All Forum Posts by: Aaron Junck

Thats great @Patrick Snyder ! Thanks for chiming in on why you invest. :)

Best of luck!

I come to think a lot of why people want to invest, particularly in RE.

I have "worked actively" since I was very young with selling candy on the bus to working at a carwash when I was legally able to, to building a couple businesses from the ground up. Its all the same. Go to work and do a J.O.B.

So I will tell you why I currently invest in real estate and plan to in a great magnitude. ---> Freedom. I want to get systems in place and to minimize my actual hands on and babysitting of other that go with an actual JOB.

I want to get to the point in the next few years (under 3) that I have the luxury, if I want, to surprise my son and pick him up from school.

To be able to go back to Maui for a few weeks if I wish.

To help other motivate and guide others that have no idea that they dont have to bust their butts from sun up to sun down just to get a paycheck and make it to the next.

To spend time with family even if it is sitting at the table and playing a card game.

I could go on forever, my point is my reason is to be able to enjoy life before it is gone.

What is your reason why you invest in Real Estate?

Hit the tab above for "analysis" there is a deal analysis form that may work for a template.

@Brie Schmidt As far as sub to? Lease option and Contract for deed?

Sub To is where you get the deed transferred to your name and the owner still keeps the mortgage debt in their name. Without going into crazy details on this I would say listen to Podcast #2 with Karen. I personally wouldn't do this unless you are going to flip a property or only hold it for a short period of time. AKA not for long term buy and hold. The reason being is that by doing this you trigger a due on sale. Right now it doesn't sound like due on sale clauses are being executed as long as the mortgage is being paid. However, when rates rise lenders might start calling more due.

Lease Option is where you lease a property with the option to purchase it down the road for a set price.

Contract for deed is you are purchasing from the owner that owns the property free and clear.

All of these topics are discussed in great detail here on BP and can be found by typing any of these in the search box above. Let me know if you have more questions :)

Great advice from @Brie Schmidt here as far as the lending requirements. These are the same that I run into.

There are many ways to finance other than conventional. Sub to, Lease/option, CFD. etc are the most common ones you see.

Another way to come up with the money is have a partner cough up part of the money. If your paying retail for the property it doesn't make much sense to do this IMO. But if your getting a deal on it you can make it work.

Another route by not using up your cash is to take out a loan from your 401k if you have one. Which typically has to be repaid within 5 years I believe. You could also refiance or do a Heloc from your personal residence but keep in mind this will affect your DTI and may make it harder to qualify conventionally.

I agree with what everyone has stated above. The furnace, a/c, roof etc. are part of the owner of the property responsibility.

Whether or not it is legal, I'm sure Bill will enlighten me :), In my L/O I did a longer term lease for the gentleman bc at the time he was going through divorce and also bankruptcy from the divorce. Due to that reason I put in the agreement that the appliances are on the property for free use and any repairs are the responsibility of the tenant. I explained this to the tenant/buyer and he was ok with that. In the past year he didnt like how the existing dryer was drying and that it took to long to dry things (electric dryer). He wanted to put a new one in I told him that he could ---> he did. So far so good.

Oh and btw I definitely agree with a comment Bill Gulley when he said that dont apply any part of the rent to the purchase. Believe it or not this is one of the points a "Guru" said at a class years ago when I went to one .

I have never owned one ,but growing up my relatives did and still to this day do. What they did was develop the entire course and then also developed the land around it and built homes for retired people and also built "parks" around it as well. Over all a huge project but they have done amazingly well for themselves and their family.

My dad told me that they purchased the land dirt cheap. I guess that would help lol.

I agree with @Elizabeth Colegrove that if the property is positively cashflowing I would hold it. If the neighborhood is turning to crap and is not recovering I would consider selling. if it just looks like some recent issues that are not long term problems I would keep it and wait for the market to recover instead of taking a loss.

There are tons of discussions on here about this.

Valid points are the odds of due on sale clauses that will be called will likely go up when interest rates go up.

Also a HUGE issue is the SAFE ACT and Dodd Frank. A lot of talk going on on BP about all 3 and how they will affect us investors.

Podcast #2 with Karen Rittenhouse is a great one on sub to deals. If you chat with her now she states that she no longer purchases that way. :(

IMO if your going to do a flip and you can do it via sub to then go ahead and do it if the flip from start to sale date is going to be 6 months or less. If your plan is to buy and hold you should be ready and able to payoff the loan if it gets called.

If I was in your shoes I would definitely be trying to do this...

I would think who out there in my area has done this kind of thing before and then when you have the land tied up ask them to partner with you on it.. yeah it will be less profit for you but if they walk you through the whole process and you still make a good chunk of change whats wrong with that?

Either that or be sure to hire a really good team and stay on top of everything all the time.