All Forum Posts by: Leonid Sapronov

Sean Stewart I'm in the same boat - nothing to offer and hungry to leech off other more-experienced people. :-)

In all seriousness though, given how much I've learned in the past three months, in another few I WILL have something to offer. The learning curve is steep, but it's cool to realize that you now understand things you had not idea about before.

@Tanya S. Valid point. A lot of the groups do try to sell something or charge you for membership. I'm all for a laid back and friendly meetup.

Will K, Jason Cohen - guys it's great that you are taking the initiative and creating the meetup group and, please, don't take my comment as discouragement, but the first thing I did when I started reading up on REI is join 7 meet up groups in the DC area. And there are a bunch more out there. Do we need another group and if so, how will it differentiate itself from the existing ones?

BTW, I haven't made it out any meetup get-togethers yet, mostly due to my crazy work schedule. Does anyone have any experience (hopefully positive) with any of the local groups?

Great to see more people responding!

Brandon, thanks for the thorough reply!

I realized my mistake, which was an erroneous definition of equity that I had in my head. All this time I was under the impression that home equity meant the portion of mortgage already paid off, whereas in reality it's tied to the fair market value of a home. Now everything clicks into place :-)

Ok, now that we've cleared that hurdle, I'm gonna guess that investors avoid sellers with equity because those sellers would be reluctant to give up that equity at a discount? I.e., if a seller owns the property outright, he would, very naturally, want to sell it as close to fair market value as possible and, thus, unwilling to take a loss unless they were motivated?

BTW, awesome podcasts.

I've been reading this forum continuously for the past two months and am amazed at the amount of information here. Thank you all for contributing and sharing!

One of the things that I'm still trying to wrap my head around is the role of equity when buying a property. Specifically, I hear of investors avoiding sellers with equity or the opposite - looking for sellers with equity. This subject seems to come up more when talking about motivated sellers and short sales. Anyways - why is equity important when analyzing a deal? How does it affect the investor's thinking? Is seller having equity in his/her home good or bad?

This question probably sounds extremely basic and silly, but I'm still at that stage - lots of silly questions.

BTW, Ned, thanks a lot for your blog/site. Been reading through it slowly. So much information to absorb...

Another DMV'er checking in. I currently live in McLean/Tysons Corner, VA. Before that, lived in Gaithersburg, MD for a long time. Awesome to see fellow DMV'ers - since I started looking into investing a couple of months ago, I've been trying to find people to discuss the local RE market. Met with two agents (one MD, one VA), both told me there's an extreme shortage of supply and that investors are buying up a lot of houses. Sellers' market. Confirmed that for myself by continuously scrutinizing listings on RedFin and Zillow - very few properties in Montomery and Fairfax counties. The occational deal that comes up gets snatched up in the blink of an eye. This got me looking at Prince George's, Howard, and Anne Arundel. Also pondering Baltimore, but a little afraid to get into that market :-)

I would love to meet/partner with people to discuss strategies and work on a project. After lots of reading and thinking, I've decided that, with a full time job and not a whole lot of free time, I want to build up a buy-and-hold porfolio, so I'm not looking to flip. However, at this point, I'm interested in learning as much as possible and doing a few flips seems like good education. Perhaps there is a hybrid flipping/rental strategy that would make sense. Stuff like that would be great to discuss.

My immediate goals:
1) Buy first rental prop this year
2) Learn the DMV market, especially Baltimore, Laurel, Frederick. I know there is a lot of potential in Baltimore because I receive emails from wholesalers every day, but like Ned said, it's VITAL to know the neighborhoods
3) Join a local REI meetup (actually, I've already done that, but have yet to make it out to any meetings)

I'd be happy to share my experiences and what I've learned so far looking at properties and visiting different neighborhoods. Adding you guys to colleague list.

Best of luck to everyone!

Thanks a for all the replies, a lot of good points and things I hadn't thought about. I suspected it could get messy, which is why I thought I'd float the idea here first.

Dyna, reason I'd want the mortgage in friend's name is because she could qualify for FHA with 3.5% down, whereas I would have to put 20% as an investor.

Lynn, thanks for the tip, I will definitely read the loan guidelines.

First of all, let me say that I'm just starting out in this investment game, so some of my ideas may be a little "out there" - I'm just trying to be creative. :-)

A little background: my goal is to purchase my first rental property (most likely SFM) this year and I'm actively studying the market, as well as looking into various financing options. Now, coming up with 20% for a conventional mortgage is a little tough, so I'm focusing on relatively cheap stuff (I know there are other options, but for now I'm trying to evaluate how far I can get with conventional).

While talking to a friend, I had an "aha" moment - and please tell me if this is stupid/illegal. She (the friend) wants to find a new place to rent. I am looking for investment property to buy in the same area. Assuming I can get her onboard, is it possible to have her take out a conventional mortgage (say, a 3.5% FHA loan) fir a primary residence, buy the house that we agree on and live there as a tenant, while I cover all out-of-pocket expenses (downpayment, closing costs, etc.)? The monthly expenses (PITI) would be her responsibility, but we'd make sure to find a house where those payments would be less than what she'd pay if she were to rent. Ideally, I'd like for the deed to eventually be in my name. Is a complex transaction like this possible? What types of contracts/agreements would have to be signed by both sides?

Basically, I'm trying to create a win-win situation, where I can buy a house with little money down and have a trusted tenant, while my friend saves a little bit on the rent. Of course, I want to do this legally! Any advice greatly appreciated.

-Lenny

Awesome, thanks for the info!

Ryan, what is your source for neighborhood stats? I've been trying to find one and haven't had much luck. Thanks.

Nice spreadsheet. Once you start playing with numbers, they can be eye opening. For example, I included a net worth table out to 30 years in mine and it's entertaining to just plug in different numbers.