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.
I’m currently renting and have enough saved to buy a rental property long distance, however I’d like to have my own home and house hack too, but my area is too expensive for that right now. I’m torn with using that money or a rental elsewhere (and all the risks that go with that), or continuing to save until I can afford to house back in my area.
@Frank Patalano Currently I am working on trying to get a HELOC to start acquiring some rental properties. For the time being I am going to go with a turnkey provider while I can dislodge from my current job.
One thing that has me kind of worried is that the TK provider told me to get the initial loan under my name because I could get a better rate rather that trying to do it through my LLC, but he told that once the loan is sold to the bank I could do the title transfer at that time. My question is that if this is possible as it would go from a personal loan under my name to a business one under the LLC... from my research I am not worried of the "due on close clause" but would trigger something else or is it entirely normal.
@Frank Patalano As a soon-to-be first time investor, I can say that my immediate reserves lay in not knowing how to evaluate a 'good deal' and not knowing my market well enough.
I'm a bargain hunter but I'm also a cautious investor. I figure it's worth my efforts to be thorough when buying property. Without the competence to quickly evaluate a property, I worry that I might act upon a bad deal. As for now, I am still weeding through the forums and resources to assure I fully grasp the concept of a real estate deal before I make a move.
In knowing my market, I have recently relocated from Sacramento to Philadelphia. 6 months in, I am still getting a feel for the region. My hope is to purchase a live-in multi-family unit as my first property. I have spoken with locals, taken note of nearby universities, public transit routes, and other signs of a rentable locale. My next steps are to track down a few nearby meetups and connect with local property managers for feedback.
To answer your question in brief, I feel that there is an overwhelming amount of information out there that requires sifting and qualifying before one can confidently feel ready to make a move.
Your doing fine. Keep educating. But don't use analysis paralysis as an excuse. You will never gain all of the knowledge. I still don't have all of the knowledge. Going to local meetups is an absolute must for your next step.
So I've secured a cash out refinance and they're offering me 30k in cash. I can't manage to get a bank to offer me a mortgage even with a credit score of 750+ and a huge down payment. I'm really stumped. Ideas?
What are you trying to get them to approve a mortgage on?
Not knowing all of the facts but if you can get a traditional mortgage. If you can get $30K and can find a partner with $30K then you can go to a hard money lender and buy a property up to $240K.
@Frank Patalano great post. Seems like there are only three answers in general, fear, money, education. Everyone can eliminate fear by getting educated. Building the Capital can be the hard part. Especially when you get busy working, spending and living.
I find that finding a solid deal in this market is also a hard part of the process. If you find a great deal I've had plenty of people willing to throw me money.
@Frank Patalano down payments. I dont have enough yet.
I don't know your entire situation in one sentence but I will tell you that I had to sacrifice something for years in order to get started. You mostly have to have time, money, and experience/knowledge to get involved in real estate. Whichever one that you have the most of use to your advantage.
@Frank Patalano Not knowing a single person in the industry, I think, is my biggest deterrent.
Lol. Find your local REIA. Network everyday. Make appointments to see houses. Go to a meetup. That is how you build your network. Your network is your networth.
I’m currently renting and have enough saved to buy a rental property long distance, however I’d like to have my own home and house hack too, but my area is too expensive for that right now. I’m torn with using that money or a rental elsewhere (and all the risks that go with that), or continuing to save until I can afford to house back in my area.
If you are just getting started a househack is that safe option. Out of area investing requires more knowledge. Set goals on how much money you need to earn to get that downpayment. Pick up 3 side jobs of you have to.
@Frank Patalano Currently I am working on trying to get a HELOC to start acquiring some rental properties. For the time being I am going to go with a turnkey provider while I can dislodge from my current job.
One thing that has me kind of worried is that the TK provider told me to get the initial loan under my name because I could get a better rate rather that trying to do it through my LLC, but he told that once the loan is sold to the bank I could do the title transfer at that time. My question is that if this is possible as it would go from a personal loan under my name to a business one under the LLC... from my research I am not worried of the "due on close clause" but would trigger something else or is it entirely normal.
Thanks
I would be worried about the due on sale clause as well. I've have plenty of friends do it anyway with no problem. I wouldn't worry about an LLC until you more assets.
The other option is to save 25% down, set up and LLC, then get a commercial loan. All of my properties, including single families are with commercial loans.
@Frank Patalano I have been a contractor for years and I have worked with investors, asset managers, and so on. At this point what’s holding me back is knowledge of the industry and where to start
@Frank Patalano I was in the same boat as Jacob. I bought my first rental property almost a year to this date. Now that I want to start thinking about getting a second one. I find myself still second guessing every purchase.
@Frank Patalano what a great question. 2 things, analysis paralysis as well as the continued disappointment of running the numbers for deals in CT as compared to out of state markets. I’m convinced that I’ll find that diamond in the rough if I look hard enough but the numbers, especially property taxes, as well as the fact that CT doesn’t seem to be landlord friendly, continue to disappoint. The fact that I’m an engineer doesn’t help the matter either ;-)
The duplex —four plex is way too expensive now in Houston. It’s our first time want to go for multi units instead of sfr but there is no way to get a positive cash flow there.
I haven't looked into Houston lately. That's sad. Houston has always been a good market. When you are analyzing the properties what source are you using?
I am having a license being a part-time investor myself. so I am using my own excel calculator, har, zillow, etc.
@Frank Patalano I've recently just made the switch from employee to self employed. Which is a risk within itself lol. I'm hoping to generate a nice nest egg with in next 30-45days and then potentially get started with a multi-family. I live and work in N.Dakota, the market here seems to flux with oil field and seems to be on the rise as well.
Just don’t feel comfortable with calculating the deals even with the tools under BP. I don’t like just plugging numbers into something I need to understand how it is calculated and why it is calculated that way.
@Mark Bommarito I live in Wise County, Texas. There is a severe, terribly severe, shortage of rent houses here. Crime is low, prices are reasonable. Schools are decent. It's just a rural county that is growing, but its been growing for decades so it's not likely to stop growing any time soon.
@Frank Patalano totally new to the process and just learn of bigger pockets real estate is definitely something I want to get into. Being 51 and looking at retirement in 6 years and being the only provider at this time of a family of 5 it is a little scary.
Thank you so much, I will explore de 25% option with the commercial loan. I would prefer to have it done right from the get go than do acrobatics afterwards.