What is your biggest roadblock right now in real estate investing

184 Replies

@Andrew Angerer

My biggest issue is finding anyone with money that wants to spend it in my area.

We have the potential and if I could fund it all I would but, it’s a small town and all of the money is being spent on the bigger city 45 minutes away.

So right now, I’m wholesailing in the bigger town with hopes to put the capital in to my town. It’s my hope to catch the attention of a bigger buyer/builder and light a flame of for my town, it deserves it.

@Julio Cabrera I think that at the end of the day, for all of us it's money/funds. It's really just a placeholder for time and value, so figuring out where you can make more by spending less (or spending others') is the simplest way of looking at it.

Money money and money.  If I had a bottomless checkbook I’d be able to get deals done daily.  But my network is lacking and I can’t fund the big deals alone.  

Time will help. But it’s a roadblock for now. 

@Frantz Joseph do you need accounting software or property management software, or both?

With 14 properties, I highly recommend you set up some accounting software (QuickBooks desktop would be a good choice if you have your properties set up as individual LLCs). It’ll make your analysis and metrics infinitely more useful and will also save you money come tax time.

Originally posted by @Emmena Ocegueda :

@Andrew Angerer

I’m having the same dilemma do you have any recommendations on any private lenders?

 Private lenders are ok, but the money is not cheap. Try with your local credit unions first, try everyone in your city, and try to get a line of credit. That will be cheaper than any loan you can get from a hard money lender. 

Best,

Andrew

Originally posted by @Edward C. :

@Andrew Angerer I live in Seattle area and my long term plan is OOS BRRRR. Right now I'm building capital to have enough for 6 month reserve (both personal as well as for rentals). Once the reserve number hits I'm good to move forward

 What OOS markets have you been looking at?

I've noticed that, for my clients and many others out there, that many people are focusing very heavily on getting the 'perfect first deal.'  It's always great when you think about it, of course, but if you ask any seasoned investor still in the game how their first deal was, I highly doubt that they can tell you that it was perfect by any stretch of the imagination and I'd be pretty willing to also say that they don't have it anymore.  Waiting for your version of perfection can usually lead to months and months or years of setback in the long-term.  

Standards are important and I'd never advise anyone to go through with a deal that they genuinely aren't comfortable with, but obsessing and spreadsheeting has killed a lot of deals for beginners that I've seen more experienced Buyers pick up and be excited about, with little-to-no issues.  It's all relative, I suppose and as they say: different strokes for different folks.

My biggest road block is locating a city that's going to ideal to brrrr.  In NJ and have been looking in Texas. Just don't know which town/city. Let me know if you can help me decide.

Knowing where to start..

Research:

I’m a newbie and doing research, attending webinars, reading audiobooks, browsing BiggerPockets, and looking at all the house apps.

Funding:

I’ve looked into conventional mortgages, HELOCS, personal loans, reviewed my personal cash, etc. to see where I stand. I have good credit and qualify for different options so that’s not an issue. I’m just not sure of what’s the best option for ME.

On the advice of a friend, I started an LLC but through research I realized I can't get these sources under my LLC and sounds like the "due on sale" clause could cause another issue.

Nonetheless, I see many properties of interest and not sure if I’m looking at a “deal”.

My plan is to get out and go look at what I’m seeing and the areas and maybe weed out the duds.

My largest obstacle is growing my network and raising private capital. I've been involved in apartment syndication as a limited partner for a while, and now I have the opportunity to be a general partner on a 122 unit class C apartment complex. Suddenly, I find myself in a situation where I've got a great deal but I need to raise a portion of the equity, $200K, to close the deal in the next month. So I'm attending real estate investment groups in the area and talking to people that I know about this deal, but I have a very short time to grow my network and get capital commitments from investors.

@LaKeya Smoot Hi LaKeya, your research was right. A transfer to an LLC will trigger the due on sale clause and should therefore be avoided, even though banks are hesitant to ever foreclose as long as the note is being paid. Despite the note being paid, the banks will still send threatening letters. The good news is this issue can be avoided completely by transferring the property into a land trust.

While a transfer to an LLC will cause alarms at the bank and prompt them to send you a letter, a transfer to a trust will not. A transfer to a trust is exempt from due on sale violations since banks will view transfers to a trust as an estate planning tool. You should not even receive a letter from the bank.

This article can explain the general process of taking a property into your own name and transferring it into the Land Trust before assigning it to the LLC. The added benefit of this process is that you can also have your attorney sign the public records as "Nominee Trustee" before assigning yourself as the "Trustee" once the Trust has been established. It means your name does not appear on public record for that property, your attorney and their address is the only thing that appears. All the while, you always have control and nobody else, not even your attorney, can manage or sell your property except for you.

If you need to prove ownership for financing or any other reason, you simple produce your company documents as well as your banking and accounting records. Since these disclosures are private, and not part of the public record, it does not violate the anonymity you’re seeking.

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