I have been wanting to get into real estate investing for over a year now. I have done all the research and I am ready to get my feet wet. I have come across a duplex that 79K. 100% occupied with 1400/month income. I have tried conventional finance, but do not qualify. Is there any advice for how I can find financing. Also, do any of you think this is a good deal? Thank You in Advance for your advice!
Without having put feet on the ground I would not venture to guess whether it's the right deal for you or not.
Questions I'd ask myself
What are the terms of the leases?
How long have they been there?
Do I have the cash on hand to bring vacated units to marketable condition?
Can I afford to cover payments for vacancies?
I have tried conventional finance but, do not qualify.
Would you mind if I asked why?
how I can find financing.
What about unconventional financing?
Would those terms make the deal less attractive?
All the Best, Lee
The definition of a "good deal" is different for everyone. I guess, it really depends on your goals and how much time you want to put into it. If you're looking to buy and hold, there's many more factors to consider such as neighborhood, type of clientele, job growth, etc. As a general rule of thumb, I personally only work areas that I feel comfortable in.
Regarding financing, you may want to look at other options (i.e. other lenders, private money, partnerships,etc). It will depend on your goals and your comfort level.
Hope that helps!
I would try to line up financing before I started looking at properties. If you are looking at properties without finances lined up, the agenta are not goin to take you serious and you will build a bad reputation, which ia not good for an investor at any stage.
You want to have finances lined up and have a clear plan of action before you start looking at properties.
You need to understand why is it that you don't qualify for conventional financing because ultimately your goal is to utilize cheap conventional financing. You want to fix any issues that may be holding you back from conventional financing.
Lets say even if you are able to get a private money loan at 12%, but you still need to be able to refinance to a conventional loan because you can't continue making payments at 12% for a very long time. So I think its important that you are able to utilize conventional financing.
You need to know the expenses to determine the true rate of return. (maintenance, insurance, taxes, utilities, carrying costs, vacancy rate, plus more)
There is always a way to get a deal done if you have a motivated seller, but find out why. most importantly, check nearby rentals and see if the rental rate is in line with what your place is charging. I have seen this: you can have the first two months off of rent, but pay a higher monthly rate in rent. The place looks better then it is and you get screwed. Trust no one and do your own investigation.
I agree with Max. Line up your cash first then look for acquisitions within those limitations. Figure out your long term goal: Buy and hold or flip for equity gain
If you really are new at this your post should read thus:
Hey guy's help me out - I have narrowed it down to these eight deals & two of them I have under contract (with contingencies).. I have the following exit strategies.. the motivation of the seller is... my timeline is XYZ, I can put up $x and I need to find a way of funding $y.. What's my best method of getting these deals funded.. How can I wholesale a couple of them to build my cash reserves.. etc, etc.
If you are looking at only one deal at a time you will get emotionally attached to that deal .... "the last melon" (Ice Age). However, if you have a bunch of deals that you are comparing, can see the exit strategy for each, undertsand your ROI/ROE (easy concept for an accountant), how much skin you can put in the game and what you need to make the deal work - then you are on the road to finding the "right" deal.
As a company, we intentionally put out blind offers on properties so that we can control the asset - once we have it under contract we can then assess our position. We already know that the deal works fiscally for us - we only have to assess how realistic our "vision" is for the project and does the "advertsing" (i.e. listing information provided) live up to reality.
If you have the right deal idenified, get it under contract (with contingencies) - the money will be found. The problem is most people don't put in enough effort to look at a plethora of pottential deals to get enough "good" deals to select from. RE investing is a contact sport.
Also, when you post please provide enough information to help us help you - you don't even provide the part of the US that you are located in. A deal in D.C. or Seattle is very different to Tampa or Cleaveland. The more information you provide the better advice you will receieve and also the more serious your enquiry will be taken.
Keep up the good work - just put your investing into a new level of activity and analysis. Just think of this as an auditing process - get into the details and look at enough reports to come to a conclusion that is valid!
Need more info to tell you if it is "good" or not. I would say that it is too lean for me, but I am not sure what your goals are either. In my opinion, If you are having a hard time getting financing, I would consider flipping contracts to get started, or go after owner financing with sellers. There are a lot of posts on this site about both topics. You can also feel free to PM me and I would be happy to give you 15 minutes of free advice. Good luck!! :mrgreen:
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