Bel Air, MD · Member since 2015 · 16 posts · 7 votes
Hello all-
I’m trying to turn this temporary setback into a positive opportunity.
I’ve recently and unexpectedly lost my job. Prior to losing my job, I acquired 2 homes and updated for rentals.
I’ve ‘lurked’ boards, read books and blogs but just haven’t been able to actually make a move beyond a personal traditional real estate purchase. I figured now might be the right time to find my guts but I keep asking myself if I can become an investor if I lost my job?
I do enjoy real estate and I’m curious if anyone else been in this situation? Thanks!
Hello @Elizabeth D., what a positive attitude you have, I have heard lot of people in BP podcast say they were fortunate enough to lose their job!!! you could be one of them in future. I think every real estate investor wants to be a full time guy because this is very enjoyable, there are lot of pros to being full time, here are some of the cons you should address
1) Finding the deals - As long as you are a passive investor if the math works even a 100$ cash flow a month is okay on the side, you can buy your properties from MLS but when u are a full time investor you need a lot more cash flow and lot better deals.
2) Sourcing Finance - Banks look for W2s when you ask for money, you should be lot more creative and risky as a full time professional to source funding.
3) Market Cycle and Current Market - Markets will cycle and as much as I know most areas are turning into sellers market with low supplies, how do you tackle that?
It all depends upon our personal situation and where you are in your life, I don't mean to discourage you with my concerns above, just a full analysis of what is best should work in your favor whatever decision you make, good luck.
The 800 pound Gorilla in the room is the "Financing."
Your ability to avoid sinking too much of your capital into Dead Equity by obtaining mortgage loans...without a job, will be key.
Now, if you're one of those who are listening to 1994 Carlton Sheets cassettes, with no money in the bank, bad credit, living with mom and dad, but just a desire to purchase, then stop wasting your time and concentrate on finding a job.
However, if you have 25% to put down with at lease 5% left over after closing in "reserves" and decent credit, you're in business, even without a job.
If this is the case, do as I advise and open an LLC today. BUT make sure you include one or both of these words in the name of the LLC
Rentals
Properties
There are some very important reasons and benefits for doing this, so just do it.
Thanks! My thoughts were to use the 2 existing rentals that I have in my personal name to get funding for my existing llc. I’ve come across a couple properties that have flip/wholesale potential but they would need to go through non traditional financing. Since I’ve only gone the traditional financing route, I get hung up on other (creative) lending options. So I guess that’s where I need help is learning more about private lenders. I feel like if I can lineup a good lending option, that would help. I also need to get a better understanding of wholesaling and it’s tough to get that hands on experience.
Thanks Steve! I opened an llc 2 years ago, my current properties were done in my personal name. I would be able to fund at 25% down with a 5% reserve. Are there any specific funding programs you think I should look at so I can be in biz?