I have been trying for years to reinvest $100,000 into some form of real estate and have gotten absolutely nowhere. Because I own my own business and deduct HEAVILY off it, I qualify for zero mortgages, even with perfect credit. Moreover, Coronavirus has successfully killed my shot at non-traditional loans.
I live in a highly desirable coastal area. There is no such thing as buying the $60k house here, doing repairs and re-listing at $250k. Even complete dumps are $150k so my $100k goes nowhere. Land is a fortune.
Without a mortgage I can't buy a rental property with just $100k. I've tried wholesaling but given the desirability of this area, most homeowners think they have oil under their property and can sell for far more than I can offer them.
It seems like my only option is to buy a double wide or invest in REITs - neither of which overly thrill me.
The biggest need here is affordable housing.
Its easy to feel like you've run out of options after slamming your head into the wall so I wanted to check in here. Are there other avenues of real estate investing I'm overlooking? Other financing I've ignored? Or...do the cards just fall sometimes where it's just not favorable under your personal circumstances?
Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
6y
You could be a private lender, yields on private loans have jumped up lately. You could invest with a partner or in a syndication. You could invest out of state. Most of my clients are from a more expensive market. If you have cash, you can certainly get into the game. You might just need to get a little more creative.
LOL this guy thinks that Wilmington NC is a high cost coastal market, forgive me for laughing but, you have many properties under $150k in your city itself and Fayetteville is only a 2 hour drive where there is tons of stuff under $100k.
First of all, I'm not a guy. Although based on your comment you impress me as the kind of person who would never consider that a woman could invest in real estate.
Second, I'm sure looking from the outside in and comparing it to say, Miami, we are cheap. The average wage in Wilmington is tragically low against our cost of living. You wouldn't know that unless you lived here.
You also wouldn't know that while we have "a lot" of houses < $100k there almost exclusively in high drug/crime areas or require so much rehab (large historic home area) that you won't make much on a flip. If you're just looking at listings you hardly have a sense of the immediate area.
Hi Casey - I feel your pain! I have had success with using private money lenders. These are people who have a self-directed IRA, and they are normally not earning any interest on their IRA account. It takes some networking to build your network of private money lenders, but it is a great way to buy properties if you can't go traditional routes. And you are right, lenders are being super conservative right now. Since this is based on relationships, terms are negotiable. You can also become a passive investor using your $100K. One more suggestion, look to your community lenders. I just did a cash out re-fi on one of my rentals, yes during this time, and it was easy smooth process. The bank was local to my area, made all of their decisions in house, and I just stopped by and introduced myself. Hope this helps, and good luck!
Thanks Nancy, this is the first I'm learning about a self-directed IRA. I'll definitely be checking this out!
House was renovated in 2019 with new roof, HVAC, appliances, etc. long term tenant in place. house was never on MLS
And it’s not in a high crime pocket.
Sometimes if you put in enough time and effort you find good deals. But other people will sit back and complain about how it can’t be done till the cows come home.
They paid for a new roof (approx. $13k?)...new appliances ($5k?)....new HVAC ($10k?)...could show cash flow and sold it for $95k with a tenant in place?
Something sounds like its really missing from that story or you robbed them blind
@Casey Roman you need more Brandon Turner in your life. It seems like you have a lot of limiting beliefs.
I’ll bite. How many lenders have you talk too? Have you tried any smaller banks?
@Steven Ko NAILED IT. All I hear the original post saying is excuses. Every response from the original poster is "great idea, BUT". I would recommend reading the book Extreme Ownership and deciding if you want to be a real estate investor, and what kind? Congratulations for saving up that much cash, but to say it is worthless, it just blows my mind. There are so many great options already listed in the responses in this forum. No more excuses, you need to jump in with both feet, or you can only blame yourself!
I haven't been at this too long and we've done flips, rentals, private lending (as lender and lendee), traditional loans, local bank borrowing, borrowing from family, sweat equity, owner carry (owner side), new construction, wholesale, and seller finance (on buyer side). GET AFTER IT! You CAN do it! But nobody else can do it for you!
You're right...discussing everything I've tried so far (whats worked and hasn't) and asking for insight from others... is just so lazy.
Give me a break. Listing your own accomplishments to someone ASKING for perspective on different avenues is about as valuable as the lollipop the banks give me after telling me I don't qualify for a loan.
If you saved up $100,000, could you buckle down and save another $50k so you would have enough to accomplish your goals? From the way you described your business, are you saying it's not profitable on paper? If so, then that would explain why you can't borrow based on it. Is there some other income source you could create to prove creditworthiness?
Also a good idea. My video production business is dead in the water with Covid. However I am almost ready to take the MLO test and thought about buckling down for a period with mortgages to save up the money.
Let me ask you this...if I saved up another $50k and assuming the property needs no repairs...am I wise to sink my entire savings into ONE property? This was the value of the loan...spread that money over small down payments. Thoughts?
Investor · Wilmington, NC · Member since 2016 · 211 posts · 262 votes
6y
Houses for 87k have about a 5k HVAC, 4-6k rood, and about 3k in appliances. House had new floors and other improvements as well but I believe your prices are off.
They asked for 90, I offered 87.5 and they were happy with that. So I would call it a good deal and not robbing them blind.
My point is more so that there are rentals around the 100k price range in Wilmington that are not high crime, don’t require heavy reno, and cash flow well. There was one off princess (not the best area but not creekwood) that was listed for 110 and was rented for 1,050. You have to shop for a while and visit some properties but it’s not unheard of. I’m not trying to convince you to buy something you don’t feel comfortable with. Maybe syndication is the route for you
Arn thanks for the reply! Admittedly I'm not well versed on syndication but as its been suggested a few times here it's now my dedicated reading for tonight. Thank you!
I was thinking of repurposing a nonperforming commercial structure and placing a triple n tenant but whatever. My time contributing to the thread was obviously a waste. Lesson learned. Carry on.
Specialist · Earth 2.0 · Member since 2019 · 598 posts · 271 votes
6y
As others said I would look at being a private lender in First Position, buy a rental, or investing in a syndication. As always, do your homework three times before making a decision
As others said I would look at being a private lender in First Position, buy a rental, or investing in a syndication. As always, do your homework three times before making a decision
I couldn't agree more. I've been doing my homework all day and feel like I have a much bigger new wind in my sails. Thank you!
If you saved up $100,000, could you buckle down and save another $50k so you would have enough to accomplish your goals? From the way you described your business, are you saying it's not profitable on paper? If so, then that would explain why you can't borrow based on it. Is there some other income source you could create to prove creditworthiness?
Also a good idea. My video production business is dead in the water with Covid. However I am almost ready to take the MLO test and thought about buckling down for a period with mortgages to save up the money.
Let me ask you this...if I saved up another $50k and assuming the property needs no repairs...am I wise to sink my entire savings into ONE property? This was the value of the loan...spread that money over small down payments. Thoughts?
The reason to go all cash on an investment property is because you haven't been able to get a loan which limits your property purchase options. That gets you in the door. Get some cash flow coming in, save that up, maybe refinance the property later and do it again.
I was thinking of repurposing a nonperforming commercial structure and placing a triple n tenant but whatever. My time contributing to the thread was obviously a waste. Lesson learned. Carry on.
Dont say that.. that was a great idea if you can partner on a development deal.. I am sure it's been done before..
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y
@Casey Roman I apologize for mis-gendering you, it was not my intention and it was not immediately clear from the small profile photo. To be average and match the income for Wilmington the cost of living index should be 77 and it isn't it is 94, which is still less than the US average. You don't need to live somewhere to look up publicly available data.
It is also true that the least expensive properties are in the least desirable areas, however nobody is saying you can only invest in your city, there is a whole country out there. If what you're trying isn't working in the current location look for a new location, and in your case you need not travel far to Fayetteville even where the Cost of Living index is lower, the population is larger, and homes are less expensive.
Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
6y
@Casey Roman I had a high W2 and great credit and could secure normal financing, however I got several people to do owner carries. I have purchased 3 different 4 plexes and one house with a down payment and below market interest rates. Dont give up, as its a mindset for sure! Also, maybe you can use some down and use hard money lender to flip a project. Think out of the box and dont give up! I started small and now worth $4k million. I came from nothing. Dream big, but take action
I was thinking of repurposing a nonperforming commercial structure and placing a triple n tenant but whatever. My time contributing to the thread was obviously a waste. Lesson learned. Carry on.
Dont say that.. that was a great idea if you can partner on a development deal.. I am sure it's been done before..
Oh, not you, Hai. The discussion overall is much more micro than expected. Cheers!
Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
6y
@Casey Roman I'm coming to your rescue. You are NOT the only one in this predicament. As others have said...look at other Markets...I like Cleveland for my OOS Investing. Look at Chemical Bank....they have funded mortgages on properties that are as low as $35K. My bet is as a business owner if you let them know you will fund half the deal you could probably find a SFR for 50K in a C/C- Neighborhood,,,,you fund $25K of it...they give you a "mortgage" on the rest and you can get gross rents of somewhere between $800-$1,100/mo You can buy 4 of them with that $100K (DO NOT do it all at once....get your feet wet with the first one). Find an investor friendly agent like I did that walks the walk and talks the talk that also owns rentals in Cleveland....they will know the good PMs and the bad ones as well as the good contractors.
I also flew out to Cleveland multiple times.....that obviously is difficult to do right now, but the beauty of it is that's what home inspections are for,,,,,,,get a good home inspector like I did and they will be your light.
Real Estate Entrepreneur · Owasso, OK · Member since 2015 · 220 posts · 154 votes
6y
@Casey Roman true true
BwahaHaha I want to help not hurt! But you've got way too many excuses!!!
My list of ways to do creative investing was not to tout my accomplishments, it was to encourage you that if you want something badly enough you FIND A WAY!!!!
Get creative. Quit saying no and start saying yes. You can do this!
You could be a private lender, yields on private loans have jumped up lately. You could invest with a partner or in a syndication. You could invest out of state. Most of my clients are from a more expensive market. If you have cash, you can certainly get into the game. You might just need to get a little more creative.
This is actually what interests me the most. I'll be quite blunt...I am NO landlord. I have been in the past and I have also done AirBnb rentals and I find that my zero patience, zero brain-to-mouth editing function has severed me little in those realms. Joseph do you think I could get started in this with just $100k? Are there any education sources you recommend? I imagine the legal aspects are enormous and I'd like to start learning asap.
Which "this" are you referring to, the private lending, syndications, or partnering? $100K should be plenty for any of those strategies. If you're looking for the most passive method, then I'd look into investing in others syndications. There's a book in the BP bookstore called the Hands Off Investor. I haven't read it, but have read a lot of posts and articles from the author, and he seems pretty sharp. Or, just find a someone you like and trust that is investing, and offer to partner with them on deals or lend them money. In either case, consult a real estate attorney to write up the agreement. That will require more upfront negotiating on your part, but could potentially be more lucrative.
Apologies, the "this" as in regards to private lending.
Hey man, THIS, Private Lending, would be your BEST option to hedge your bets, not deal with any tenants, and leverage the experience and expertise of a well-seasoned investor/corp/entity that knows it's market well. This has been my strategy for the past almost 2 years, and is now generating 90% of all my income, 100% passive! Good Luck!
Investor · Wilmington, NC · Member since 2017 · 5 posts · 5 votes
6y
oh Casey I used to be you, I remember your thinking. you just have a bad attitude right now and dont know enough yet, and its ok. It would help you to get off this forum of investors who know more than what you're ready to understand right now and get in your car and start looking for places here in Wilmington If your car doesn't start tomorrow ride a bike. If you don't have a bike walk down the street and look. The weather has been beautiful:) Smile and say hi to people on their porch and tell them you love the neighborhood and would love to own a home here someday. Do this enough and someone will probably tell you who in the neighborhood is thinking about selling. Go knock on that door (everyone is home they'll probably answer). Go from there. Yes yes its dangerous right now with covid, use common sense, but still get going.
If you own a business than you already know you need to just start to get started.
Talk to investors in Wilmington who are in the game and know the area here. Some have already replied to you in this thread. Start building a real estate team, educate yourself about all that good stuff.
In the beginning you know so little that you can't see the locals who are making deals with less money than you. Guys like me:) honestly I used to say the same stuff about this over priced market as you and I certainly didn't have 100k to start with.
When I had your attitude i didn't network online because most of the extremely knowledgeable, nice, helpful and generous investors on BP for example, don't live in Wilmington, where I want to invest (for now). (And honestly most are smarter and more experienced and have better ideas i don't understand yet. I'm not knocking BP or forums in general, its a great tool and reference that I check pretty much everyday.)
But people who don't live here don't know the neighborhoods, they haven't seen which streets have changed or are changing or know people here who are getting ready to develop certain areas that haven't been made public yet. A good local agent would know that though. (There's another option to start with, a good agent knows pre-market deals you can get in on) Instead i networked with people and investors here, I worked at that, and still do. Hence this reply.
But for example, I closed on a 4-plex today. Taaaday! Yes in Wilmington, where you and i live!! With covid and recession looming and no one loaning money. I signed the papers in my car because it's crazy times whatever. Man was that hard. And how did I hear about my off market 4plex deall? From my investor buddies in Wilmington of course:) And I'm looking forward to doing that again and again. But it only happened because people who are more experienced and better than me knew that I'm looking and want to help.
if you want to be in the game stop spinning your wheels in the mud and get out and push. Whoever posted about Brandon Turner was spot on. Get his books they're easy to read and are great.
good luck and hopefully see you soon at a BP meet up in the near future!
