All Forum Posts by: Ben Morand

@Isaac Agbolosoo Nice! How did you finance the deal? Was it a fixer-upper?

@Isaac Agbolosoo That’s awesome Isaac! Thanks so much for your insight. If you don’t mind me asking, when and how were you able to land your first deal?

@Joe Villeneuve Thank you for your insight. In terms of my location, I currently reside in Orlando and the market has been very strong for buy & hold investor's in recent years due to the high rents in comparison with property prices (very often times satisfying the 1% rule). Also, around the UCF area, I have been recommended by several experienced investors because it is growing/developing very fast. In terms of my criteria, I am looking for a SFR because along with large apartment complex's, they are what is most available for deals in my market. Smaller, non-commercial multi-family properties are not common in Orlando, making them very very competitive and hard to strike a worthwhile deal. I want 3-4 beds due to the fact that it is easier to rent given the type of tenants that I am looking for. Also, as an alternative exit strategy, it is easier to sell a house with 3-4 rooms than 2. In terms of my pricing strategy, it is based on the 70% rule in hand with the market values of properties in the neighborhoods that I am looking to buy in, with comparable aspects to my searching criteria (the comps tend to hover around $350,000 ARV). In terms of my overall strategy, I have researched various asset classes such as large commercial multifamily investing, MHP investing, self-storage investing, AirBnb rentals, etc. as well as a few different financing strategies including syndication (which interested me a bit, but I'd prefer to own my properties outright), private money (which unfortunately I don't have any connections in this area yet), etc. but I landed on BRRRR investing in SFR's because it allows me own properties outright while still utilizing OPM (which is so essential for growing your portfolio at a decent rate). Also, it brings to the table a level of scalability when you bring in acquisition managers, property managers, project managers, VA's, various paid market techniques, etc., that can allow you to take on more projects as you grow with your business. Lastly, while I definitely agree with your points on having more capital up front to handle various costs in regards to the HML and unforeseen circumstances, I disagree with the fact that you shouldn't learn on the go (especially being young and taking on only one project). I have spent the last 6 months educating myself for hours on end, networking, reading books, learning market analysis, deal analysis, etc., so I understand the risk involved, and I have learned so much of what I need to know, but I do feel that I could have provided more information about my real estate education on my post than I did.

Overall, I really appreciate you taking the time to give your insight on my post. In the end of the day, I do need to take my personal cash reserves into account more before taking on a project. It might be a few months before I am actually able to hop into the industry but I am a strong believer that action always speaks louder than words, and if I don’t make a point to get started, it will never happen.

Again, thank you so much for your advice, it really helps a lot!

Hey guys! My name is Ben Morand and I’m a 20 year old college student at the University of Florida. Over the past several months I have taken all the action I feel I could’ve taken in terms of growing my real estate knowledge base. I took my real estate agent pre-licensing course (and am planning on taking the exam mid-August after my summer classes), read countless BP books by Brandon Turner, J Scott, David Greene, etc., listened to HOURS of the BP podcast, posted nearly 100 times on the forums, and connected with several people in the industry, chatting through the forums and over phone.

Since I started my journey, my biggest motivator has been to just go for it: educate myself, take action now, and figure it out as I go. For the first time, I finally feel ready to jump into my first deal and get my portfolio moving. I would like to use the BRRRR strategy to acquire a SFR with virtually no money out of my own pocket. My criteria goes as follows:

- SFR

- minimum 3+ beds

- minimum 1+ baths

- No pool

- A or B class neighborhood

- Orlando Market

- Purchase price: max $250,000

- Price + rehab: max 70% of ARV

- Moderate rehab: avoid any with extreme fixes

- (post-refi 25% kept in equity): 15% minimum CoC return from that "down payment"

In terms of my current situation, I have a 751 credit score and about $4,000 in cash reserves. As a college student, I have no source of steady income yet, but my parents have agreed to co-sign until I can refi them out later down the line (to help me get started now).

My questions are:

1) I know it won't be an easy task finding one to match such terms, but is it possible that I will be able to obtain a HML to cover my costs, seeing that I have no prior experience and very little money to fund a down payment/points without sucking up my cash reserves? I am fine with using my cash reserves for the project, but I will need them to pay off the HML interest payments until I can have it rent ready and tenants paying each month.

2) With this in mind, do you think I'd be able to hop into my first deal soon? I have started my search primarily in bank-owned REO's, but I also plan to post ads on Craigslist and FB marketplace. I have been studying and learning all I can over the past few months, and I finally feel ready to push forward and escape any threat of analysis paralysis.

Thanks everyone for the help! I am open to any and all advice, and also would love to connect if anyone would be interested in chatting further!

@Eric Martin That's awesome man! Right now I am in search for my first BRRRR deal. How was the process of obtaining a HML without any prior experience under your belt? By any chance, were you able to obtain the HML with no down payment or did you have a good chunk of initial capital for that?

@Nakia Cooper David Greene wrote a book on investing out of state. May be worth a read. J Scott also has some outstanding books on flipping houses if that is for sure what you’d like to do.

@Nakia Cooper Would you be okay with simply moving to another state that you’d like to work in? Potentially you could house hack in a new market. This is a great way to learn the ropes in regard to rehabbing without having such strict deadlines. Also, you’d be able to utilize better lending strategies since it would be owner-occupied.

While it is possible to flip from a distance, it would be very hard, especially for a beginner.

@Rob Daniels Hey Rob! There are a few options you could take. There is a special class of the FHA loan called FHA 203k. Basically, with this loan, the bank will loan you the money for the property and the rehab (lumped into a single mortgage). This loan is not offered by all banks so you might have to ask around, and it also can be a lengthy process full of paperwork, but you will be able to get yourself into a property for 3.5% down. Note, however, that you'd have to live in it for a year to fulfill the FHA requirements of being "owner occupied".

Another option if you are seriously looking to flip is hard money, but I’d do some research on the process before hopping into anything because it is definitely not perfect. High rates, short terms, and points to pay up front. However, they are not very hard to obtain so if used properly, they can be a crucial tool in your endeavors.

Lastly, another common type of loan is through private money. Private money basically just comes from any wealthy person looking to invest in you. While private money lenders generally do provide better rates than hard money lenders, you have to know someone willing to do it. It could really be anyone. Your friends, relatives, dentist, etc. It might be hard, however, to get someone to trust you with tens of thousands of dollars when you have no successes under your belt yet.

If you have some time, I recommend that you read a few books before hopping into anything:

1) The Book on Flipping Houses by J Scott

2) The Book on Estimating Rehab Costs by J Scott

3) The Book on Investing in Real Estate With No (and Low) Money Down by Brandon Turner

These 3 books should give you a solid foundation to start your journey. Take your time and learn what you can.

Good luck man!! PM me if you have any additional questions.

@Hayden Russell Hey Hayden! It’s awesome to hear that you’d like to escape the 9-5. I have a few points to make about your question.

First off, it is so important that you figure out where exactly you'd like to focus your efforts in real estate. So many people want to do it all, and as a beginner, that's simply not going to work. A few ideas to look into: starting with a house hack, BRRRR investing on non-commercial properties, mobile home park investing, large multifamily property investing, self storage investing, wholesaling, flipping, becoming an agent part-time, etc. It's so important to have "crystal clear criteria" as Brandon Turner always says. Maybe do some research on each of those areas of real estate investing and pick one (or another one if you find something else you like) and stick with it.

Next, I think it is soooo important to get educated. The BP blogs and podcasts are a great way to start and also to stay motivated. Along with these, some awesome books to read: The Book on Rental Property Investing, The Book on Investing in Real Estate With No (and Low) Money Down, The Book on Managing Rental Properties, The Book on Flipping Houses, The Book on Estimating Rehab Costs, The Book on Negotiating Real Estate, BRRRR (by David Greene), etc.

While taking direct action is a great way to learn as you go, it is so important to make sure you educate yourself first. For example, you mentioned financing a deal with Hard Money. While this method is an awesome way obtain a hefty loan with very few requirements, it is not perfect for every situation. This sort of loan is primarily used by house flippers and BRRRR investors due to the fact that it carries a very short lending term and has very high interest rates in comparison with conventional mortgages. House flippers and BRRRR investors typically utilize this type of loan because they know that they can either sell the house and pay the lender back or use a cash out refinance to do the same, while still maintaining equity in the property.

Next, while it is probably not the exact answer you are looking for, I think you should probably work on building up some cash reserves as well as a solid credit score before getting into buy & hold investing. However, there are some other types of real estate that you can use to gain experience and build capital such as wholesaling, flipping, and working as an agent.

Also, while you are building your cash reserves and credit score, definitely consider networking... a TON! Go to meetups, post more forums, connect with BP members, schedule calls, etc. The more people you know, the better!

Lastly, take some time to analyze deals. If you can pick a strategy and analyze 10 deals per day, by the time you have your finances in place to go forward on your first deal, you’ll be a deal analyzing expert!

Wow, that was a long answer to your question haha! Hope it helped! If you have any questions or just want to chat about real estate in general, feel free to shoot me a PM!

Good luck man!

@Jordan Mummau Jordan, thank you so much for your insight!! That is incredible that you were able to achieve that million dollar net worth benchmark by age 30. That is definitely something I’d like to achieve as well, and I’m SURE it did not come easily, but it’s gotta be well worth worth it!