All Forum Posts by: Lou Castillo

Tershant,

Let me begin with a disclosure that I have a real estate training company and that I do have a mentorship program so of course I am somewhat biased.

Having said that, I also want you to know that I have been investing since the early 1990s and I felt some of the same frusrations getting started that you are feeling right now.

REI clubs are fantastic for networking, for getting specific questions answered, and for building great relationships. I also highly recommend having a mentor. A mentor (who has your interests at heart) can significantly increase your rate of success.

Before you select a mentor make sure that you kno what niche of real estate investing you want to start with, then find the mentor that specializes in that area. Purchase some of that person's less expensive products first and make sure that you like their training style and that they actually deliver information. Then ask to meet the person who will mentor you -personally. Many of the mentorship programs out there are sold by a sales team, and then you are assigned a mentor. You want to make sure they have the right experience and that you get along with them.

I never accept a student into my mentoring who I have not personally spoken to first so that I can make sure that I understand their goals and objectives and that I can help the reach those objectives.

Bottom line answer, mentorship will make a huge difference in your success - just find the right one!

THe advice I give my clients about investing in real estate is to use as little to none of their money. To goal is to leverage resources to maximize your returns. Sure you may give up a little ROI on the one property, but how many more properties can you do if you leverage other people's money. THere are plenty of deals that will support the additional interest cost to use outside funds.

THe most important tsks taht you can focus on is marketing ot find more motivated sellers and building your buyers list online. Lay out a marketing campaign for the next 4-6 monthsand be sure to follow it without exception. With a steady stream of leads coming in and a large wholesale list the rest of your tasks will become self evident becasue your business will be so busy.

I assume that you have a buyers list already and asking the best way to market your deal to your list.

The best way to market a property is to send your list an email that tells them you have a great deal and give them enough info to get them interested enough to follow a link to yuor website. On that site you should have all of the information they need to make a buying decision. Include pictures of the house. Pictures of the street; and pistures of the comps you used to establish value. Adding audio andd video will make the site even more powerful. YOu can also follow-up with fax blasts and voice blasts.

If I misunderstood your question, let me know.

I agree with Jon. Just a couple of additional thoughts. In the wrap scenario, you do have a valid mortgage that you can sell. You could find a private lender to antie up, but they'd have to be willing to stay in until the wrap matures.

What I do instead of a wrap is a $1 2nd mortgage that states the 2nd can not be paid off until the 1st is paid. Any default on the 1st constitutes a default on the 2nd. The 2nd must be paid off in x years (usually 1-3).

That gives you complete control if they don't pay. You still need to recognize that even though you can foreclose, you will still have the make the payments on the 1st to protect your credit and to avoid them foreclosing.

I'd say it is time to talk with an attoreny and see what the code violations are and if they are truly on the books.

Good luck!

Fred,

talk to your mortgage broker to find out more about your potential lender's requirements. Here are some things to think about - they most likely will not allow for the property to be in the LLC name so at the time that you want to re-fi it will have to be in your personal name. What you want to know is whether they are going to want some seasoning in your name - in other words - require that it be in your name for a certain period of time.

You'll also want to check with your CPA about the tax implications of moving the house in and out of entities.

Be sure that you also check your hazard insurance and title insurance each time you re-title the property to be sure that the proper entity is insured.

Anytime you enter into business you should speak to your attorney and set up some sort of corporate entity whether it is an LLC or a corporation. Always protect your assets.

I always caution my studetns to be sure to have enough cash flow before investing in rental property. Remember that you will have vacancies and repairs that are needed. Don't get into properties so tight on cash flow that the least little bump in the road causes you a problem.

Also, look for crative financing techniques so that you are not having to tie up your personal credit. You should also start building your business credit portfolio so that at a point in time in the future you'll be able to borrow on your business credit and keep your personal credit clear.

What you really want to do is buy the lien. You can buy tax liens and you can buy mortgage liens and any other kind of lien. You are not paying off the lien so that it is removed from record, you are buying the indebtedness.