All Forum Posts by: Scott E.

It varies so much. I've had wholesalers bring me deals where the margins are razor thin and they're willing to flip the contract for $3,000 just to get the deal done.

The biggest "fee" I've ever paid a wholesaler was $100k. Meaning I paid $100k more than their contract price. But I didn't care how much money they made. Why? Because the numbers still made sense for me at the price I paid.

Call a couple of loan officers who do DSCR loans. I've been shopping a DSCR loan on one of my flip deals and I was surprised to learn that their guidelines vary quite a bit.

Some will do a loan where the projected rent is LESS THAN the mortgage payment (which seems crazy to me)

I found another who will lend based on AirDNA projected gross revenue for a short term rental (which also seems crazy to me)

You're probably right on your last point. I don't know any lender who will allow you to do 100% CLTV financing with the seller carrying the 2nd note.

I agree with everything that @Joe Villeneuve said but before committing to sell there are a few things to consider...

1. What do you forecast the rent growth to be in the area? How long will it take with you raising rents every year before this property will turn cash flow positive? (probably a long time, but something to consider)

2. What do you forecast the appreciation rate to be in the area? Condos generally don't appreciate as fast as single family homes. But this is something else you should be thinking about.

3. Are you currently paying mortgage insurance which is eligible to "fall off" at some point? You say you're a first time buyer. I'm assuming you used FHA or put less than 20% down.

Selling might be the best option, but I'd hate to see you lose that 2.75% leverage. We will probably never see rates that low again in our lifetime.

Loan terms might look something like this, which would all be outlined in the contract/note:

Loan Amount: $100,000

Interest Rate: 8.5%

Payment Structure: Interest Only

Balloon: 3 years

Monthly Payment: $708.33

Prepayment Penalty: N/A

Collateral: Investment Property

It's a fine question. And to answer your question, you can bring a cash buyer as many deals per month as they can handle. I'm a cash buyer, but I tell my wholesalers that I'm only looking to do around 2-3 deals at a time. 

And regarding how many cash buyers you should have - find as many as you can. Keep an organized list of your buyers, what they are looking for, where they are looking, etc. Check in with these buyers every month or so to see if they're still buying or if their business plan has changed.

Constructive criticism - Work on your writing. If I had a wholesaler send me a long run-on sentence like this I would quickly unsubscribe from their list and move the email to the trash folder.

Nice job man.. what an impressive accomplishment.

You worked 15 years to get to this $1,000,000 nest egg. So my input is that you should think long and hard on how you will deploy this money and grow it for the next 15 years. Don't be in any rush to do a bunch of deals. Take it slow for a couple of years, do 1 or 2 deals at a time.

If I were in your shoes I'd look at spending around half of this money on a steady cash flow apartment complex or commercial property in an 'A' location with around 50% leverage. Then I'd use the other half for my active investments (flips).

Welcome to the forums Shaleaha!

I'm sorry to break it to you but if you've been studying since Feb 2022 and you still have not taken action, you are officially stuck in what's known as "analysis paralysis"

It's very important to start with getting educated through books, podcasts, forums, networking. But eventually you need to rip off the bandaid and do your first deal.

Now full disclosure - This exact moment in time happens to be a bit of a sketchy time to get into real estate. But there are motivated sellers out there and there are definitely deals to be had.

I recommend you revise your business plan to this: Stop reading, stop researching, and buy a property by XX/XX/2023.

Tell your agent what you're looking for. Start touring properties. Start underwriting deals. And start making offers. If you have ANY questions along the way, you can bring them here to the forum and we'll help you out.

Not sure where you're coming up with this arbitrary 70% of asking price approach? Sounds like something you'd hear from a fake guru on YouTube. Not practical in real life.

You need to underwrite this deal.

1. Calculate the as-is-value based on comps. 

2. Calculate the after-repair-value based on comps. 

3. Determine what your cash investors would be willing to pay.

4. Add your fee to what your cash investors would be willing to pay.

5. Make the offer.

Year 1: Nothing. Put it away, carry on business as usual. I'd want to let this weird market pick a direction and give interest rates some time to tick back down a bit.

Year 2: Start looking for value add commercial deals in A++ locations. Pick up a distressed office building or retail plaza, renovate, place tenants, and collect the rent.

Oh I know Ciento well! My wife lived there when we first met. She still does property management on a few units in Ciento for an out of state landlord. Great location. But definitely some deferred maintenance around the complex.