Providence, RI · Member since 2018 · 29 posts · 409 votes
7y
Having just recently bought my first property, I know for myself what was holding me back was the fear that I would overpay, especially in this type of a market. I would get analysis paralysis and basically talk myself out of every property I looked at.
@Frank Patalano knowing my market and getting outnof current debt
You can learn your market through networking.
Go to local open houses. Meet with agents. Go to the local meetups. Then you can make figure out the market.
You didn't give a lot of info about your current debt. I will say that my partner Jimmy had an easier time paying down is debt as he was house hacking a 4 unit. Profit from your properties allows you to pay down your debts faster.
Current debt is 6k on finally cc and 4k left on car. I own a home with my gf. We have a daughter so house hacking wont work. My house wont cash flow either.
Looking to purchase my first rental property! Feel like I am in the "Paralysis by Analysis" stage. Can not decided between SFH or Duplex. I like the cash flow of duplex but I am currently finishing school (21 years old) and only have so much money for a downpayment! Starting my first full time teaching job in January so will have more income to invest later on!
Olathe, KS · Member since 2014 · 18 posts · 3 votes
7y
@Frank Patalano I'm looking to partner with a house flipper by funding the repairs. Opportunity is to get to learn the process.
What's holding me back is the lack of knowledge to protect my funds as well as knowing what's a fair deal since I'll be funding partially and be lightly involved as I'm learning. Percentage on my dollars or percentage of profit or a bit of both, what that would look like.
Investor · Bath, NY · Member since 2015 · 149 posts · 44 votes
7y
Financing. I own two homes and am a registered nurse. I have a little bit of debt but not a ton and my DTI just climbs higher with each home I own. Plus saving a down payment each time is tough. Hoping to use a HELOC after we get this place fixed up and start a modified BRRRR process!!!
Real Estate Agent · Bloomington, IL · Member since 2018 · 14 posts · 0 votes
7y
@Frank Patalano As for myself and the analogy of not pulling the trigger; it is more along the lines of, I’m pulling the trigger but the gun is only shooting blanks. In elementary school, junior high and high school, my summers and weekends were spent working on my fathers rental properties. Now that I no longer associate with him due to unrelated reasons, I have started fresh. Those years of learning everything from painting to roofing to etc, has put me in a unique situation as of today. I currently own one rental which came from the purchase of my first residence, but I want more. Since I moved out of my first residence into a bigger home, for my growing family, I have been grinding. I have listened to every BP podcast and Money Show podcast, read books, picked the brains of locals, but I cant seem to get a bank to back me on a loan to prove myself, even with a 700+ credit score and a well paying career. All I hear is “we need 20%”. Nobody locally understands or cares to try creative financing (that Ive found). My issue is finding the funding. Putting the sweat into it isn’t the issue but understanding that “cash is king”, is a struggle. I know my market; I understand all the processes to getting started and continuing growth, I just need an opportunity.
Looking to purchase my first rental property! Feel like I am in the "Paralysis by Analysis" stage. Can not decided between SFH or Duplex. I like the cash flow of duplex but I am currently finishing school (21 years old) and only have so much money for a downpayment! Starting my first full time teaching job in January so will have more income to invest later on!
I love helping teachers. What percentage do you plan on putting down on the single? What is that as a dollar amount?
@Frank Patalano I'm looking to partner with a house flipper by funding the repairs. Opportunity is to get to learn the process.
What's holding me back is the lack of knowledge to protect my funds as well as knowing what's a fair deal since I'll be funding partially and be lightly involved as I'm learning. Percentage on my dollars or percentage of profit or a bit of both, what that would look like.
You could set up an LLC with your partner. Every would be in writing as to dollar amounts and profit.
Or you could lend the rehab as a mortgage.
With the LLC you would be more likely to split the profits. With a loan you would be more likely to get interest but no profit share.
Financing. I own two homes and am a registered nurse. I have a little bit of debt but not a ton and my DTI just climbs higher with each home I own. Plus saving a down payment each time is tough. Hoping to use a HELOC after we get this place fixed up and start a modified BRRRR process!!!
What about a partner? Find someone who wants to be in real estate but has no time. You can use their sti and savings and figure out a way to split the deal.
I was having problems with the dti fir a few years.
@Frank Patalano As for myself and the analogy of not pulling the trigger; it is more along the lines of, I’m pulling the trigger but the gun is only shooting blanks. In elementary school, junior high and high school, my summers and weekends were spent working on my fathers rental properties. Now that I no longer associate with him due to unrelated reasons, I have started fresh. Those years of learning everything from painting to roofing to etc, has put me in a unique situation as of today. I currently own one rental which came from the purchase of my first residence, but I want more. Since I moved out of my first residence into a bigger home, for my growing family, I have been grinding. I have listened to every BP podcast and Money Show podcast, read books, picked the brains of locals, but I cant seem to get a bank to back me on a loan to prove myself, even with a 700+ credit score and a well paying career. All I hear is “we need 20%”. Nobody locally understands or cares to try creative financing (that Ive found). My issue is finding the funding. Putting the sweat into it isn’t the issue but understanding that “cash is king”, is a struggle. I know my market; I understand all the processes to getting started and continuing growth, I just need an opportunity.
How much networking are you doing?
2 strategies that I can think of.
1 find a partner with money but no time. I there are not a lot of people but they are out there. They dream of being in real estate but are too busy working.
shoot if you lock up a great deal people will fall all over each other to partner with you.
2 wholesale a couple of properties to get small chunks of cash.
@Frank Patalano I'm looking to partner with a house flipper by funding the repairs. Opportunity is to get to learn the process.
What's holding me back is the lack of knowledge to protect my funds as well as knowing what's a fair deal since I'll be funding partially and be lightly involved as I'm learning. Percentage on my dollars or percentage of profit or a bit of both, what that would look like.
You could set up an LLC with your partner. Every would be in writing as to dollar amounts and profit.
Or you could lend the rehab as a mortgage.
With the LLC you would be more likely to split the profits. With a loan you would be more likely to get interest but no profit share.
Thanks for sharing your ideas. LLC is the route that we discussed. However, I am not sure what's a fair return. He mentioned either interest or profit but not both. He is also flexible and open for suggestions. So, I wanted to see how it's typically done.
I just need a lot more time to understand the process and get my educational foundation created. I've only started binging this stuff for about a week now. I'm hooked, I don't have much money, so I'm just really focused on saving as much as I can as soon as I can so that once I've gotten comfortable understanding the basics, I can spend the weeks to develop my plan before I actually get going.
I'm a big learn and plan first guy, so it's really all about getting all of that down before I actually start approaching CPA's, lenders, lawyers, realtors, etc.
You are early in the process so keep going.
Set goals to do so much reading a day. Try to listen to at least one podcast a day. Try to go to one networking event a week.
I wouldn't worry about a CPA yet. Get yourself 3 people first. A lawyer, a contractor, and an agent.
Go out there and look at so many properties a week.
Sounds good--Before I do that, I still need to determine my plan---including choosing whether I'm going to go with straight real estate investing, wholesaling, houseflipping, and/or BRRRR. I really need to study the pros and cons of these and how they fit into my goal(s). Any advice on that?
@Frank Patalano I'm looking to partner with a house flipper by funding the repairs. Opportunity is to get to learn the process.
What's holding me back is the lack of knowledge to protect my funds as well as knowing what's a fair deal since I'll be funding partially and be lightly involved as I'm learning. Percentage on my dollars or percentage of profit or a bit of both, what that would look like.
You could set up an LLC with your partner. Every would be in writing as to dollar amounts and profit.
Or you could lend the rehab as a mortgage.
With the LLC you would be more likely to split the profits. With a loan you would be more likely to get interest but no profit share.
Thanks for sharing your ideas. LLC is the route that we discussed. However, I am not sure what's a fair return. He mentioned either interest or profit but not both. He is also flexible and open for suggestions. So, I wanted to see how it's typically done.
Did he give you numbers to think about? For hard money I typically charge 12%. For private money I typically charge 6%.
I just need a lot more time to understand the process and get my educational foundation created. I've only started binging this stuff for about a week now. I'm hooked, I don't have much money, so I'm just really focused on saving as much as I can as soon as I can so that once I've gotten comfortable understanding the basics, I can spend the weeks to develop my plan before I actually get going.
I'm a big learn and plan first guy, so it's really all about getting all of that down before I actually start approaching CPA's, lenders, lawyers, realtors, etc.
You are early in the process so keep going.
Set goals to do so much reading a day. Try to listen to at least one podcast a day. Try to go to one networking event a week.
I wouldn't worry about a CPA yet. Get yourself 3 people first. A lawyer, a contractor, and an agent.
Go out there and look at so many properties a week.
Sounds good--Before I do that, I still need to determine my plan---including choosing whether I'm going to go with straight real estate investing, wholesaling, houseflipping, and/or BRRRR. I really need to study the pros and cons of these and how they fit into my goal(s). Any advice on that?
Real Estate Agent · Los Angeles, CA · Member since 2019 · 3 posts · 0 votes
7y
@Frank Patalano Good Morning,
I am recently engaged and I don’t have a substantial savings to feel like I can contribute to my first deal. Truth is I’m a little scared to commit to the mortgage payments.
I remember the same feeling when I first co-signed a new car. Even though payments were not expensive it seems like a big learning and maturing experience.
I currently have about 15k and my RE license so I am on the mls everyday while podcasting 15hrs a day trying to analyze and find the right deal
I would certainly love some advice so that I don’t miss my opportunities
I am getting very interested in the opportunity zones in LA right now but have an unanswered question. Can an opportunity fund be funded by non capital gains?
I think what has been holding me back is fear that I'm going to mess things up.
I'm in the same boat and have been for some time, especially after a rough rental experience from 2011-2013. Though to be honest I feel like I'm chipping away at those fears on a daily basis. Part of that internal strength, if you can call it that, comes from participating on these boards and connecting with like-minded folks.
Set a short-term goal and stick to it. Mine is to close my first deal by year's end. Whether that's syndication (what I'm most drawn to), a rental or whatever. Doesn't matter as long as the numbers work for me. Just want that ice broken so I can get into the water.
Once your short-term goal is set then map out the next couple years or more. You'll know what makes sense once you start collecting your thoughts.
You need to be comfortable with rehab if you want to get into houseflipping and BRRRR. It can be very stressful dealing with contractors, budgets, and the dreaded unexpected. I found that out the hard way from only one rental and it lead to near sleepless nights. Unless you're doing it yourself, which is another matter altogether.
Your current lifestyle and obligations might help dictate which path you choose. Your expectations will as well. The higher the risk, the higher the reward. If you want to start smaller then there are more passive ways to invest.
I am recently engaged and I don’t have a substantial savings to feel like I can contribute to my first deal. Truth is I’m a little scared to commit to the mortgage payments.
I remember the same feeling when I first co-signed a new car. Even though payments were not expensive it seems like a big learning and maturing experience.
I currently have about 15k and my RE license so I am on the mls everyday while podcasting 15hrs a day trying to analyze and find the right deal
I would certainly love some advice so that I don’t miss my opportunities
I am getting very interested in the opportunity zones in LA right now but have an unanswered question. Can an opportunity fund be funded by non capital gains?
Anyways thank you for asking the question
You are in a market with high prices. The car worked out fine and I'm sure the house will as well.
you are spending too much time on MLS. Those deals have already been picked through. The best deals are the ones that you find yourself. They will not be on MLS but through networking and marketing.
I have to be honest I don't know a lot about opportunity zones. I'm sure you can find plenty of information on here.
@Frank Patalano I currently live and work in Japan but am interested in purchasing small multi family.
I assume that you are interested in buying one here. You should look in a city that you know somebody in. once you buy it you'll have to pay a property manager