Looking to Help Beginners ! (Investing , Financing, Managing)

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Looking to Help Beginners ! (Investing , Financing, Managing)

Account Closed
Upstate, NY · Member since 2016 · 200 posts · 277 votes

Hey all,

 I am on bigger pockets simply because I want to help beginners make that leap like I had to all on my own before I knew about bigger pockets.  A quick blurb on my experience : 

I am a serial House Hacker 

I am a Bank Manager for a large Bank 

My wife is a Real estate Agent specializing in Flips and Investment Properties

My friend and I have a total of 104 rentals in our area which are all self managed he owns the bulk of the 104 rentals

Also my father is an attorney and my mother is and has been a real estate agent my whole life.

I have lived with tenants , managed my own properties, helped grow and develop a property management team,  helped investors find deals,  helped investors get financing , and a bit more ! 

That all being said I have a bit of experience in buy and hold , financing traditional and creative , self managing, and MLS deals and using the MLS. I am still learning myself (always will be) but I feel like I can help people analyzing deals and making the leap into REI!

Please feel free to ask anything that comes to mind and I will try my best to answer all questions. 

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Pao Yang
Real Estate Professional · Oak Creek, WI · Member since 2016 · 4 posts · 9 votes
9y

Hello,

I'm new to REI, just graduated from college, and fell upon Robert Kiyosaki's books. It lead me to start watching REI webinar, and and attend seminars. Learned a great deal, and they keep saying take action. Only problem is, where do I even start?! REI is and has so many strategies and topics, where does a beginner even begin to take action? I'm currently enrolled in Rich dad's seminar 3 day beginners real estate program ( Plan to stop due to high fees for the program). I've been reading REI books, mostly general strategies. And I've been analyzing properties mostly on the MLS. I'm trying to connect with local REI clubs, and meets with local BP, as well as local REI investors/agents. All of this is a load of great information, but doesn't really have a decent structure on where someone like me with no experience even begin. Any suggestions would help.

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  • Joel S.
    Rental Property Investor · Brooklyn, NY & Jersey City NJ · Member since 2016 · 39 posts · 7 votes
    9y
    Originally posted by @Tom Chen:

    @Joel S., thank you for that insight. 

     My Pleasure... 

    PM would love to get on touch.

    0Reply
  • Cory Newton
    Randallstown, MD · Member since 2016 · 9 posts · 0 votes
    9y

    Thankyou Kuba & Joel

    0Reply
  • Account Closed
    OP
    Upstate, NY · Member since 2016 · 200 posts · 277 votes
    9y
    Originally posted by @Christopher Anello:

    Bryant Schur and everyone else thank you for this entire discussion I'm loving the vital information.

    I am currently living in Florida and searching for my first investment property which I'll be house hacking and looking to acquire a FHA loan since I do not have a lot of capital. I was wondering in your opinion what are the pros and cons to house hacking? What have you learned over the years that you wish you knew when you first started? You have done this for some years now, any important tips I should keep in mind going into my first property?

    Hey Chris ,

    I have a few pros and cons when it comes to house hacking .

    Pros :

    Low down payment like you referenced with the FHA loan.

    Lowers your monthly cost to live allowing to save more money for more properties .

    Allows you to test drive being a landlord and decide if this business is really for you .

    Cons:  

    Can be slightly annoying to live with tenants . 

    Many people buy a bad deal that won't make money when they move out and do not realize it until it is a problem down the road.

    TIP

    Run the numbers as if you are renting both units it .  This way you can make sure it cash flows properly .   You need to know your numbers because you will be moving out of the house .  Don't purchase a house because you fall in love and want to live there , purchase because it's a good cash flowing property.  Most likely you will only live at the property for a few years or less. 

    0Reply
  • Account Closed
    OP
    Upstate, NY · Member since 2016 · 200 posts · 277 votes
    9y
    Originally posted by @Adonte Lipsconb:

    Hello I'm a new investor and don't know were to start.  I will be moving from Florida to North Carolina in 6 months to a year. My question to you is should I buy a 2-4 unit in Florida or wait to get to North Carolina.  Also what do you think about wholesaleing.

     I prefer to invest locally , however many people have huge success investing in other places .  I would see what market is stronger first and also find out if Florida has any top notch property manager that you can trust while you are out of town .

    Wholesaleing is interesting to me .  My wife being a real estate agent she finds deals and put them on the mls and notifys buyers that she knows may be interested , and buyers who typically purchase similar properties .    It is very similar to wholesaling.  I see the need for wholesailing and I think it has a solid Future but I also see some issues with all these gurus getting people to wholesale.  I think it's going to be the "shiny easy way " to make a ton of money fast in real estate but at the end of the day it's a job.

    0Reply
  • Account Closed
    OP
    Upstate, NY · Member since 2016 · 200 posts · 277 votes
    9y
    Originally posted by @Gardi A.:

    Bryant Schur hi Bryant thanks for taking questions. After doing some reading a lot of people say to go commercial as the banks use the cash flow and the deal itself to qualify you and not so much your personal info as they do for 2 to 4 units how true is that?

     If the deal is over 5 units you have to go commercial .  And yes they typically look at the deal first and then the buyer . Residential is the other way around the buyer and then the deal . 

    0Reply
  • Christopher Anello
    Palm Coast, FL · Member since 2016 · 20 posts · 7 votes
    9y

    @Account Closed

    Thank you for your feedback, great advice!

    0Reply
  • Sherman Ragland
    Involved In Real Estate · Upper Marlboro, MD · Member since 2014 · 246 posts · 230 votes
    9y
    Originally posted by @Tera Carter:

    @Sherman Ragland

    Thank you for the information. I would feel more comfortable if the Attorney from the Title company gave me their preferred contract and we can add addendum's to them on the spot (for the non- MLS).

    The Board of Realtors agreement/contract.... is that the 10 page contract from the real estate company?

     Yes, generally its a standard from. In some Counties (Anne Arundel) its 10 pages, in others it might be 12 or 14.

    0Reply
  • Sherman Ragland
    Involved In Real Estate · Upper Marlboro, MD · Member since 2014 · 246 posts · 230 votes
    9y
    Originally posted by @Cory Newton:

    Do you need to have a LLC in Maryland to start flipping houses

    No, you do not need an LLC, BUT...

    1) It is easier to use LLC's to assign deals that have clauses that prevent you from doing assignments without "Mutual agreement", such as Board of Realtor contracts; and,

    2) LLC's are a much more common way to take title in MD, vs. a trust, which is the second most common way to take title as an investors.

    For some reason, title companies are much more comfortable with LLC's in Maryland. In other states, like Illinois and Texas, it seems to be the opposite.

    0Reply
  • Tera Carter
    Radiologic Technologist and Real Estate Investor · Severn, MD · Member since 2016 · 57 posts · 31 votes
    9y

    @Sherman Ragland

    What about forming a Corporation?  Is that good or bad

    0Reply
  • Sherman Ragland
    Involved In Real Estate · Upper Marlboro, MD · Member since 2014 · 246 posts · 230 votes
    9y

    You should consider using an entity, and not acting as a sole proprietor.

    Since I'm not an attorney, I can not tell you what to do, but I can tell you what I do.

    I have an S-Corp that is my primary business vehicle going back to 1989.

    If I were starting over today, I'd use an LLC, and have created several LLC's as "Operating Companies", where I and another person are the Members, with me, or my S-Corp serving as the Managing Member (Decision Maker).

    For each deal, I use an LLC to hold title about 90% of the time. I have also used trusts, and rarely ever hold title as an individual.

    1Reply
  • Account Closed
    OP
    Upstate, NY · Member since 2016 · 200 posts · 277 votes
    9y
    Originally posted by @Craig Moore:
    Originally posted by @Account Closed:

    Hey all,

     I am on bigger pockets simply because I want to help beginners make that leap like I had to all on my own before I knew about bigger pockets.  A quick blurb on my experience : 

    I am a serial House Hacker 

    I am a Bank Manager for a large Bank 

    My wife is a Real estate Agent specializing in Flips and Investment Properties

    My friend and I have a total of 104 rentals in our area which are all self managed he owns the bulk of the 104 rentals

    Also my father is an attorney and my mother is and has been a real estate agent my whole life.

    I have lived with tenants , managed my own properties, helped grow and develop a property management team,  helped investors find deals,  helped investors get financing , and a bit more ! 

    That all being said I have a bit of experience in buy and hold , financing traditional and creative , self managing, and MLS deals and using the MLS. I am still learning myself (always will be) but I feel like I can help people analyzing deals and making the leap into REI!

    Please feel free to ask anything that comes to mind and I will try my best to answer all questions. 

     What's your first move if you're a recent college graduate with $20k saved? What was your plan with house hacking?

    Originally I did not have a plan I just wanted to live for free and test out the whole landlord thing. What ended up happening was I saw the potential and realized I had a passion for REI I started looking for another rental that I could move into so that my first house could cash flow properly. I then moved into a new rental and did the same thing ! Than once I was conformable enough and had accumulated more units I purchased my first SFR for myself.

    1Reply
  • Account Closed
    OP
    Upstate, NY · Member since 2016 · 200 posts · 277 votes
    9y
    Originally posted by @Joel Poualeu:

    Hi @Account Closed. Thank you for your help. I am a beginner and is currently going through podcasts and all resources I can find. I am looking into buying and renting.  I do have a full time job  so am considering having a property manager assist me at least for the first year(s). After reading some forum, I am considering house hacking on a MFH, but still having it partially manager by a property manager while i get my feet wet. Is this reasonable based on your experience? Or would you suggest some other method for a first timer?

     I personally would not recommend a property manager for a first home that you will live in .  The amount of experience you would gain at such a small scale would be so valuable.  Honestly just haveing 1-2 tenants should not be to difficult even with a busy schedule .  I also do not think there are to many MFHs that could come close to cashflowing when you live in a unit and you are paying a property manager . Now i could be wrong about the cashflow part of you find a great deal but the main part is the experience you can gain if you do it yourself .

    1Reply
  • Account Closed
    OP
    Upstate, NY · Member since 2016 · 200 posts · 277 votes
    9y
    Originally posted by @Vincent Ramsey:

    I'm a beginner and considering my first investment property. All I read online is that cash flow is king (as opposed to equity) but I wanted to get your opinion on this. I understand why cash flow is king for the vast majority of people. However, if someone is wealthy and not looking for cash flow (because it would be a drop in the bucket), but rather to grow equity and probably hold onto a property for >> 30 years with plans to potentially hand it off to a child, is it OK then to accept a negative cash flow? 

    It seems to me that paying a couple hundred dollars a month to build equity in an expensive property in the very long-term still makes sense despite a small cost to me per month. If I were to buy the property myself it would obviously cost much more. Thanks for your input on this!

    Never do a deal that negative cash flows .  Ever  

    1Reply
  • Account Closed
    OP
    Upstate, NY · Member since 2016 · 200 posts · 277 votes
    9y

    @Vincent Ramsey to elaborate a bit more . You can't bet on equity that's how people get ruined in REI . There is too many good deals out there that do cashflow . Just don't do it !

    1Reply
  • Jonathan Heltz
    Flipper · Baton Rouge, LA · Member since 2017 · 4 posts · 2 votes
    9y
    Hi there all... I'm new to the whole REI world but have been researching, reading and looking at potential houses to flip left and right over the past 3 weeks. No deal yet but we came close this weekend. Turns out the property was a short sale and the bank had been evaluating offers since October since they've been backlogged with all of the foreclosures and pre-foreclosures in this area. We live in Baton Rouge, LA and an immense number of homes flooded back in August. We're in a unique position in that my wife is a licensed Interior Designer and I'm a licensed Architect in the state. We have tons of contractor contracts and material supplier contacts but honestly the biggest problem we're having right now is finding a good Real Estate Agent. The ones I've dealt with don't seem to understand what real estate investors are looking for in a property. What's worse the "comps" in the area are all over the place - most are in a gutted condition. The amount of rehabbed properties to compare to for an ARV are very limited. My question is, what can I do to better explain to the agents what I'm looking for? I lay out the areas and price range and what kind of properties are ideal, but they still rarely bring me any prospects. I know I'm just starting out but I've also explained that I'd like to work with them long-term to buy and sell these properties. Thanks for all of your advice. I really enjoy this site and all of the podcasts.
    1Reply
  • Pao Yang
    Real Estate Professional · Oak Creek, WI · Member since 2016 · 4 posts · 9 votes
    9y
    0Reply
  • Michael Anderson
    Real Estate Professional · Baton Rouge, LA · Member since 2016 · 109 posts · 30 votes
    9y

    @Sherman Ragland, spot on that's exactly the way we operate, great envesting or aka investing, keep posting but most of all keep sharing, knowledge is power

    1Reply
  • Kuba F.Pro Member
    Real Estate Investor · Los Angeles, CA · Member since 2013 · 2k+ posts · 694 votes
    9y
    Originally posted by @Jonathan Heltz:

    Hi there all... I'm new to the whole REI world but have been researching, reading and looking at potential houses to flip left and right over the past 3 weeks. No deal yet but we came close this weekend. Turns out the property was a short sale and the bank had been evaluating offers since October since they've been backlogged with all of the foreclosures and pre-foreclosures in this area. We live in Baton Rouge, LA and an immense number of homes flooded back in August.

    We're in a unique position in that my wife is a licensed Interior Designer and I'm a licensed Architect in the state. We have tons of contractor contracts and material supplier contacts but honestly the biggest problem we're having right now is finding a good Real Estate Agent. The ones I've dealt with don't seem to understand what real estate investors are looking for in a property. What's worse the "comps" in the area are all over the place - most are in a gutted condition. The amount of rehabbed properties to compare to for an ARV are very limited.

    My question is, what can I do to better explain to the agents what I'm looking for? I lay out the areas and price range and what kind of properties are ideal, but they still rarely bring me any prospects. I know I'm just starting out but I've also explained that I'd like to work with them long-term to buy and sell these properties.

    Thanks for all of your advice. I really enjoy this site and all of the podcasts.

    It could be that there are no prospects, and that your expectation of how much actual deal worthy inventory there is on the MLS needs to be reset. In general you should expect deals on the MLS to be needles in a haystack. By the time it hits the MLS it has been picked over by investors, at which point you should expect to pay near retail.

    On the other hand, I agree, many agents don't understand investor criteria.  You could find a more knowledgable agent by reaching out to one representing a newly rehabbed property in your target area, or go to an investors meetup and you should be able to find quite a few there.

    1Reply
  • Sherman Ragland
    Involved In Real Estate · Upper Marlboro, MD · Member since 2014 · 246 posts · 230 votes
    9y
    Originally posted by @Kuba F.:
    Originally posted by @Jonathan Heltz:

    Hi there all... I'm new to the whole REI world but have been researching, reading and looking at potential houses to flip left and right over the past 3 weeks. No deal yet but we came close this weekend. Turns out the property was a short sale and the bank had been evaluating offers since October since they've been backlogged with all of the foreclosures and pre-foreclosures in this area. We live in Baton Rouge, LA and an immense number of homes flooded back in August.

    We're in a unique position in that my wife is a licensed Interior Designer and I'm a licensed Architect in the state. We have tons of contractor contracts and material supplier contacts but honestly the biggest problem we're having right now is finding a good Real Estate Agent. The ones I've dealt with don't seem to understand what real estate investors are looking for in a property. What's worse the "comps" in the area are all over the place - most are in a gutted condition. The amount of rehabbed properties to compare to for an ARV are very limited.

    My question is, what can I do to better explain to the agents what I'm looking for? I lay out the areas and price range and what kind of properties are ideal, but they still rarely bring me any prospects. I know I'm just starting out but I've also explained that I'd like to work with them long-term to buy and sell these properties.

    Thanks for all of your advice. I really enjoy this site and all of the podcasts.

    It could be that there are no prospects, and that your expectation of how much actual deal worthy inventory there is on the MLS needs to be reset. In general you should expect deals on the MLS to be needles in a haystack. By the time it hits the MLS it has been picked over by investors, at which point you should expect to pay near retail.

    On the other hand, I agree, many agents don't understand investor criteria.  You could find a more knowledgable agent by reaching out to one representing a newly rehabbed property in your target area, or go to an investors meetup and you should be able to find quite a few there.

     It's hard working with agents who don't get investors, which is about 90+%.  Even though agents have to sit in hours for classes before they get their license (60 hours in Maryland, 120 in some other states), they get zero training on how to work with investors.  It's the agents that actually seek out training to work with investors, or do investing themselves that (ultimately) get it.  

    That being said, 80% of all single family house deals are going to be listed in the MLS (Multiple Listing Service). Therefore, the key is to gain access to the MLS. In every part of the country this is a little different, because the MLS is not a national database, its a chain of local data bases, controlled by the local Boards of Realtors(R).

    In our region, we are allowed to give (direct) access to our clients. Since I am a broker, I simply make this access available to all the members of our REIA. If you belong to a REIA that has real estate agents or brokers in the leadership, ask about this option. If not, see if your agent will get you some form of limited access. Access where you can see it, but not actually change anything in the database. Again, how you do this varies from region to region, but it can be done. I know there are some third parties who sell access to the MLS as a service, but normally these types of arrangements are both expensive, and the service itself is not as reliable as the real MLS which is restricted to Brokers/Agents. Don't bother with Zillow, etc. They are pulling data from the public records (and putting in properties that are not actually on the market), therefore you'll waste a lot of time searching for stuff that's not for sale.

    At the end of the day, you want to be in a place where all your agent is really doing is interfacing with the LISTING (Seller's) AGENT, not necessarily feeding you MLS listings.

    0Reply
  • Tannon Napper
    Hillsborough, NC · Member since 2014 · 39 posts · 3 votes
    9y

    Hi Bryant, thank you so much for taking time out of your busy schedule & helping us rookies. I will definitely be picking your brain in the very near future.  Take Care. 

    0Reply
  • Sebastian Taylor
    Baltimore, MD · Member since 2013 · 85 posts · 28 votes
    9y
    Originally posted by @Jonathan Heltz:

    Hi there all...

    My question is, what can I do to better explain to the agents what I'm looking for? I lay out the areas and price range and what kind of properties are ideal, but they still rarely bring me any prospects. I know I'm just starting out but I've also explained that I'd like to work with them long-term to buy and sell these properties.

     You don't have to. Everything is online.  Go online and search for properties with your criteria. When you have found one, e-mail listing agent and ask to submit your offer. If they won't, they will at least refer you to different agent. Do not sign any exclusive agreements and ask for comps when they agree to submit your offer.

    Sooner or later you'll find who you want to work with. Agents look for clients not other way around.

    1Reply
  • Gloria Dulan-Wilson
    Philadelphia, PA · Member since 2014 · 28 posts · 5 votes
    9y

    Hi  Bryant - I hope you can give me some advice as to how to deal with realtors who want you to sign a buyer's broker contract agreement - I am in the Philadelphia Area - originally from Down State NY (Brooklyn) - just starting out and am interested in Buy & Hold properties - Duplex, Triplex, and Quadplexes.

    I don't have the finances up front so am looking to do private money or perhaps even hard money to start out. The agent I have been dealing with is not only asking me to sign the contract, but to prove financials - which I can't until I obtain a Private Money Lender or a Hard money lender - so - what's the best way to handle this?  And which comes first getting the Private money lender and then finding the properties, or getting the properties and then finding the lenders.  I have headed up non-profit organizations that purchased and renovated properties for low/mod income families in Brooklyn and New Jersey - most of the funds were through the State or Feds - so I do nee some hand holding when it comes to getting my own financing - appreciate your feedback and your wisdom.  

    0Reply
  • Pierre Toussaint
    Atlanta, GA · Member since 2016 · 20 posts · 4 votes
    9y

    Wow, this forum has blown up.  Bryan's probably not able to get to a lot of questions. @Joseph Scott, I'm new too, but responding to your question 6 days ago, have you checked out local REI clubs? II have, and it's awesome!! You'll hear a lot about creative financing and more importantly, meet a lot of people who are using it. Could be helpful to get some one on one direction initially.

    2Reply
  • John Spina jr
    Contractor · Staten Island, NY · Member since 2016 · 147 posts · 38 votes
    9y

    Hello Bryant, I have a question. I have a lender who is willing to finance my first deal. I live in Staten Island, NY. Im currently looking in Easton, PA. Being that I'm interested in rental properties, this area has very good prices considering what I'm qualified for. I just want to make sure that i have the procedure right to get my lender back his money with interest. First he would fund the down payment plus repair cost. Once the house is bought, a tenant is moved in and making payments. Usually after 6 months then I would be able to get the property appraised. This is when my lender would receive his initial investment back and i would also be able to pay him in interest as well. After this is done I would assume the new mortgage and I would own the property. Is this something that I could do? I guess What I'm asking is this something that is normally done between a lender and someone who's looking to use other peoples money?   

    0Reply
  • Jonathan Heltz
    Flipper · Baton Rouge, LA · Member since 2017 · 4 posts · 2 votes
    9y

    @Sherman Ragland Thanks for the advice. I was able to connect with an acquaintance of ours who is an agent. It turns out that her broker is very familiar with REI and is very in tune with the needs of investors. She's going to get him to recommend some potential properties. I'm very hopefully this will be a mutually beneficial relationship. My wife is going to start preparing for the RE license exam soon. Hopefully by our next project she'll be able to gain us earlier access to the MLS and list the property on the back side. I haven't signed anything exclusive with any agent at this point. I had to cut the other one loose after a debacle with a property this weekend.

    1Reply
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