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

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

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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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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Kuba F.Pro Member
Real Estate Investor · Los Angeles, CA · Member since 2013 · 2k+ posts · 694 votes
9y
@Justin Charpentier the right market to flip in is one where you can find deals that you can afford. The biggest advice is that you should start small, and that cheap does not mean easy. Your first flip is going to take twice as long and cost twice as much than you think.
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OP
Upstate, NY · Member since 2016 · 200 posts · 277 votes
9y
@Kevin Ha I would recommend looking into a multiunit that you can move into. This well help you live for free or cheap that alone will help you save money for your next deal.
Also when you are moving into a property you can get into a property with very very little money down. If you do an FHA property you can out as low as 3% down and also get a credit of 6% to help with closing costs ! its a great program and a great way to start cheap !
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OP
Upstate, NY · Member since 2016 · 200 posts · 277 votes
9y
Originally posted by @Binyomin K.:

Bryant Schur I'm looking to purchase off market multi family properties in south Florida. I have been having a hard time finding these types of deals
Join your local REIA and see who is exiting the game soon or if someone is motivated to sell any properties . I found my off market deals through connections and a bit of luck. You more than likely will have market heavy to find these deals consistently or get the deals fed to you by a local wholesaler .
Good luck !
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Joe Glennon
Scituate, MA · Member since 2016 · 5 posts · 1 vote
9y
Hello all,
New to BP and just starting to search for my first 3-4 unit multi family. Hoping to get one that's within 20-30 mins from home. I'm 25 miles from Boston on South Shore and wow is the MF market competitive. Also high price region of course. And the inventories for Multis are low in the 3 towns I want to focus on. I have an agent and we're looking at first property in a couple of days. Trying not to be discouraged by the low inventory/high competition. Might end up identifying properties that aren't for sale but look good to me and sending letters. As Brandon mentioned in yesterday's podcast, many landlords aren't real happy in the experience so maybe I can hook one on who wants to sell.
If anybody has any thoughts or comments, hit me up!
Thanks,
Joe
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Justin Charpentier
Poughkeepsie, NY · Member since 2017 · 32 posts · 4 votes
9y
@Kuba F. why do you think the first flip will cost twice as much as I think?
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OP
Upstate, NY · Member since 2016 · 200 posts · 277 votes
9y
@Pierre Toussaint I LOVE the amount of detail and care you have put into this ! Overall you can see that you have done your research. The only thing I would say (& hopefully I am wrong) is that most of the time you purchase something that only needs 3-4 K in work , you will not get a big enough bump in equity to pull and equity line out on that property. most traditional lender will lend between 75-80% of what they believe the property is worth. I am not saying its impossible because if you get a good enough deal its very possible its just not as common as people think !
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OP
Upstate, NY · Member since 2016 · 200 posts · 277 votes
9y
Originally posted by @Joe Glennon:

Hello all,
New to BP and just starting to search for my first 3-4 unit multi family. Hoping to get one that's within 20-30 mins from home. I'm 25 miles from Boston on South Shore and wow is the MF market competitive. Also high price region of course. And the inventories for Multis are low in the 3 towns I want to focus on. I have an agent and we're looking at first property in a couple of days. Trying not to be discouraged by the low inventory/high competition. Might end up identifying properties that aren't for sale but look good to me and sending letters. As Brandon mentioned in yesterday's podcast, many landlords aren't real happy in the experience so maybe I can hook one on who wants to sell.
If anybody has any thoughts or comments, hit me up!
Thanks,
Joe
Maybe look into markets on the outskirts of this area to see if the prices are better. I do not invest in markets that have prices themselves out of solid cashflow!
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OP
Upstate, NY · Member since 2016 · 200 posts · 277 votes
9y
@Account Closed
Hey just make sure you are being brutally honest with your numbers. Its easy to get excited and cut %s on cap ex and vacancy rates to make the deal look better but the truth always prevails! I have learned this the hard way.
Obviously you may be doing it right already but just a quick tip
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Kuba F.Pro Member
Real Estate Investor · Los Angeles, CA · Member since 2013 · 2k+ posts · 694 votes
9y
@Justin Charpentier it's learned skill that involves knowledge, proper planning, scheduling, and project management ability. In the first one you just won't know some things, like to purchase cabinets way in advance, or how to schedule your subs, or to know when you're being taken for a ride.
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OP
Upstate, NY · Member since 2016 · 200 posts · 277 votes
9y
Originally posted by @Matthew Sadowski:

@Account Closed, I'm looking at getting into my first deal for a quadriplex @ 220k. After analyzing the deal it looks like my project is going to cost about 55k including the 20% down payment, closing costs, and renovation budget. Given this, what are the top ways that I can recoup the money paid into the project so I can continue rolling onto other projects?
The ones that come to mind are
1.) FHA loan for low doawn payment and house hacking
2.) Refinancing - I don't think the value will be increased that much in 1 year though
3.) Seller financing?
Thanks for your time.
so !
1. Refinancing may be an option after doing major work in the realm of 55K but I do not like to rely on this as an exit strategy. its more of a bonus in my eyes!
2. Seller Financing would definitely be something to have your agent ask if the owner is willing.
3. The FHA 203K loan may be your best bet. This loan would allow you to buy the house with little down and actually finance the 55K of repairs into the purchase price. I would speak to an MLO at a local bank about if the property qualifies etc!
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Justin Charpentier
Poughkeepsie, NY · Member since 2017 · 32 posts · 4 votes
9y
I'm a general contractor, this is the area that I'm most confident with. I have extensive experience estimating and managing projects. What I'm getting hung up on is finding the inventory to flip. I was with a realtor all day today looking at properties in several markets and I came away with nothing. I'm wondering how long I'll beat this to find a good property. I agree with starting small and those are the types of properties I've been looking at.
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Justin Charpentier
Poughkeepsie, NY · Member since 2017 · 32 posts · 4 votes
9y
@Kuba F. ^^^^
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OP
Upstate, NY · Member since 2016 · 200 posts · 277 votes
9y
Originally posted by @Kaley Jones:

@Account Closed Thanks for the willingness to help... I am SO very new to REI! This is my first post/reply. What do you mean by "House Hacker?" Also... I live in rural east Texas, where there is a steady real estate market. We have about 100K in cash currently and can't decide what we should do. Do we try to flip 2 or 3 houses, or try to buy a rental property? My husband is a contractor, and we would self-manage any properties we acquire for renting. Do you have any advice as to where to start to get into this business??
well first off on being way ahead of the game by having some cash to start ! that always good !
House hacking is when you move into a multifamily and get the benefits of primary residence lending (low down payment , lower rates , fixed rates !) I have house hacked a couple properties living in each a year or two and I am just now at age 27 buying my first house for myself ! lol
As far as what to invest it really depends on what you are looking to do. for me I want monthly cashflow so I like buy and hold investments because I get cash every month flowing into my accounts and I own the asset they live in. Flipping typically (not always) a bit more job like causing you to have to be on the property more but you can make a ton of money quick . both have tax advantages and disadvantages . That being said some flippers are super passive and have great systems in place .
Its hard to say what you should do , you should do what you enjoy more. My advice would be listen to the BP podcast and see what types of investors peak your interest and what podcasts are more exciting and interesting for you. whichever type of investing that is I would pursue that.
at the end of the day you need to love what you are investing in !
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Kuba F.Pro Member
Real Estate Investor · Los Angeles, CA · Member since 2013 · 2k+ posts · 694 votes
9y
@Justin Charpentier that's awesome, you're way ahead then. Inventory is definitely the hardest part. In many markets you simply won't find any deals on the MLS so you have to either market for deals yourself, or work with wholesalers.
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OP
Upstate, NY · Member since 2016 · 200 posts · 277 votes
9y
@Kuba F. Thanks for helping with some questions ! I really appreciate it !
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Upstate, NY · Member since 2016 · 200 posts · 277 votes
9y
Originally posted by @Delmas Edwards:

Hey Bryant Schur! I just purchased a home FHA and in June it will be a year and I was thinking about renting it out to get started in buy and hold. I wanted to do a HELOC but I have little to no equity so I'm definitely trying to find funding for buy and hold investment properties. I don't know where to start or whom to go to. Can you give me advice? I definitely appreciate it.
So for my second deal I house hacked again ! maybe look into moving into another home maybe with more units. you could get in with low money down still and then rent out the other units and your SFH! just an idea.
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Upstate, NY · Member since 2016 · 200 posts · 277 votes
9y
Originally posted by @Timothy Metra:

You're a bank manager for a large bank, your wife is a real estate agent, your friend has 100+ rentals with you, your father is an attorney, and your mother is a real estate agent...
Wow.
You know how some families have the military thing going? Mom, dad, brother, uncle were all in the military. Guess what Tommy is gonna probably do?
You're like that, but with real estate. Hahaha, that's awesome. You're literally surrounded by everything pointing towards you should being an investor. I just thought that was funny (not in a bad way), glad you're using your knowledge to help beginners. You're doing a great thing, man. Just had to drop my praise for it!
Its super funny, I wanted to be an entrepreneur after college. I looked at a ton of businesses and all of them had concerning risks that I could not overcome . When I looked at everything going on in my life real estate was a no brainer. The buddy I stated in that blurb actually started before me as well so he was like my market test . I was confident to invest because I saw the success he was having short term and it allowed me to build the confidence to jump in as well.
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Delmas Edwards
Warren, MI · Member since 2015 · 140 posts · 36 votes
9y
@Account Closed Am I able to rent my SFH out and apply for another FHA Loan for a property with more units or another SFH?
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Justin Charpentier
Poughkeepsie, NY · Member since 2017 · 32 posts · 4 votes
9y
@Kuba F. I'm finding MLS to be lacking for sure. Where might I find wholesalers local to the markets I'm investing in?
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Kuba F.Pro Member
Real Estate Investor · Los Angeles, CA · Member since 2013 · 2k+ posts · 694 votes
9y
@Justin Charpentier you can search meetup.com for real estate investment groups, or local REIA (Real Estate Investment Association) chapters. Stay away from any group sponsored by an education/guru company. FIBI (For Investors By Investors) groups are pretty good. There's also a marketplace forum here on BP where wholesalers post their deals. I'm not sure if you have to be PRO to reply to them. With wholesale deals, make sure you do your own due diligence and run your own numbers.
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OP
Upstate, NY · Member since 2016 · 200 posts · 277 votes
9y
Originally posted by @Andrew Taylor:

Hello and thanks for offering your help.
My current home is worth about $202,000 or Zillow quote, but I'm not sure if I can get that I. This market. I currently owe about $190,000.
I'm building a home and plan to move and am considering renting my current home vs selling it. I only think I could get roughly $200-$300 per month in cash flow from doing this. I'm a little apprehensive about renting especially if something breaks down. I plan to simply save all cash made from the rental.
The home is in N chesterfield VA and I wanted any advice about renting unless you think this is something I should try to sell first. Any help is appreciated.
I would carefully carefully run those numbers on your current house. I would run them as worst case scenario #s. I have seen many people try to hand on an old primary residence because they can rent it for 1000 and the mortgage is 850. however they get crushed when they have all the expenses that come with owning a rental property.
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Wendell De Guzman
Investor · Chicago, IL · Member since 2013 · 2k+ posts · 1k+ votes
9y
Originally posted by @Justin Charpentier:

@Kuba F. I'm finding MLS to be lacking for sure. Where might I find wholesalers local to the markets I'm investing in?
Here are the ways you can find wholesalers in your market:
1. Google "We buy houses [city]". Then call at least 10 of those people - chances are, some of them are wholesalers.
2. Search BP (search field on the upper right). Type in the same keywords like in the Google search above.
3. Find out the different Real Estate Investors Associations in your city and attend ALL of them. Network, pass out your business cards and talk to the wholesalers you can find there.
4. Seek out different real estate groups in your city that has a Meetup.com page. Choose the largest and active meetup groups and do the same thing you would do as #3 above.
and
5. Seek out "real estate investors" in LinkedIn and connect with them. Chances are good some of them are wholesalers and don't mind wholesaling some of the deals they get their hands on.
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OP
Upstate, NY · Member since 2016 · 200 posts · 277 votes
9y
Originally posted by @Delmas Edwards:

@Account Closed Am I able to rent my SFH out and apply for another FHA Loan for a property with more units or another SFH?
short answer is no . long answer is kind of.
so you can typically only have 1 FHA loan at any given time. that being said some people have had success refinancing out of the FHA loan into a conventional and then getting another FHA. I have never tried this but I had a MLO recommend it to me early on. That being said after your FHA loan you can hang on to that and if you are moving you can still get great financing on conventional loans for a primary residence. Most small banks offer conventional financing of 5% -10% down range if you are moving into the property. In my house hacking career (lol) I have gotten 1 FHA loan 1 5% down conventional loan and 1 10 % down conventional loan . all of these have low and fixed interest rates and a 30 year term.
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Justin Charpentier
Poughkeepsie, NY · Member since 2017 · 32 posts · 4 votes
9y
@Kuba F. thank you! This may be the best piece of info I received today!
@Wendell De Guzman I appreciate your insight. Thank you.
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OP
Upstate, NY · Member since 2016 · 200 posts · 277 votes
9y
Originally posted by @Colby Stoker:

@Account Closed
Hey Bryant,
Thanks for being willing to help. I am new to this all and am trying to educate myself as much as possible, but I feel I have read/heard different things on analyzing deals. When you come across a property you are looking to buy (Single family home, duplex, triplex) to rent it out what numbers do you use to see if it is a good deal?
Just looking at my spreadsheet right now and a few things I think are really important .
first thing I do is take my income and remove 10% for vacancy . I actually run at 98.8 in 2016 however you need to be super conservative because things change ! after that make sure you plan on property management even though you may not use one initially . This leaves room for you to hire one down the road. then you have your Cap ex which I use 15% .
most of the other things like utilities mortgage and taxes you can get exact numbers for but the things you have to estimate please just estimate on the high side.
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