All Forum Posts by: William B.

Because everyone will list all the main ones I will go with what I think is the best although it will likely be considered an outlier. The 31 chapters of Proverbs, KJV or Amplified(Amplified is very easy to read not so old-timey), even without the aspect of religion the insights gained for business and life in general from Proverbs is profound. 

https://www.biblegateway.com/passage/?search=Proverbs+1&version=KJV

(Disclaimer, I have a man crush for Christ, I am biased being that I feel I have been blessed beyond anything I deserve.)

If you read Proverbs (short read) and feel it was of value mention it and I will follow up with another one of my favorites. Wishing you the best in your endeavors.

@JasonDiClemente providing a real HML scenario is so valuable for those who haven't been through the process, good on ya for writing that out. I am writing this response not really to you but to those new investors who are trying to understand the HML process so I am elaborating on your post. Your point is that HML's are not the solution for those with little or no money, a cash partner is a solution. I would add that I have used a reputable HML lender that does front some of the construction costs but of course, not all, 3 draws of 1/3 the construction costs were provided, the first draw within the first week of the loan(the subsequent draws required third-party inspection of course) and the draws specifically state they are for material, not any labor, so a first time HML investor needs to be prepared with additional liquid cash assets as you may have to float some of the construction contracts as you mentioned being that most contractors want up to half of the contract cost up front. So my scenario was a 115k total investment cost (purchase plus renovation), 38K required for down payment and loan fees, and I needed 6 months holding cost liquidity, so they wanted around 50k in liquid assets for my loan scenario. The loan was only 86K however the down payment and monthly payments are intended to be the only costs I have to front from the HML lenders perspective. Additionally, the HML approved the loan based on the value of retirement funds, and other investment assets, my point here is that my HML lender wasn't just using the investment property to back the loan, it was overall financial health in combination with the value in the investment property. In summary, total investment cost was 115K, ARV 160K, required about 50k in cash, hopefully, that is a sobering data point for those thinking they are going to get 90% from an HML lender as a new investor. I would have benefitted from having this information laid out when I got started.

Something is distracting you from reality as an investor, any investor would salivate to have 1k passive income from a piece of real estate if this is truly cash flowing at 1k net cash flow per month you would be absolutely bonkers to sell it to free up 40K. If you want to give me 1K a month to have access to 40K I will give you a personal line of credit for a 1k per month payment. 

Your buying power won't increase by buying a condo and holding it for 6 months, chances are you are going to decrease your buying power unless you find a crazy deal on a condo that cash flows like crazy which is unlikely, Also only six months of holding will not be enough to count as income. You sound like a prime candidate for a house hack unless you have family or something that a duplex or fourplex can't accommodate( for instance, you have too many kids to stack into one unit of a fourplex).

Cash flow of $1000.00 bucks a month or $40K to play with? I don't see any legitimate argument for selling in order to free up $40k when you are pulling $1k monthly. If you are burning through cash reserves right now whatever you do don't get rid of $1k worth of passive income! Repeat what you did to get that duplex that cash flows at $1K a month. Good luck.

I agree with @Jason D. @Jay Hinrichs mostly, however, I would also say that there is always a way to make it work right now if you feel ready then find a way to make what you have work, get out there and start getting after it. I think you are on the right track with your strategy thought at the end of your post by building some profits to pool more dollars for bigger investments or more in quantity. There is a way to invest 10k, there are so many ways to fund a deal even with no money, the less money you have the harder it is, you will probably have to pool up with a partner as Jason mentioned but it will help to have your 10k of skin in a deal, that builds confidence in a partner. More valuable than the 10k will be to find a deal that has a high upside, lots of value in it, that will draw more partner interest than your 10K will.

The way I got started is I went out and found a deal that had high value-add(Large margin between acquisition and repair cost and ARV), the value in the deal made it easy to finance, I mentioned to everyone I knew what I was doing and let them know I have a deal I am trying to find a partner for and I found an investor rather easily because of the value in the deal, the deal attracts funding, get yourself a deal and you will find an investor. Be sure to have some potential leads for partners before you just throw hollow offers out there but again, if you find an appealing deal it will draw in the money. There are so many ways to fund a deal, you just have to make sure you are getting a deal worthwhile with plenty of margin.

To answer the question as to how you can fund a deal without using your own money, it is simple, you just make the risk worthwhile for an investor. For instance, let's say you are pitching a deal for a fix and flip and it looks like you have a solid plan, the investor has confidence in your endeavor; because you are a first-time flipper and or fledgling REI they know the investment is at high risk for failure to wasteful effort and you will likely take longer than advertised they are going to want the lion's share of the deal and 1st lien position. Having said that, if you have zero skin in the game, and don't have something to offer like experience or a trade skill, it is definitely a hard sell to an investor, you need to be able to establish confidence in you with the investor. Also, note there are several books in the BP bookstore about private funding/acquiring funding: Brandon Turner's "The Book on Investing In Real Estate with No (and Low) Money Down" Matt Faircloth's new book "Raising Private Capital: Building Your Real Estate Empire Using Other People's Money", Anson Young "Finding and Funding Great Deals: The Hands-On Guide to Acquiring Real Estate in Any Market", there are several more books out there on this topic. Honestly, I don't think you are being resourceful enough asking this question here, you could have easily done a google search and found much more information on these topics than you will find here in responses. I get it, the forum is here for the discussion but I want to encourage you to make every effort possible to find the answers on your own, exhaust all efforts to get the information you are looking for before asking people to answer the question for you, more often than not you will find the information on your own or you will refine your question to the point that it becomes interesting enough for people of solid intellect to respond to. If you have a unique question or scenario, or you have something that requires and salty REI's input then this type of forum is great for that.

At this point, without knowing more about your level of experience, you appear best suited to find a mentor or partner who has a year or two of experience, you want a mentor that is not too far ahead of you in the endeavor. You need to incentivize them to mentor you or partner with you, either you work pro bono for them or bring something to the table of value.

To your comment about "shady" or dishonest, I would encourage to you be as honest and forthcoming as possible, I don't know about you but I got into real estate because I wanted to do something meaningful, profitable for my family's benefit, I wanted to benefit from my level of effort rather than giving it to someone else, and most of all I wanted to make the world a better place by improving whatever it is I am working on; I want to be able to lay my head on the pillow at night knowing I did everything I could today to move forward in a positive direction and did so with integrity in order to prevent any form of regret. 

I wish you the best, I hope you find what you are looking for or build wealth in pursuit.