All Forum Posts by: Blaine Alger

If you are just getting started in RE, I don't know if I would jump right in to paying for a mentor. A lot of people think that paying for a mentor will be the easy way out and all of a sudden everything will click and they will be next weeks guest on the Bigger Pockets Podcast. That is not how this game works and you have to be realistic.

It is not easy to make it it in RE. There are many other easier ways to make a buck out there but we all see the value that RE can bring and thats why we are here. Will hiring a mentor make things easier? Most definitely, but is is still going to be hard. They are not going to be able to hold your hand through every little thing and you will still have to figure it out on your own. Even if you hire a mentor, you will still have to get out of your comfort zone and  take massive action in order to succeed. 

I would encourage you to dive in to the education side of things and see what you can get done on your own. There is so much valuable info out there for free on BP and Youtube University. Use these resources to build your base and then go out, take action on your own and learn from the school of hard knocks. Once you get to a point where you have the knowledge and the practical experience, then you can decide if a paid mentor would be the best route for you. 

You can also network with other investors in your market and let them know who you are, what you are trying to accomplish and see what value you can bring to them. If you bring them value they will return the favor and you will be able to get a inside look at the business. This is an alternative route compared with the paid mentor. 

Let me know if you have any other questions.

-BA

Here is my best advice given the information I have on hand.

I would say you could accomplish everything you want by refinancing. This will allow you to pull out your cash to move to the next venture while retaining ownership of the property and renting it out. I think it is a great strategy and it is how a lot of people get into the game by becoming an "accidental landlord".

Some things to consider:

-You will want to check the rental rates in the area and make sure you will be able to  cashflow with the higher mortgage payment and after accounting for your variable expenses (cap ex, maintenance/repairs, vacancy, property management, etc)

-Where will you live next? Chances are you will not be able to buy that same house for what you bought it for 2 years ago. So you will have to downgrade into something smaller or spend more money to get into something comparable. If you choose the latter, is it even worth it anymore? The increased cost of your new housing will probably offset the gain from your rental. I would encourage you to use the money from the refi and buy something below your means with an FHA 3.5% down. This will allow you to keep living expense comparable from before and allow you to realize the return from the rental.

Hope this helps. Let me know if you have any other questions.

-BA

I have seen they have been pushing RentRedi a lot on the podcasts lately and I fell victim to their marketing tactics and checked them out.

They seem to have fairly reasonable plans ($9/month for year plan) and offer a variety of features but I am still confused why someone would pay for property management software when there are so many free alternatives out there. 

I know Cozy and Avail are some of the favorites based upon some other research I have done on BP. They are free (or at least free up to a certain # of units) and offer  most of the same features  along with very friendly user interfaces for both tenant and landlord.  I just don't see a big enough difference between the RentRedi and all of the other free softwares to justify spending $9/month.

Long story short: Why should I use RentRedi compared to the free options out there? For those that have used it, how has your experience been?

Congrats on taking action and at least talking to the owner about selling the place. Most people out there would of not even made it that far. 

I don't think you are biting off more than you can chew. If you think about it, you probably know the property better than anyone since you have lived there and know how everything operates. That is probably the best due diligence you can get. 

Financing will be a little tricky given you will have to probably go get a commercial loan. So i would start by going to talk to a bank and seeing if they have any loan options for you.

I would also talk to the owner about owner financing and you might not even have to go to the bank. Sounds like he is just tired of being a landlord and doesn't necessarily need the cash. So if there is no need to cash out why take the tax hit of the capital gains? There are a lot of benefits of owner financing for both parties and it doesn't hurt to ask. Even if he is totally off put to owner financing, see if he would do some type of seller carry back to help you with the down payment and make it easier to get a bank loan.

Just a couple ideas. Let me know if you got any other questions. I would be glad to help.

-BA  

Depends on how cheap we are talking.

Option #1: On the cheap

-Get a google voice # with the local area code

-Pull data (owner name, property address and mailing address) of properties from your local property accessor website (CAD, GIS, etc). Each county will have their own operation and some will be better than other. If you aren't able to pull data efficiently from the county you will have to look into a data provider (list source, propstream, etc)

-Use the mailing address to skip trace the data individually with white pages (20/month for 100 look ups) or true people search (free). Look for the name that matches the owners and call them.

-This is by no means the easiest way to do it but if you are looking to save money this is one way to do it.

Option #2: If you got a little money to spend

-Get a one line dialer from Mojo ($90/month)

-Get a propstream account to pull data and niche lists ($99/month for 10,000 records)

-Run the data you pull thru a skip trace service. I use turbo skip but there are others out there. (.15 cents/record)

-Upload the skip traced data to your dialer and start calling

-Cold calling is not for everybody but it helps to get over fear of talking to people and builds your communication skills within the RE investment space. I think it is a great way for people to cut their teeth in the industry and get your feet wet.

Feel free to reach out if you got any other questions!

-BA

I am not the biggest fan of trying to invest in RE with little money. It can be done but when you are starting out, I think it is smart to have some reserves for when, not if, things go bad.

I would encourage you to go to a bank and just see what you can get pre-approved for. Even if they turn you away you can ask them what you would need to do in order to get approved. 

Owner finance is also a way to go but you have to find the right opportunity and know how to approach the conversation.

I wouldn't give up on self managing so quick.

There are a lot of property management software out there that are specifically for self managing landlords (Avail, Cozy, etc).

I know you still need handy man and other team members but I would not say it is impossible to build your own team to help you manage your own properties.

Check out doing an equity split.

Your dad will get a loan and bring the down payment and then yall split the cashflow but you use your cashflow to pay him back until yall are 50/50 in the down payment. From there, you can just keep the CF.

Check out this BP article, it gives a better rundown of the structure:

https://www.biggerpockets.com/...

-BA

Why are you calling agents?

Your best luck to get a wholesale deal is to market to off market properties and talk directly with the owner. 

It'll be tough to find wholesale deals on the MLS because the agents won't want to work with a wholesaler.

-BA

So FHA is out because you don't want to live there and you don't want to get involved with mortgage fraud. Here are a couple options:

-You could try to go to a small community bank that would be allow you to put 10-15% down. It would definitely be hard but not impossible. 

-Your other option would be to do an owner finance deal but you have to approach the conversation the right way and know how to explain the structure to the seller in a way that will make them feel comfortable. 

-Find someone who has the ability to get a loan and bring the downpayment and then yall split the cashflow. You will use your portion of the CF to pay back to your partner until you pay back your share of the downpayment and then it is a straight 50/50 split. Check out this forum post for more info:

https://www.biggerpockets.com/topics/879011

Let me know if you have any other questions.

-BA