All Forum Posts by: Andrew Angerer

@Adrian Wade Great question. There are many ways, either using your own money or other people's money.

If you want to use your own; get a HELOC on your house and use it's equity for your advantage. You can take out FHA loans if you have low credit ( you need to live in it). Or take out a traditional mortgage, but keep in mind for these banks typically don't like you to use their money for a fix and flip.

If you want to use other people's money, there are two ways, hard money or soft money. Hard money lenders are typically people that will lend you money at a high interest rate, and have the assumption that you will pay it back very soon. This option is expensive in addition to the high interest rate, but is available to almost everyone. Soft money, can be from family members or people you meet that are looking to park their cash in a great investment vehicle. You want to find older professionals or people that simply have money but no time to invest. Convince these people that you can further their money, safely via real estate. Typically these people don't currently have money invested, and may need some encouragement. Not everyone knows people in this situation and/or may feel awkward asking people for this investment. Just keep in mind that you need to tell them that you are making a win win deal where everyone gets ahead. They provide the money, and you provide the work.

Hope this helps!

Friends,

 I love using spreadsheets and I have made a list of what I need to do from now until I have a rental in my name.  If you would be so kind to view it and pick it apart and tell me what should go where, what I am missing and so forth. If you are a super newbie, feel free to use it for your own use. 

I appreciate any input and I will gladly return your favor in kind. 

https://docs.google.com/spreadsheets/d/1bD3FDQ-2m3...

Best,

Andrew

You sound like a man with a good plan. I would say go for it.

Interesting question, I have no experience in this field, however if your area has seen growth in trailer demand I would look into it since there may be more demand for trailer parks, if not, you would be fighting an uphill battle just to get people in.

It also may be quite a bit of upfront money to get the land and sewer connections, which depending on the distance from the city sewer line can be tens of thousands of dollars.

Hi Mike,

  Typically tenants pay for all utilities, except for a few rare cases where you will pay for the water. However it is really up to you and what you can have the renter pay for. Just keep in mind, whatever they do not have to pay for they will use to excess and you will have to pay in the long run. I hope all goes will for your first property!

Best,

Andrew

I would not recommend building unless you have a ton of experience. Additionally VA and FHA loans probably won't pay for new construction.

What you should do, is find a C+ or B- class duplex or quadplex, live in one part of it and rent out the other units. This way you can still use a FHA loan (they only lend to people for their primary living residence) and the other tenants will more than pay for your costs to live there.

Always try to find properties that are messy, or cosmetically ugly, but in good shape regarding the roof, foundation and pluming. That way for little money, you can greatly improve the curb appeal of the house and justify raising rents on the property, adding more to your income.

Let me know if you have any more questions

It has been said on here before, fire bad help immediately and you will save so much head ache. If their communication skills are lacking then they do not have your best interest in mind and will not work in your favor, but rather for their own income. 

However, it is completely fine to have another real estate agent represent you, and if you are confused I would highly recommend it, or be blindsided by something you would have never thought about, and have to pay thousands more than you should have. The cost of good help is always worth it, just go onto facebook, ask your friends who they recommend for a good real estate agent, pick 5 and interview them. Try to find someone who also invests in property, that way they have your best interests in mind. 

You do not become rich on your first deal, so do not worry about an extra fee here or there for good representation, think about the long term and try to build up a network of great pro's that have your side. Treat them right and they will have your side and bring you more deals in the future.

All the best,

Andrew

While it has been said on here many times that you don't become rich on your first deal. Think of it this way, can you find a better place to live in for what you would have to pay to live in your investment, minus the tenants income? If there are no places that are as cheap as that, then it is a good idea to live in the one half  while your tenant "subsidies" your living costs. 

For example, I rented out a room in my SFH, but the tenant only paid enough for the mortgage plus some utilities. However, I only paid around 25$ a month on my end. Where on earth can you find a nice place to live for 25$?? Granted I didn't become rich on this ordeal, and I did find a few ways to increase the rent to even it out.

I would say as long as you aren't losing a ton of money, it should be a good idea. Just always look for ways to value add the property, and do not be afraid in this market to ask for a little bit more on rents, you may just get lucky.

Hope this helps,

Andrew

Looks like you are paying for the entire property up front, which has its pro's and con's, and depending on your situation may favor you. Obviously you will have no mortgage to pay, which helps with cashflow right off the bat, however you have a ton of money tied into the deal, which may prevent you from growing at a rate that you want to. However if your goal is to have 2 or 3 really good cashflowing properties then this is the route you should take. Also keep in mind, with having this much of your own money invested, it may be a good idea to invest in a good umbrella insurance policy on the property. 

Also, based on your construction, you have budgeted enough money for one worker, 8 hours a day, for 20 days a month for the six months you have allotted.  If this is the route you are going, you will need to at least, double your construction costs.  However, if you are a DIY guy, you may be ok within a few thousand dollars (granted I do not know the SOW)

Just double check your comps that this property will be valued for what you think it will, and just remember that the hard part with BRRRR method is keeping good tenants!

All the best!

Depends on the architect, but I honestly have never had to work with one. I would assume a few weeks, but if they are busy then they may put your work off to the side for a while. A friendly email reminder may help.