All Forum Posts by: Dan Beaulieu

I'd consider other markets that you don't have family in also. Is your somehow an expert at property management? I'd honestly leave them entirely out of the picture. This is YOUR journey to financial freedom. Just speaking from personal experience...my family could not give two ***** about my properties. As long as I show up for Christmas they are good :) 

When considering investing out of state, your single most important team member is your property manager. A great one would have the ability to give you insight on specific neighborhoods for properties you're considering, and even manage any renovations for you in a relatively turn key fashion. Normally operations with over 500+ doors UM will have these procedures in place. 

@Nick Gober-Keller mentioned Knoxville and that is certainly a great market along with other areas in East TN. Not many small multifam properties in Knoxville though. Chattanooga on the other hand has a TON of duplexes. You can put 20% down on a turn key one right now but keep in mind you will most likely have negative cash flow until rates come down. Another option would be to buy using hard money or private money and lightly renovate something and then refinance out. If the deal is good enough, you could even have 0 down with the right lender. 50K will go a long way if you're doing some BRRR deals like this on small multis.

Best of luck! 

Hey Investors, I'm deeply saddened by the recent onslaught of generic posts written by ChatGPT. I owe these forums 99% credit for the success that I've had in real estate over the past 7 years, mostly because of the original ideas that come from the investors' personal experiences fighting in the trenches. Lets not let generic AI posts take over the forums.

Can we all agree to stay human on here? 

Would love to hear everybody else's thoughts on this. 

The return on investment for putting more down would just be equal to the interest rate of the loan. Let's say it is 7%. So it would be like investing your money at 7% with very little risk. We'd have to consider what other investments he could put his money into which would earn north of 7%. Factoring potentially higher risk, he would have to invest his money and get north of 10% ROI to make these two paths equal. I did 0 actual math on this, but my gut tells me that I'd need to earn an extra 3% to take on any additional risk in an investment.

@Mark Douglas if you have the time, resources, capital, and patience for value add real estate investing that will be the best return on your money in the REI space. If you're not confident that you could do this, then perhaps putting more down might actually not be a terrible idea considering the current interest rate environment. I discussed this recently with the legendary J Scott when we were on a coaching call, and he himself advised me to throw my extra cash at my mortgage right now due to where the rate is at, and I mostly agree...but mostly because I've been doing most deals recently with 0 out of my own pocket.

No comparables? where are you looking for properties? 

Properties that are in tiny towns and rural often are impossible to find good comps for. These gems will have Higher days on market, no contractors or easy access to supplies. 

If there really are no comps, skip it. that's an immediate red flag. The person who buys this property from you eventually will also have no comps and therefor the appraisal value could vary drastically from what you were expecting. 

With that said, Sometimes we lend on properties that are a little bit out there. I've seen an appraiser use comps as far as 12 miles out, which is crazy to me. So for your sake, I'd just go a little bit further out and look for properties in similar condition, age, and size. 

But again, if it is indeed too rural, I'd skip that deal all together.

Hi there. I'm a HML and rehabber in Tennessee so I figured I'd Chime in. There have been some pretty solid responses here so far but I'll add my two cents.

We really need to set the expectations here...It's easy to get caught up in the hype of real estate investing when you're starting out. The real truth is, you'll want to have some capital. Inadequate cash reserves are the #1 reason flippers and brrrr investors fail. 

We lend to brand new investors like yourself all the time. They have to have cash reserves, and a great deal. If they have those 2 things, you're very likely to be successful. 

If you came across a 70% of ARV deal that had to close in 1 week, and there was going to be 75K in equity, would you rather pay about $10,000 in interest to a hard money lender, or would you pass on the deal because that seems too "dangerous." You see, it's a very useful tool that has it's place in real estate investing. But you have to have a good deal, and some cash reserves.

Your first real estate deal should indeed be a house hack. Save up 20K to have a small down payment and a little bit in reserves. 

Then, after you've accomplished that, Increase your income, save, and eventually you'll be able to work with a HML on good deals in a fruitful partnership

 What are you looking for exactly and what are your goals? Be specific. Put it out into the universe and it may just manifest into something awesome

How I am financing the 3 houses that I am closing on next week: 

House 1: Local bank 2 year interest only loan at 5.75% with 20% down, no appraisal. Using a private lender to fund the down payment and they will be in second position. I will immediately refinance them out, and even get a little cash back since it's such an awesome deal. Gotta love getting paid to buy a house! 

House 2: Private investor (college friend.) He opted to go for the equity option rather than the debt option for potentially higher returns. This is fine for me, since it limits downside risk even though I will give up more profits. He is funding the entire purchase price and closing costs, and he will get 25% of the profits on the back end. 

House 3: hard money lender - 100% financing. Goal is to take the property down quickly, clean it up, and put it back on the market for a quick wholetail.

What can be taken from this post is that every single deal is unique and how you finance it should depend on timeline, your goals, and your exit strategy. It's important to have multiple options in your back pocket for when you come across great deals. 

 Love this. I get calls all the time from investors wanting to make the switch over to fast easy money for funding the acquisition, and leverage their capital and scale a lot quicker. I think people have a hang up about hard money at first before they realize it is a valuable tool. 

do you work at Hopkins? 

Having done many out of state deals, I can say it is a pretty decent time commitment to analyze / rehab etc. for this reason, Physicians are usually better off doing syndications. There are sooo many syndicators out there, but 99% of them haven’t weathered a recession. Do your due diligence on the operator as that is the most important thing. 

If you want to own smaller properties, the best person on your team is your property manager. A good one will have in house contractors to manage the repairs for you so it’s a little more turn key, and they will make sure you’re buying in the right areas.  

Why invest out of state? I was thinking Baltimore was a good rental market for cash flow but could be way off