What's the best approach for a newbie's first deal?

8 Replies

Hello :)

I have a client who will be retiring this year and would like to invest into a small apartment building to obtain retirement income.  She has been on the job quite a while, credit not perfect but fair, planning to use her 401K for the purchase -- no experience and she does not currently own a home.  Conventional? Hard Money? Creative Financing?

Thanks for the feedback!


@Detra Harris  

is your client will be taking distribution from the 401k and then investing in her own name or is she planning on buying in her 401k?

If she plans on buying in her retirement account, then she needs to set up self-directed IRA or 401k first, transfer the funds in there via Direct Rollover and then purchase in the name of her IRA or 401k.

When it comes to financing of investment property in a retirement account, only non-recourse loan can be used (conventional loan will not work since providing personal guarantee is not allowed). There is a handful of national non-recourse lenders that I can provide you list of who could help. Also, private money can be utilized but it will cost you significantly more.

Hope this helps.  

I would ease her into a already rehab'ed project that is currently producing income and place it with a Property Management company. There are good B rentals that can spin off double digit returns and she can be passive.

@Dmitriy Fomichenko  

 I'm interested in pursuing something like this as well. Could I get that list of non-recourse lenders as well?


Any experience running an apartment building? What is considered small?

Originally posted by @Brian Huber :

@Dmitriy Fomichenko 

 I'm interested in pursuing something like this as well. Could I get that list of non-recourse lenders as well?

 Sure, I'll send you the link in a private message.

Thank you for the quick responses.  Dmitriy, please send me the link as well.  Good stuff!! She will be taking a distribution.  I am seeking 2 - 4 units for her.  I think that will be a good start -- any thoughts? Umm . . thanks for the feedback John.  Alberto,  she has no experience with property management. I offer property management services.  I have 25 years of experience in that area and will provide the service as an option.

I sure would love to see you get into a property to live in? Is there any way to get your client to buy a multi-unit and live in one of the units so at least your client's overhead is fixed? 

Hi Aaron,  thanks for the communication.  I don't think my client wants to live on site and take on tenant matters, however,  I will ask.  Thanks!

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.