All Forum Posts by: Wren Martin

@Gordon Olson just like @Cole Raiford and @Travis Ward-Osborne mentioned, private investors are looking for a way to put their capital to work.  Many of them, myself included, are investors who over time end up with more capital than deals, or time to work the deals.   You not having any credit because you've paid Cash up to this point in your career hurts you at the Bank but not as much with a private investor or hard money lender.  The property, which will be your collateral, along with your business plan are the most important factors in determining if an investor will make the loan.  They will look at your credit history and background but that is secondary to the real estate.  Find a good enough deal, put together a sound business plan, and you will find an investor willing to put his capital to work in your property.

@Sherise Stewart - Buying a duplex and living in one unit can be a good option if you can find a good deal.  Buying a triplex or a fourplex might even be a better plan.

I always hold my properties in an LLC. Depending on the rules of your State consider setting up an LLC right away but make sure you check with a local professional first, as the rules are different in every State so you want specific, local knowledge before creating your new entity. A local RE attorney and/or CPA with the specific investment real estate knowledge will give you the best guidance for your needs. You will need these people on your team soon enough, so this is an easy way to build that relationship.

Your credit is important to help you qualify for the mortgage, but it isn’t more important than the property itself.  Finding a good deal and having a good business plan will be the most important factors in the loan approval process.

However, you want to develop and keep the best credit rating you can.  The better your credit, the better the terms of your loan. (typically) Be careful about too much credit card debt; try to keep your balances around 20%-25%, much higher and it will impact your FICO.  New credit cards can also negatively impact you for a time.  If you are getting ready to submit a loan application for real estate, I would not apply for anything.  Work with what you have right now; assuming you have some credit.  If you don’t have any credit or need to improve your credit, then you could make that step 1 in your real estate investor business plan.  You should target a FICO score of 660 min. to qualify for an investor, non-owner occupied purchase; as mentioned before, the better the score the better the terms so keep in mind that just because you can qualify at a certain score it may not be in your best interests and adding an investment mortgage could knock your score down for a period subject to debt to income and other variables.

You will need the EIN to open a checking account.  And you will want your entity before the EIN so I think you should start working on those right away.  You want to have all the administrative tasks out of the way as soon as possible.   When you get your new property under contract your going to be busy with the Loan and possibly the Rehab budget… not to mention about a thousand other things.

All the Best!

Wren

@Alisha Gilliam - You want to identify all the Deal Points to determine if you can purchase the property and operate it for a profit.  

A few quick questions to ask - 

Size / Vacancy:

• How many lots/pads in the park? 
• How many lots/pads have a mobile home on them?  
• How many of the homes are occupied?  
• Do the residents own the homes or are they park owned homes? - How many of each?
• What is condition of park owned homes?  Do they have titles?
• Metro - Is the park in an MSA?  What is the population of City or MSA?

Utilities:

• Water - City, or Well?
• Sewer - City, or Septic, or Plant?
• Electric - Master meter, or individual? 
• Roads - Asphalt or Gravel?  Who maintains, park or city?
• Trash- Who pays, resident or park?  Are there small cans for each home or a large dumpster in the park?

Rent:

• Current Lot/Pad rent?
• Park owned home rent?
• Market rent? - Lots and Homes
• Market occupancy?

@Donald Torrence Will the Seller subordinate to the Lender?  If so, then maybe.  Depends on the rest of the Deal. What's the Story: How big, how old, how much, how long ...?

@Richard Bickel III - Your Agent is possibly, probably trying to guide you to the most common house in your area.  Maybe since most houses have basements, most people will want a basement.  But that doesn't mean everybody wants a basement or that if the house doesn't have a basement nobody will want it.  There's an old saying "Horses for Courses, and Courses for Horses," which means there's something for everyone and someone for everything.

If the deal makes sense, and the house will work for what you want (Fix and Flip, BRRR, or???) then try it.

@Nicholas St.Croixyou have found the best place to start, Bigger Pockets.  Read the questions and answers in the forum.  Listen to podcasts.  Attend webinars.  Go to your local Meet Ups.  As you learn more your questions will start to fine tune what you've learned which will help you gain the confidence to do your first deal... which will help you gain the confidence to do the next and so on.

All the Best!

Wren

@Javier D. the definition of an accredited investor is someone who earns a min. $200k annually for the past 2 years and expects to earn the same or more in future years.

@Eric Shadowens you've received some excellent counsel on passive investing in real estate.  I'm a little unclear if you are looking for a place to put your money to work while you do something else or if you want to become an active real estate investor?  If you are active in the property's management, you need not be accredited or even sophisticated.  You just need to be willing and able.

@Fareed H Hasan I agree with @Sam Shueh you can get started now while you wait for the LLC. On your offers include "And/ Or Assigned" and you can update the entity pre-closing if the LLC is active by then. If not, then just inform your title officer that you want to move it into your LLC at a future date.