All Forum Posts by: Waylon Gates

@Zachary Foust First of all congratulations on make the decision to get in to REI and making the first steps to completely changing your life.

I have done quite a number of deals and I have solidly determined that there is no reason to be a licensed agent.  If you are using the commission to justify the deal than the deal is no good.  I look at it like this, a real estate agent gets paid to be a real estate agent, a contractor gets paid to be a contractor, and my accountant, lawyer, etc all get paid to do their job.  If I were trying to do all of those jobs I wouldn't be able to focus on my investing.   I have met more people that were once active realtors and investing and now are just investing and stopped trying to do everything them selves.  All of that being said, I would make sure that you have a aggressive and knowledgable agent that can represent you very well.   I would say that my agent has helped me make many times more money than what they have earned in commissions.  A good agent will be involved in the local real estate agent community and let people know what you are looking for, this exact scenario has put me in the position to buy many off market deals.  If you are going to be an agent and an investor you will limit the time that you have to be a great investor.  

I know that there are many people who will disagree, frankly those are people who are trying to justify the way they run their business and will never know how it would be if they weren't an agent.  I would try to find an investor who was once an agent and see their take. 

Most of all, whatever you do just treat it like a business, not a hobby.  Have your business make money for you by putting the right people in place to do the legwork of your business and you just spend your time working on your business and not in your business.

Waylon

Hi Daria,

Many banks will allow you to put the home into a land trust without affecting the Due on Sale Clause. I would try contacting the lender and see what they say. You probably don't have a problem as long as your putting it into the name of a trust. If you are trying to put it into the name of a LLC there might be a problem. If I were trying to get an LLC to own the property I would put the property into a trust and then make the LLC be the beneficiary of the trust. That way from the point of view of the bank nothing would have changed from the trust holding the property (assuming that they are ok with you putting it into a trust).

David, I would be curious to what you propose an ideal mix would be.  Are you willing to buy at less than 1% if you think you can force appreciation to achieve better results or do you think that generalizing a rule is misleading?  Possibly more analysis may prove more (or less) opportunity in areas that others may skip because it looks to marginal based on a rule.

@David Faulkner The vacation rental market is pretty good here if you market the property well, but the price of real estate vs rental rates makes it a poor investment in my opinion.   Many people do it to help pay for their personal vacation home which helps justify the 'bad' investment.  It is seasonal, but still steady just different clients, ex. Californians in the summer and 'snowbirds' in the winter.  I have been pretty happy with selling houses with financing, I get an initial return of 10 to 12 percent, and then depending on when it pays off the returns could be as high as 30 to 40 percent annualized. The average appears to be closer to 28 percent.  

@Mark Nolan Thanks Mark!  I am thinking that i should be able to take advantage of both in the form of ROTH and using after tax dollars and thereby allowing me to take advantage of compounding effect of tax free growth.  I would like to learn more about the whole picture and how it would work within my other investment strategy with regards to tax free growth.   Is there anyone at your company that you would recommend for me to talk with I would greatly appreciate your refferal.

I have been on the site for nearly a year, but I haven't been contributing. I have listened to most if not all of the podcast. Thanks for all of your support, and if anyone has questions about foreclosures in AZ, fix and flip or boy and hold SFR i would be happy to help. I also have limited 1st hand experience, but a lot of knowledge in owner financing and notes.

@Mark Nolan I am interested in learning more about solo401ks. can you help me? I currently use my ROTH IRA for investing, and am learning that a 401k may be a great additional vehicle.

@Account Closed could you elaborate on how we could work together? I am always looking for additional people to be a part of my team.

Another way to ensure that your buying property at prices that work for rentals and ensure yourself enough for unknowns is to base the purchase on a simple formula..  

Leveraged-

1/2 of the monthly rent = the maximum payment you should have on the property.  

Cash Purchase -

monthly rent x 84 = purchase price

These are numbers that I have found to be good rule of thumb numbers.  As you get into more real estate investing you will learn what specific costs are in your market.  Some may be higher and some lower, but I have found that generally speaking the formulas above have treated me well.  

Most of all, get in the game..  you can't win if you don't play.  

I would not assume anything about wether there is or is not a mortgage.  I would also not concern yourself with what their current situation is or is not.  What matters to you is the deal that you will need in order for the investment to make sense.  I have found that the best way to get deals done is to start the conversation.  After working with the seller you will learn what they can and can't do.  You will also learn what they are or are not willing to do.

Most important of all is if this deal isn't right then keep looking until you find one that is.

Best of luck to you!

-Waylon

Hello to everyone on BiggerPockets!!  

I am Waylon Gates and I am a new member of BiggerPockets.  I have been involved with real estate investing since 2009.  I started out as a software company providing foreclosure information to investors and realtors.  The software company died fairly quickly as I realized that there was way more money in just using the information to do deals rather than basically begging people to pay for the information that I had.  

In March of 2010 I bought my first foreclosure.  I had all of maybe $45 to my name.  I borrowed money from two people at crazy interest rates and bought a house at the court house steps.  A simple fix and flip; clean, landscape the yard (in Arizona that means spread some gravel), a couple new light fixtures, and touch-up paint.  Two months later the house sold and I was able to put just under $30,000 in my pocket.  

I had become a real estate investor.  I wound down my computer consulting business and transitioned over the next year to being a full time real estate investor.  I had no idea what I was in for, but I was glad to not be working on computers any more.  

Fast forward to today and I have just over 400 deals to my credit...   No I am not a realtor and only a small handful were wholesale deals (3 to be exact).  I have managed to go from broke to flipping 100's of houses in just a few years.  I have a few rentals, but the vast majority were fix and flip. 

Currently I am changing direction with the market and starting to do some new construction, creating notes, and still flipping a few properties.

I am now wanting to meet and network with others that have the same drive and desire for getting the most out of life.  I find in my local area there aren't very many people that are close to my age (mid 30's) and pushing themselves to the next level.  

Thanks for reading my introduction!

-Waylon