My Beginning
Hello, BP world! I am starting this blog to hopefully help those starting out. My plan is to start with no money, no real contacts, a good amount of time, and a decent education. I am looking to invest in buy and hold real estate, with a real interest in multi-family properties. To begin, I would like to talk about the education I have gotten, and the assets I can bring to the deal. Let's look at my education:
I have been looking at doing real estate investing for about 10 years. I have analyzed, sought out, looked at, and dreamed about owning more than 100 properties. However, up until now, I have not bought any properties above and beyond the houses I bought for personal use. There have been three of those so far, two of which I still own. I live in one, and rent out the other. The one I rent out is due to necessity, because I cannot sell it. It is underwater. I lost a bit of value during the crash, and have yet to recover. Despite that, I have managed to pay the mortgage on-time for over 7 years now. When I make a commitment to pay, I do everything I can to keep it. It probably would have cost me less to just walk away, or request a short sale.
I have been on BP for just over a month, reading and seeing what advice is out there. I have taken webinars, read tons of forum posts, blog posts, and listened to all of the podcasts. I read the Beginner's Guide, and BP is my go-to when I have any questions about real estate.
Books I have read (Real Estate and Investing):
Rich Dad, Poor Dad - Robert Kiyosaki (where I got my thoughts about investing from)
About 4 other Rich Dad books - Robert Kiyosaki
The Millionaire Next Door - Thomas J Stanley and William D Danko
The Book on Investing in Real Estate with No and Low Money Down - Brandon Turner
The Four Hour Work Week - Tim Ferris
The Beginner's Guide to Investing in Real Estate - BiggerPockets
By the way, Brandon Turner is who finally got me off my rump and out there to start making deals. In his webinar on how to invest in real estate with no money down, he said that those who do not start never gain ground, so get out there and start making things happen. For whatever reason, it worked. I am out there now.
Books I am Reading:
The Book On Estimating Rehab Costs - J. Scott
Books I have yet to read:
The One Thing - Gary Keller
Landlording on Autopilot - Mike Butler
Buy-ology - Martin Lindstrom
We Can Do THAT? - Peter Shankmann
Investing in Duplexes, Triplexes, and Quads: The Fastest and Safest Way to Real Estate Wealth - Larry B. Loftis
The Unofficial Guide to Real Estate Investing - Spencer Strauss
Predictably Irrational - Dan Ariely
And many, many more...
Now that you know my education and book list, I am going to talk about what I can bring to the table. This is very important, as I have a ton of things going for me. I will start with the fact that I am dedicated and honest. I take commitments seriously and will not back out once one is made. The only time I will not deliver is if I have exhausted all options and cannot. I do due diligence, and I under-promise to try to ensure that does not happen.
The second thing I have is time. Lots and lots of time. I am disabled, and cannot work in a traditional job setting. Therefore, I am able to work on things whenever needed. I have been using that time to read, look for deals, and learn as much as possible. However, I would rather spend it doing deals and working on building my real estate portfolio.
The third is my education. I have read quite a few books, blog posts, forums, and otherwise gotten every bit of education I could find that was free (and even some that weren't). I have literally spent over a thousand hours on education and will continue to spend more.
Things I lack: Money and Experience. Those are two things I hope to acquire by doing deals. This will allow me to do further deals. That is what I am currently working to correct.
So, I will share with you my first deal that I am currently working on, which you can check out here:
http://www.biggerpockets.com/forums/88/topics/1537...
This is where I am now. I am starting with very little in the arena of cash reserves and experience. I just need to find the right deal, figure out how to make it happen, and then execute it. I am welcoming any advice, assistance, or anything else others have to offer.
Comments (5)
Thank you Frankie! I've got another blog post coming today, showing a pretty interesting update, so stay tuned for that!
Trevis Kelley, over 9 years ago
Thank you for sharing your story! I hope you find the partner you are looking for! There are also other options out there, one of which was mentioned by JJ. The one thing that always sticks out to me on the forums is that if you find a smoking deal, the money will find you! Good luck!
Frankie Woods, over 9 years ago
Absolutely, hard money loans aren’t ideal for every situation, and it’s up to you to decide the best way to pursue your career as a real estate investor.
The benefits I outlined are not meant to persuade you or a potential borrower to work with a hard money lender for every investment deal. Rather, they are intended to help a borrower determine the best possible lending solution for a specific investment opportunity, all of which should be carefully considered. It's important to look at all the options to determine whether or not a hard money loan is a good solution for your particular investment. Every deal is different.
There are multiple exit strategies to consider with hard money loans. Fix and flip or refinance and rent, just to name a few. There are many benefits to using a hard money loan, but each deal is different and hard money is not always the best option. It sounds like you are doing a good job doing your research and that is crucial, not just with determining whether or not to use hard money but also determining which hard money lender to use (or which traditional financing source).
If you do decide to explore the option of hard money please feel free to contact me personally. I'd be happy to answer any of your questions. Kansas City is a great market for investors.
You nailed it when you said:
"I am just trying to navigate all the ins and outs of this business. The downside is there is no one path for anyone and there is so much to learn. The upside is there is no one path for anyone and there is so much information out there."
Again, good luck. It sounds like you are on the right track and are doing a good job taking your time to get to know all the ins and outs and options.
Account Closed, over 9 years ago
JJ,
First of all, thank you for reading my blog! I am definitely excited to have people reading!
I have thought about doing that, but from what I have read about hard money lenders, they want the money back in 2 years or less. Given the size of the property and the fact that I am a newbie, a hard money lender may not be the smartest move. However, it could work out very well as long as equity can be built as quickly as I would hope. I would need a hard money lender to go 5 years on the loan before I would consider it, and the rate would not be what they would like to even achieve that. $64,000 is a good chunk of change for someone in my situation, and I could not turn it around as quickly as some might like (what I would need to have equity in the property to refi into a bank loan and pay off the hard money lender).
"Good hard money lenders want the same thing as their borrowers – a successful and profitable investment experience."
This is true. They want one for themselves. I am not saying that they don't want their borrowers to be successful, but just that there could come a time when their interests do not align with the borrowers (mine). Especially when it comes to repayment schedules and what could happen if for some reason I cannot meet them. Banks are the same way, but they generally loan for longer than the traditional hard money lender which means a lower payment and an easier time making repayment happen.
I am not saying that I know everything on the subject. I definitely have a lot to learn. I will be heading to your site to get that ebook. I can never have too much to read. I am also not saying that hard money lenders are bad. They can definitely get a deal moving that may be stuck (which can be good for everyone). I am just not sure I am ready to jump into that on this deal. I am scouting places in KCMO right now (where I am told the cashflow is better). Haven't seen it yet, but there are definitely more properties to choose from, so maybe one or two will rise to the top.
Anyway, thank you again for the information and insight. I am just trying to navigate all the ins and outs of this business. The downside is there is no one path for anyone and there is so much to learn. The upside is there is no one path for anyone and there is so much information out there. What a crazy business!
Trevis Kelley, over 9 years ago
Have you considered hard money loans as a possible source of funding? A hard money loan generally requires less cash out-of-pocket and hard money lenders can offer benefits that many conventional and traditional lenders cannot.
Hard money loans typically have fewer borrower qualifications and take less time to close than a traditional loan. Loan amounts often include rehab financing to complete an approved scope of work being done on the subject property. It should be noted, however, that while hard money lenders generally put more emphasis on the subject property and loan-to-value ratio rather than the prospective borrower’s credit, borrowers still must apply for, qualify for and agree to the terms of the hard money loan.
Here are some of the benefits of using a hard money loan when investing in real estate:
Most Importantly…
Hope this helps! Let me know if you have any questions. If you are looking for additional reading material, specific to hard money, I have authored an ebook available for free on my website.
Most importantly it is essential to understand all the facts, learn the process, evaluate the potential benefits and know the “how-to’s and don’t-do’s”. Following those steps, whether you use hard money or any other type of funding, it will make your borrowing experience infinitely easier. It sounds like you are on the right track and you definitely do your homework. Good luck!
Account Closed, over 9 years ago