All Forum Posts by: Robert Crawford

Hi BiggerPocket community,

We are working on a new startup with the core idea of crowdfund investing. Allowing anyone to invest $1,000 and up into vested real estate cash-flow deals. The thought is to make a monthly passive income through Real Estate accessible to everyone.

Let me know your thoughts on this idea. It will help us gage whether we should move forward with the mess of legalities to make this happen.

You can try two things:

1. Write a letter to the bank on record (call and find out who the asset manager is) and let them know you're interested, at least they can let their preferred realtor know.

2. Contact a Realtor in your area that specialized with REO and may have a relationship with the bank.

There is a legal process that happens and an internal bank process. Makes it more difficult but picking up the phone and trying to reach the right person at the bank could lead to something.

I think I can help you with two major points. The way I recommend clients to look at cash-flow property is discovering two numbers. 

Calculate your Deal

The first calculation is the profit and loss for the property without finance payments. This will include everything from vacancy rate (25% is lender standard), maintenance, home warranty, insurance, marketing and taxes.

This will give you the actual cash-flow of that property. For example (quick and dirty example), you acquire a three unit property, each with rents of $1,000 a month. That would give you a monthly revenue of $3,000 per month or $36,000 per year.

Subtract expenses, for an example $500 per month. That means $2,500 in cash is produced each month. 

Find your Break-Even point

Now you know that this particular three bedroom property. Let's say the value of the property is $500k. If you're a fellow BPer you probably already knew how to get to this point, then you go over to a mortgage calculator and see how much the monthly payment will be. This is fine, for a quick estimate but your next step should be calling a great mortgage broker. Let him know the numbers and tell you some financing options that will leave you cash-flow positive. 

He may say it's not possible on some deals, others you might put have to use more cash, but more times than not they will be able to put you in a good position for positive cash-flow each month. That's the main goal, a check in your hand month after month.

Michael,

Nice to meet you. I'm a bit north in Santa Monica but like your passion. Let me know if I can help in anyway.

Why are you trying to put you money into a Single Family Home investment? 

It's hard to gauge your market from the information given but could you purchase a multi-unit building for the same amount?

Using the address is a good idea but don't put your name or company.

I just finished reading his new book, "master the game" which is his financial advise and he does miss the mark on real estate. Comparing appreciations and monthly cash flow of real estate to inflation and stocks, real estate is undoubtedly the winner. A home bought in 1950 in Los Angeles for $10,000 should be worth about $100,000 if you only factor in inflation. Instead it's more likely to be worth $1 million, beating inflation ten fold. That does even factor the monthly income of the property or the ACTUAL USES. Can you make breakfast with your stock?

It's unique for each client. I refer to ATPP (accounting tax payroll partners) Google them and ask for maya. She will be able to give you an estimate.

Yes unless you can schedule them back to back or if it has a lock box on the property. Both agents will also need to complete and agent visual inspection.

The first step is to secure financing with a great mortgage broker or hard money lender. 

Once you have a pre-approval letter and/or proof of funds (bank statement) you are ready to begin looking for property. Find a great Realtor who can help you locate a property and do a proper cost analysis to show you the potential profit and cash flow.

Let me know if you would like a referral for your area