My Cash...is Worthless.

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My Cash...is Worthless.

Casey Roman
Member since 2018 · 26 posts · 34 votes

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?

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Joseph CacciapagliaBusiness Member
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.

[email protected]979-218-2286
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  • Oscar Miguel
    San Diego, CA · Member since 2018 · 53 posts · 17 votes
    6y
    Originally posted by @Joseph Cacciapaglia:

    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.

     What a great response!  For example, I've been reaching out to so many of my friends and family to chase down $80k-$100k for some deals I've been working on lately.  Points and interest rates being so much better than losing their investments or in a savings account getting 0.05%.  #iQUADRANT !!!

    0Reply
  • Anna Oscar
    Member since 2019 · 1 post · 0 votes
    6y

    @Casey Roman

    What are you interested in ? Passive income,syndication,buy hold?

    0Reply
  • Erin Dorsey RobinsonPro Member
    Real Estate Agent · Cleveland, OH · Member since 2020 · 280 posts · 365 votes
    6y

    @Casey Roman That’s a very honest self assessment. I commend you on acknowledging your strengths and weaknesses, people who can do that start out ahead, in my opinion. BUT there is good news! You can delegate the things that you are not good at. For example, in Cleveland, you could buy 2 solid properties in C areas or 1 solid B and cash flow on your $100k including the cost of property management company. People do it every day, my husband and I included. We have bought and held 10 units in this price range. Happy to help if you want to know more. In CLE $100k still means you’re ready to play ball!

    [email protected]
    0Reply
  • Henri Meli
    Investor · Morrisville, NC · Member since 2012 · 1k+ posts · 673 votes
    6y

    It is all mindset. Of course there is plenty you can do with $100k. Here is an exercise you can do for free. Will only cost you time, not actual money. 

    1. Eliminate the idea from your head that your $100k is worthless

    2. Get a pen and a piece of paper (or a notepad editor on cellphone, computer).

    3. Spend a couple hours per week on this website, read posts & blogs. Listen to podcasts. Every time you read/hear a new idea, write it down.

    4. Organize your ideas into Groups and sort them based on some criteria you define (cost, feasibility, time, ...etc)

    5.Investigate the most promising ones. Until you find the right fit for your scenario.

    I went through the same exercise a few months ago and I realized that this place is a gold mine of ideas from people who are doing things and solving problems. 

    0Reply
  • Steve GarnerPro Member
    Investor · Wilmington, NC · Member since 2014 · 128 posts · 38 votes
    6y

    Deals are hard to come by so when you find one, act quickly or it will be gone.  Spend a lot of time learning so you know a deal when it pops up. 

    Podcast Guest on Show #193
    0Reply
  • Carl Murray
    Rental Property Investor · Omaha, NE · Member since 2018 · 30 posts · 14 votes
    6y

    @Casey Roman you are never out of options, although it can feel like it. Have you looked at bringing in a partner? Use a partner and don't take anything home from the flip/rental... Just keep rolling it all back in and you will soon have enough for a down payment. Keep doing that and you'll eventually hit that sweet spot where you are your own bank.

    0Reply
  • Jason Waldo
    Investor · Kansas City, MO · Member since 2017 · 96 posts · 82 votes
    6y

    @Casey Roman I live in Kansas City and that 100k would buy a pretty decent rental property. I have helped other investors invest here that are in similar shoes. Pm me if you want to talk. There are a few option I have in mind.

    Thanks,

    Jason

    0Reply
  • David Dachtera
    Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
    6y
    Originally posted by @Casey Roman:

    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?

    How is your business's credit? Can you put the money into the business and let the business do the buying? 

    0Reply
  • Rosa Aponte
    Real Estate Broker · Fayetteville, NC · Member since 2020 · 11 posts · 3 votes
    6y

    @Casey Roman

    If you do seller financing they deed the property to you. Seller is only lender. If you default on the payment the seller can foreclose on the property. You should have your own contract with terms and the attorney can record it at the courthouse.

    1Reply
  • Mike Jackson
    Middletown, OH · Member since 2015 · 1 post · 0 votes
    6y

    @Casey Roman. I would move from that place like yesterday!

    0Reply
  • Chase Guelette
    Member since 2020 · 34 posts · 5 votes
    6y

    @Casey Roman You might look into investing out of state! I know that BiggerPockets has a book "Long-Distance Real Estate Investing", which might help you with your problem! Good luck!

    0Reply
  • Daniel M.
    Real Estate Investor · Houston, TX · Member since 2015 · 33 posts · 17 votes
    6y
    This may have been covered elsewhere in this long thread and I haven't done this myself but what about buying performing or non-performing notes - I am looking at that possibility this year - I am also not cut out to be a landlord and holding a note seems like you become the bank and don't have to worry so much about who is in the property and what they are doing - don't have to worry about maintenance, property tax bills, utility bills, etc. 
    0Reply
  • Daniel Guerra
    Investor · Greater Chicago Area and Northwest Indiana · Member since 2018 · 138 posts · 42 votes
    6y

    @Casey Roman Learn how to find off market deals. Yes, you will need to talk to 100 owners before getting that first deal. I have been hunting for deals all over Northwest Indiana and I'm absolutely getting them. Is it easy? Hell no. Listen to the latest Rookie podcast on finding deals. Read the Anson Young book on Finding and Funding Great Deals. You need to put the work in to find gold.

    0Reply
  • Casey Roman
    OP
    Member since 2018 · 26 posts · 34 votes
    6y
    Originally posted by @Todd Powell:

    @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

    Great feedback. I'm most worried that I am thinking too much "inside the box" which has me pounding my head against the bank's door when I should be nowhere near the bank. 

    0Reply
  • Casey Roman
    OP
    Member since 2018 · 26 posts · 34 votes
    6y
    Originally posted by @Brian Garlington:

    @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. 

    That's what I did and still do.

    When I put my toes into being a landlord I found that I was VERY hands on and, since I renovated the property, always worried that my tenants were actively destroying it. This is why I've been hesitant to try again (landlording) because I may be too neurotic. I had an easier time (mentally) flipping because once it was off my name...not my house, not my problem. That said, the margins are super slim now in this area. It seems like there's an overwhelming amount of advice to invest out of state. I understand the value there but if you already know how stressed out tenants in your own back yard make you...were you not having to fly back and forth regularly to deal with tenant issues? Check on the property? 

    1Reply
  • James Hamling
    Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
    6y
    Originally posted by @Casey Roman:

    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?

    Change markets, and financing strategy.....

    Different markets have different median home prices, and while on average median rents are in lock-step relation to those median home prices, it does present a challenge for point of entry. The simple solution, change markets to one where the point of entry better fits with your liquid capital. 

    Beyond that, my suggestion is to use a BRRR method in conjunction as done correctly, long term financing will be primarily qualified by the property equity and revenues itself. And/or you have been working with the wrong mortgage brokers/ banks, as one more savvy to a business client will better have options and abilities to understand your situation and if there is appropriate DTI they can make things happen, namely a portfolio lender. And I speak of this from 1st hand knowledge with similar struggles. In a way it's a good problem because it forces one to really get solid deals not just average or questionable, so it presses one to a higher level of quality in acquisitions.

    0Reply
  • Casey Roman
    OP
    Member since 2018 · 26 posts · 34 votes
    6y
    Originally posted by @Rosa Aponte:

    @Casey Roman

    Hi,

    You can use your money as private lending and grow it that way. I am a investor from the Fayetteville NC market. This is a military town , which means there’s always people moving in and out. I just purchased a prop for $39k and sold it for $99k. Make a profit of $38k in 90 days. If you would like to do private lending contact me. I’m also a Full Time active REALTOR since 2007. Very familiar with the market. :)

     Hi Rosa, 

    There has been such great feedback on here but what you just said is what has jumped out to me the most. If I can start a hard money lending business I can take the proceeds from that and buy the properties I want. I don't have a bank problem, I have an income problem. And, I think lending fits my personality more. I've always been curious about the Fayetteville market. I know some people who do quite well near Camp Lejune. Yet another opportunity I failed to see....this feedback has all been fantastic!

    0Reply
  • Chris Risi
    Real Estate Agent · Phoenix, AZ · Member since 2019 · 80 posts · 30 votes
    6y
    Originally posted by @Casey Roman:
    Originally posted by @Joseph Cacciapaglia:

    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. 

     Hey Casey, I currently live and work in California, but do a decent amount of investing in AZ, which is a great market for a bit less than CA. Would you be open to investing in AZ? I could help give you some tips, pointers, etc...

    0Reply
  • Liz Brumer-Smith
    Specialist · St. Petersburg, FL · Member since 2013 · 114 posts · 49 votes
    6y

    Totally agree with @George W. Look outside of your current market for other investment opportunities. $100K may not seem like much in your market, but it can buy you a valuable investment elsewhere. I've owned properties and mortgage notes in 13 different states, and have only seen a handful of them in person. Educate yourself on what it's like owning investment property of out your market and research the markets with the best opportunity currently. 

    0Reply
  • Terry Hale
    Real Estate Coach · Malibu, CA · Member since 2020 · 34 posts · 5 votes
    6y

    Have you considered investing into recession proof commercial property like self storage? 

    1Reply
  • Michael Wagner
    Specialist · Victor, NY · Member since 2013 · 823 posts · 844 votes
    6y

    I agree with @terry hale. Self Storage is ALWAYS attractive but even more so in times like the ones we are experiencing right now!

    1Reply
  • Alma Mills
    Real Estate Investor · Los Angeles, CA · Member since 2013 · 98 posts · 48 votes
    6y

    I understand your challenge, I live in an expensive market, I am also self employed. I have helped a friend who was in your same situation writing off lots on taxes. He was able to change his financial future by reducing the write offs and after a year or two he got a loan and bought his first house. It seems counter productive, but one year of paying more taxes may allow you to get 90% financing on a property. In my market, that could be easily $900,000 that a bank is giving you to invest in Real Estate. Way more than your gonna spend on taxes.

    Of course, you could also go to bridge lenders or hard money folks but if you want cheaper money it would be better to be able to qualify for traditional financing.

    0Reply
  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    6y
    Originally posted by @Casey Roman:

    My go-to idea was seller financing but the investors I know here are not overly optimistic about the idea because of what can happen if the seller decides not to sell after all or any judgements are placed on the property. We have MANY retirees here though...

    You lost me. If a seller does owner financing the title transfers to you as with any other mortgage, they can't decide to take it back later, nor would any of their judgments attach to the property. If you can't get conventional financing you need to find private money, HML or partner with someone better positioned where you are weak. Lenders are looking at risk, and the quality of a deal. The good news is, so cal has great appeal to lenders because it's one of the most solid markets in the country. Risk is mitigated through the deal, and what the borrower brings to the table as far as investment, experience, knowledge. Shore up what's weak.

    How many deals have you done in your lifetime? How much money have you borrowed and paid back? Ask yourself why should a lender trust you with their money? I have 30 years experience. In those years we've always done new construction. I ended up venturing out into a remodel in Sunriver. It came out beautifully. However; it took longer than expected as it had problems that weren't visible. It cost more than anticipated, and it didn't sell as the season is so short there, so I leased it for the winter thinking I'd put back on the market this Spring. Then... Covid 19. No STR allowed for this season. Luckily I'm able to lease it out for $2500 mo. on LTR until next year. Rather than marketing to a STR buyer wanting to do STR this year, I'll look for an investor wanting to buy a STR property and willing to position it for next years market. Actually mixing both STR and LTR is the best formula for Sunriver. The point being, sometimes things don't work out, and your lenders need to know you will stick it out and do what needs to be done to protect them.

    There are lenders that will loan on projects with what you have to work with as far as money. 

    0Reply
  • Kai Van Leuven
    Investor · USA · Member since 2015 · 325 posts · 447 votes
    6y

    @Casey Roman

    Why don’t you just pay taxes?

    0Reply
  • Terry Hale
    Real Estate Coach · Malibu, CA · Member since 2020 · 34 posts · 5 votes
    6y

    Hi @Casey Roman 

    I have the answer for you! Over the last 20 years and 400+ doors under my belt, being a trainer in commercial real estate space. With uncountable successful clients underneath me. Here's a way you should proceed. First off, there is no need for credit, you can get seller financing on a non recourse basis. Sellers will gladly carry the paper on all different property types, especially in times like this. How is this possible? There are two ways to buy properties suing my strategies. One way is all cash low ball offers. Second is for the seller to become the bank. I live in Malibu, CA, and we do not have the same opportunities here in our coastal town as others have in areas such as TX, FL, the Carolinas, GA etc etc. We do not landlord or manage properties ourselves, we hire professionals. And finding properties is easy these days.

    I have a wire transfer coming in today from a closing, you can do this business too. 

    0Reply
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