Property #1Purchase Price $149,500 (Nov 2004)PITI - $1725 (includes $350 for HELOC, $250 for escrow shortage pymt (12months left), $125 Association Dues)Rent Received: $1195Net - -$530 (ouchhhh)And this does not even take operating expenses into acct (double ouuchhhh)...and a very high vacancy rate in Property #1...Positives: This areas has NOT seen a decrease in prices at all.

I'm asking if anyone here makes loans that are Deeds of Trust, in other words they are written up that way...as Deeds of Trust....recorded at the county as such.In my mind when you are loaning private money in small amounts....the only way you can be protected from being in the second position (and ultimately thrown out if foreclosure occurs) to the 1st mortgage holder is to write it up as a Deed of Trust.

Very well said, Jason, You are well on your way with that positive attitude.

How could there ever be a positive cash flow on rentals?

The rental help cover my mortgage ($150 surplus) and I use my salary to paid off all my bills and personal loan from my brother.

In Australia, the lenders take the position that it's not possible to buy a genuine bargain, and the valuation for mortgage purposes is always taken to be "the lesser of market value and purchase price", meaning that this would be impossible, and on a $70K purchase one could only borrow $49K.But lots of things are possible in your market that aren't in ours - you're generally much less regulated - so I thought this was a question worth asking!

San Jose is a different beast for investing, and I feel my time will be better focused in easier areas that will generate positive cash flow.So it would be great to hear general stories of how you built your team, but the icing on the cake for me will be to hear about people who started with similar goals.Also, I realize each person on the team is important, but who do you consider most critical in getting your deals done?

I don't believe that the end buyer has a ton of cash to move into my position.

While you didn't provide nearly enough information, it's unclear that you can even afford house #1 so getting into more property sounds like it could be a recipe for disaster.More simply put, if you're not in good enough financial shape to bring an extra $15k to the table to sell house #1 *and* put enough down on this newer house that you want to buy, then you're not in position to buy this newer house period - let alone own 2 houses.

One the other hand, you can also expect that some people understand that you may be in a position to help and will welcome your participation.This approach works...