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.
@Isaac Pyle. You could also buy a single family property and rent rooms to friends or a basement with separate access, if it's possible with city code.
@Frank Patalano, For one thing, my wife is not very supportive of me getting into real estate investing. But mostly, trying to get my finances right. Currently about 60k in debt (a little credit card debt, mostly car notes) with not much saved up. I’m looking at a 20k bonus later this year (which my wife wants us to pay down debt with) but I think I’m going to use that to get started. It’s just going to take a lot of convincing. I’m really hoping my first deal doesn’t flop so that I can get a little more buy-in from her. I want to start with some flips to generate capital and then move into brrrr.
Don't be afraid of debt. Just be afraid of the type of debt. My current debt is $36,909,750. Last year I paid ~$1.5m in interest. So long as that debt is backed up by cash flowing properties, I saw the more then better.
I'd do a smart BRRR to get her buy in before a flip. Flips can be capital intensive (if you don't have a money partner)
@Frank Patalano, For one thing, my wife is not very supportive of me getting into real estate investing. But mostly, trying to get my finances right. Currently about 60k in debt (a little credit card debt, mostly car notes) with not much saved up. I’m looking at a 20k bonus later this year (which my wife wants us to pay down debt with) but I think I’m going to use that to get started. It’s just going to take a lot of convincing. I’m really hoping my first deal doesn’t flop so that I can get a little more buy-in from her. I want to start with some flips to generate capital and then move into brrrr.
I completely understand. My wife and I do not see eye-to-eye on real estate. Basically you guys need to be investing no matter what. Real estate is one way to do that investing and more importantly it's the way that YOU want to be investing.
My partner Jimmy started investing when he had $70,000 in student loans.
@Frank Patalano, For one thing, my wife is not very supportive of me getting into real estate investing. But mostly, trying to get my finances right. Currently about 60k in debt (a little credit card debt, mostly car notes) with not much saved up. I’m looking at a 20k bonus later this year (which my wife wants us to pay down debt with) but I think I’m going to use that to get started. It’s just going to take a lot of convincing. I’m really hoping my first deal doesn’t flop so that I can get a little more buy-in from her. I want to start with some flips to generate capital and then move into brrrr.
Don't be afraid of debt. Just be afraid of the type of debt. My current debt is $36,909,750. Last year I paid ~$1.5m in interest. So long as that debt is backed up by cash flowing properties, I saw the more then better.
I'd do a smart BRRR to get her buy in before a flip. Flips can be capital intensive (if you don't have a money partner)
I agree with Cody. I owe the Banks millions but I've never worried about it. I've never missed a payment because my assets pay me constantly.
@Frank Patalano I have a property that ive had for 5 years now and wondering should i use my equity platt form to go into flipping homes for income so i can let go of my current job im at now to go forth with flipping homes and renting them out
@Frank Patalano I have a property that ive had for 5 years now and wondering should i use my equity platt form to go into flipping homes for income so i can let go of my current job im at now to go forth with flipping homes and renting them out
If you can find deals, borrow the money to make more money. Just make sure that your numbers are conservative.
I own in California but looking at cheap homes for sale in OKC?
The way to flip homes is buy a home say for $60k and how long does it usually take to climb in value? I say that to state this cant myself and another person sale back and forth to each other as markets go up on a monthly basis?
I own in California but looking at cheap homes for sale in OKC?
The way to flip homes is buy a home say for $60k and how long does it usually take to climb in value? I say that to state this cant myself and another person sale back and forth to each other as markets go up on a monthly basis?
I'm rather confused by your question. When you fix and flip a house you make extra profits from the improvements.
Selling back and forth between 2 people repeatedly, just to increase the value of a home would be unprofitable due to fees/closing. It might be illegal as well.
You don't just sit on a property and wait for it to rise in value.
If you put a property under contract at 30% off the true value you may be able to sell it quickly.
I'm just not devoting enough time to getting everything rolling. I've figured out that I want to do medium to large multifamily, but I've got to figure out where. I will be honest in that I also would like to establish relationships with experienced investors, but haven't pursued that in a meaningful way.
I'm just not devoting enough time to getting everything rolling. I've figured out that I want to do medium to large multifamily, but I've got to figure out where. I will be honest in that I also would like to establish relationships with experienced investors, but haven't pursued that in a meaningful way.
Admitting your failures are the first steps to Improvement. Set some goals and network to get there.
For me, it is a result of analysis fatigue and not having a good location to scour for opportunities worth reviewing.
Understandable. San Diego is one of the worst markets in the country.
Your 2 best choices are setting networking goals and looking at other markets.
I do not know what your definition of worst or what your source is, but San Diego is typically listed as one of the 3 best ROI large cities for this century.
Look up the average SFR price 5 years ago and compare it to the average price today. Do similar for the average SFR rent in the last 5 years. San Diego RE has historically outstanding appreciation and cash flow for the long term buy n hold. For our San Diego rentals my cash flow is outstanding and I try to keep the LTV high.
I know of no San Diego RE investor who purchased a San Diego buy n hold 5 years ago that has not done outstanding.
I'm worried about the growth prospects from now looking to the future. Perhaps I am mistaken but I've heard from so many investors who are having a hard time getting started in multifamily buy and hold rentals in that market.
Price to enter is high and the competition is high. This means that for most new investors it is a tough market to enter. It is also true that if the appreciation (market and rent) were to end, the return would suck.
The appreciation has far out paced inflation for over 50 years and there is a housing shortage so it seems like at a minimum rent appreciation seems to be a good bet in the near term (<5 years).
San Diego has been a great place to invest for ROI for at least 50 years. Without a crystal ball no one will know if that continues to be the case but it has a great track record and many indicators indicate it is likely to continue to produce good ROI. This historically outstanding ROI is why the competition is so high and one of the reasons the price to invest is high. That happens when something has produced a good return for many years.
However, to imply that is has been a poor buy n hold investment location is factually incorrect as it has produced near the top return in the country for this century. Question is: what will produce the best return in the next 10 to 20 years? My bet is that it will not be one of the low/no appreciation, higher cash flow Midwest markets. I also lean to it being a location that has produced outstanding historically appreciation but possibly not in as tenant friendly state as CA, WA, OR (so potentially none of the West Coast). I have a fear of statewide rent control potentially impacting the long term ROI in those states.
I see this has struck a chord with you.
Let me just state that I have never invested in San Diego and I get pissed myself whenever I hear someone calling my local market one of the worst markets in the country.
This is in the new investor forum and the original question was what's holding you back. You must agree that it's pretty tough for a new investor to get started in San Diego. Whether you agree with me or not I guess we'll just have to agree to disagree.
>I see this has struck a chord with you.
Naw. I am a typical San Diegan and do not worry about much.
>This is in the new investor forum and the original question was what's holding you back. You must agree that it's pretty tough for a new investor to get started in San Diego. Whether you agree with me or not I guess we'll just have to agree to disagree.
I do not disagree that without house hacking it is a tough market for a new investor because the prices are so high. Without house hacking, with an 75% LTV, you would need a fairly large sum of money to purchase an RE without partnering. Being a new investor forum and using a vague term like worst can be misleading. If by "worst" you meant hard to get a start in (especially in not house hacking) then I agree San Diego can be difficult because of the high price point. However, I suspect most people interpret worst to be a poor place for RE investment return. That is provably incorrect. Case-Shiller lists San Diego only behind San Francisco and Los Angeles for best return this century. Both San Francisco and Los Angeles have implemented rent control in locations but San Diego has not. This bodes well for San Diego continuing to produce an outstanding ROI.
It comes down to what you meant by worst.
No worries, I am not just starting in San Diego and expect to place an offer on one or more San Diego RE this month. I suspect it benefits me that San Diego is difficult for new RE investors. However, I want the new investors to choose not to invest in San Diego based on the facts (i.e. high price point, poor initial cash flow) rather than misleading reasons such as that it is a bad buy and hold RE market (it is not).
Capital/financing is holding me back. I own a construction company with a partner. My partner is also a realtor and has been for 10 years in our region. We are looking at hard money lenders but it seems that they all require the prerequisite of "have you done this before?" That is a no. We have around 30k saved but that isnt enough. We dont have much credit established as a business because we have made enougg money to not need a line of credit for payroll or operating expense. We also do not own homes to use the equity from at this point. We want to start flipping before we buy our own homes. We feel we have a great team and network in place outside of private investors or lenders. We also have a very precise business plan with elaborate details on our criteria, exit strategies etc. Looking for help!
Capital/financing is holding me back. I own a construction company with a partner. My partner is also a realtor and has been for 10 years in our region. We are looking at hard money lenders but it seems that they all require the prerequisite of "have you done this before?" That is a no. We have around 30k saved but that isnt enough. We dont have much credit established as a business because we have made enougg money to not need a line of credit for payroll or operating expense. We also do not own homes to use the equity from at this point. We want to start flipping before we buy our own homes. We feel we have a great team and network in place outside of private investors or lenders. We also have a very precise business plan with elaborate details on our criteria, exit strategies etc. Looking for help!
You belong to the ctreia?
See if you can help a flipper with a rehab. You could use that as experience especially if the flipper will let you cut into a deal.
I'm surprised at the hard money lenders. If it's a good enough deal they shouldn't care because they'll get the property if you screw up.
The only other option is to house hack the first deal even though you don't want to own one. Then you can say you have experience and you can buy with a cheaper interest rate
so my concern is, if i find a property whether it be for sale by owner, on the mls via my business partner thats a realtor, an reo, or any other standard residential property sale, often you must act quickly. Is it not possible to get a preapproval from a HML for properties within a certain price range before or after repairs? That way i know its not a waste of time to hunt down property that will not get accepted?
so my concern is, if i find a property whether it be for sale by owner, on the mls via my business partner thats a realtor, an reo, or any other standard residential property sale, often you must act quickly. Is it not possible to get a preapproval from a HML for properties within a certain price range before or after repairs? That way i know its not a waste of time to hunt down property that will not get accepted?
I have never had a problem borrowing money from a hard money lender.
If you can't get a lender for the money you could always wholesale it.
not familliar with wholesaleing. Our skills lie in building and market analysis. Is it not possible to get a "virtual" preapproval from a HML in your experience? Or do you HAVE to have a property to show them to get any response?
not familliar with wholesaleing. Our skills lie in building and market analysis. Is it not possible to get a "virtual" preapproval from a HML in your experience? Or do you HAVE to have a property to show them to get any response?
What? Wholesaling is a pretty important option for you. Basically you put a property under contract at a great price then you sell the contract to someone else and get a fee to do it. Probably 30% of the people on Bigger Pockets are trying to do that.
I can get a preapproval but I've been doing it for years. I'm not sure if you can. Try Harper Financial out of Boston. I've never used them before but I have friends who have.