your property so that you can collect a steady cash flow. If the crime is bad in an area that you're interested in, or it's not exactly desirable, that might cause a problem for you down the road. An empty house will put stress on you financially. Even though there are zero guarantees in real estate, you really want to try and have as much of a "sure thing" as you possibly can before ever buying a property. If you don't get the rent figure that you're budgeting for, you could potentially lose money.

2. If finding the funds to finance your first income property is an issue, do not worry! Other than finding the house, this is one of the biggest problems investors face. Here's what I would recommend: do you research on all the available hard money lenders you can find. There are some with a lot of good, low rates to choose from depending on your credit. You'll need to leverage as much money as you possibly can. Why buy a house with your money when you can use someone else's?

3. The last thing I want to mention is timing. If money is an issue, remember that it's okay, and that it simply just might not be time to invest for you just yet. Rental income is there to take you to the next level financially. If it will strain you by purchasing a income house right now, I would hold off for a bit, continue to build your capital, and revisit your first deal in a year. Who knows? You might be in a much better financial position then to find a "sure thing" investment in a desirable neighborhood.

Bottom line: don't be quick to buy a property just because you want to, make sure that by doing so will not strain you financially, and ALWAYS know what you're getting into.

Hope that helps! PM me if you have other questions, I'd be happy to help out. Good luck!

Best,

Van

Hi @Michael P.!

It sounds like you have a decent deal in hand! $38k-$120k is low enough to start out comfortably on your first income property. Couple notes:

1. You mentioned that the area has a little crime - that's okay. Sometimes you need to simply "go where the deals are". If the better deals lead you to up-and-coming areas that haven't completely gentrified yet, so be it. It's a good long term investment, which is what we're all looking for in the first place. I can tell you that here in Chicago, there are areas where you can pick up homes that are worth close to $75k, but will rent for close to $1500 p/month. How's that for a return? You don't want to put yourself in danger, obviously, but there are deals out there if you know where to find them.

2. A good cash-on-cash-return for me would be 10% or more. If you can get into the double digits, you're in pretty good shape.

3. If the property is currently occupied, the tenant probably won't be expecting you to do too many repairs initially after the purchase. That's my experience. It's also Section 8 which guarantees your monthly rent. That, coupled with a hint of crime that we already discussed, it sounds like taxes may be low here. Just a guess. If so, even better! That will keep your overhead low so you can pocket more guaranteed rent.

Ultimately, if you already found a property that fits this description, I think you should definitely, seriously look into it. As long as the crime isn't terrible it sounds like it could be good for your first one.

Hope that helps! Let me know if you have questions! Always here to help out.

Good luck to you!

Best,

Van

Hi @Michael Volek!

I come across this quite a bit, but do not worry, it is completely natural to be a little hesitant before taking on a LARGE investment such as real estate, especially on your first one! Here are a few tips that might help you out:

1. Do you have anyone on the ground in any of the markets that you're looking to purchase in? Could be a real estate agent, or contractor. You'll need someone that you trust to make sure that you can do repairs for a reasonable price. If you don't have one, how flexible is your schedule? Obviously you probably won't have the time to make multiple trips to the states per month if you live in Abu Dhabi, but are you able to visit once per month, or once per quarter to view properties yourself? This is key! I would never recommend buying property sight-unseen. I sure don't!

2. Do you have a reliable source that currently feeds you good, solid deals? A real estate agent, or skilled wholesaler is required. Not only will it minimize your time used looking for deals from abroad, but only people that are local and "on the ground" every day are going to be able to find the truly good deals. If you have someone sending you good leads on a consistent basis, this will maximize your time and minimize your stress.

3. Make sure your fist deal is a small, no-brainer! Please do not make the mistake of biting off more than you can chew on your first deal. Believe me, I've seen it happen before, and you don't want your first deal to discourage you from doing more.

4. This is the most important one: JUST DO IT! You're going to learn more on your first deal than any blog, podcast or book could every teach you. Play it somewhat safe, but at the end of the day, only action will propel you to actual investor status. Repeated and consistent action will make you a successful investor.

Hope this all helps, bud! Be sure to PM me if you have any other questions, I'm here to help!

Best,

Van

Hi @Kamran Ahmad!

Welcome to BP!

We buy properties in San Antonio, Austin, Charlotte, and (most recently) Chicago. I can tell you right now that between all those markets, SA is definitely our most active market. The properties are very cheap there, and as you said, the cash flow is good on all of them. I think we're currently buying close to 15-20 per month there right now...

That being said, there are deals in EVERY market, you just need to know where to find them (problem #1) and then you'll need a reliable contractor to do the repairs (problem #2).

I would suggest moving to Austin - you can buy deals there, and SA isn't too far away from you. Austin is a great city, with a lot to offer and explore. You can't go wrong with Texas real estate either.

Hope that helps! Feel free to PM me if you have other questions!

Best,

Van

@Dana Alfirevic,

Congrats for joining BP! 

Let me know if you have any specific questions. I'm here to help!

Good luck with school!

Thanks,

Van

@Steven Royster, first thing you need to do is build as large a buyers list as possible. As you will come to find out, you won't be able to contract a deal to wholesale if you don't have anyone to wholesale it to. You build your buyers list by throwing bandit signs ("I Sell Homes to Investors"), attending any and all meetups as possible, scouring Facebook, Instagram, BP, LinkedIn, etc. for leads on investors. You should stop-in on all dumpsters you see in neighborhoods, as those are most likely currently being rehabbed by investors. Visit the auctions for low hanging fruit. Ask for referrals from everyone, and get your name/brand out as much as possible. That's #1.

#2: Once you've built a buyers list, the next step naturally would be to find the properties. You do this by knocking on doors, sending letters via direct mail marketing campaign, meeting with contractors, getting more referrals, etc. 

The way to go about finding prospective buyers and sellers is simple, but never easy and I alluded to it above: Get out and meet people as often as possible. Have a goal to meet 20 new people to grow your business everyday. After you have all the pieces, you have to put it together. Contract your first deal, get it to your buyers, and see if you can get it sold.

You may have a lot of questions starting out because it can be daunting as a new wholesaler, but after time it will get much easier. Good luck, and let me know if there's anyway I can help!

@Steven Royster,

Welcome! And congrats! 

We're always looking to partner with young, enthusiastic professionals such as yourself. 

Be sure to let me know if you need any help, or have any questions. Always here to help out.

Best,

Van

@Crystal Smith 

Thank you so much!

Hi @Tony Wooldridge !!

I love your question because it brings everyone back to "Why am I doing this?" 

I've been reading a lot of personal finance books lately. One of the more recent ones was Tim Ferriss' 4-Hour Workweek. In it, has asks the reader design their own lifestyle. What does it look like? And how much money would you need to attain it? The key, he said, is not to be shy. Do you want cars, houses, toys, etc. Great, then figure out how much it would cost to live your ideal lifestyle and go get it. But what if you just want respect and admiration? 

I imagined that you would get quite a bit of different responses to your question on this topic. It's great to note the difference in everyone's freedom number. Some very high, some humble. I guess the key question is: when is enough enough? Is it ever?

My freedom number is obnoxious. Reason being, we're in a very competitive space, and the respect goes to the top players. Then again, respect is just as subjective as success.

Great thought-provoking post. Good luck!