All Forum Posts by: Carlos Valencia

Hello William, 

When it comes to flipping properties Hard money is the best option and maybe a 203k loan which is a rehab type loan but its owner occupied. Hard money is best to use in order to win the deal. For hard money loans they only look at your credit score and assets and the property to in regards to purchase price plus repair cost and look for the after repair value. If the Hard money lender thinks the deal is profitable they will most likely fund it. You will also need to bring in 25% down and have 6 to 12 months reserves. If you are a new investor the interest rates will be in 13s and its only interest only payment, but once you start gaining experience then the hard money lender will give you better terms assuming your previous projects were good projects. Just make sure you inform yourself on how hard money works for flipping and be ready to move fast on your project as you will have limited time to finish your project before the note is due. 

@Albert Bui @Matthew Kwan

 Hi Yang, 

Flipping is a completely different investing strategy and it wont help you learn about buying and holding. I mentioned flipping if you were looking to see what investing strategy has the higher likely hood of actually making being profitable in this market. Because our area is super expensive to cash flow from buy and hold I see many investors doing flips and mid term rentals as well like air bnb or leases under 1 year. It sounds like your goal is for long term so I would say look for areas where you know appreciation will most likely increase over the years like in our area and just know that your buying it for long term and accept the fact that cash flow wont be an option until maybe in the distant future as the market hopefully improves in rates and rents increase a bit. Again I would say go the house hack method and put in as little as possible so you can continue buying more at least once every year and also use some of that money to rehab and increase the properties value. 

Hello Aaron, 

Welcome to the BP world. Some things to consider when looking into multifamily is to purchase as owner occupied also called House Hacking. This allows you to purchase with 3.5% -5% down allowing you keep most of your money reserves. This strategy is also the best way to get into real estate investing with low risk. You will have a place to live and have other people pay down your mortgage. You may even end up living for free or at the very least pay very little of your mortgage compared to if you went out and rented an apartment. First thing is to get pre approved with a lender to see how much you can qualify. Now the great thing is that you can also use the other units rents to help qualify if your coming short on income to qualify. Theres also many local real estate meetups depending on how far your willing to drive where you can meet other like minded people and network to learn from them as well. 

@Albert Bui @Matthew Kwan @Kin Meng Sio

Hello Komal, 

It seems that you have some experience in managing tenants and understanding how the market works. Theres many states you can invest in and since your young if your open to moving I would suggest going the house hack route where you can buy a property and live in it while renting the other rooms or units if you buy multifamily. This is the most conservative approach and you can also but with low down payment and not have to use up all or most of your cash saved up. Every state will have their pros and cons like extreme weather higher insurance or higher taxes. Some might be more tenant friendly which can be scary too. I would recommend to continue doing more research on the markets your interested in and reach out to other people here about their experience in the state your looking to invest in. 

@Albert Bui @Matthew Kwan

Hello Steve, 

Most conservative option I would say is to house hack. House Hack is when you purchase a single family home or 2-4 units and live there as your primary. The great thing about this strategy is that it allows you to put low money down 3.5% -5% down. You can rent out rooms if your living in a single family home. This will help you pay down your mortgage and if need to you can rehab the place while living there. Once you have added enough value in order to get max market rent then you move out and rinse and repeat. The same concept is used if you buy 2-4 units. This is the most conservative strategy and best way to learn hands on about rehabbing, managing tenants how to add value to your properties etc.. with low money down as well. 

@Albert Bui @Matthew Kwan

Hi Sia, 

One way is to attend local real estate meet ups. Usually theres many investors that attend and are always looking for deals. Bigger pockets is another great resource as well as social media. Promote any off market deal you might have as well to get the attention from investors. Lastly make sure you are the professional in your market and know it inside and out and provide value to your investors. Hope this helps. 

@Albert Bui @Matthew Kwan @Kin Meng Sio 

Hello Yang, 

I would not advise to buy out of state if your a new investor. Even tho it may sound good on paper the reality might become a nightmare. Unless you partner with someone who has the experience and can learn from them. Theres many things you need to consider when purchasing out of state. Quality of tenants, the area, weather, property management, contractors etc... You will need to make sure you found the right team to help you with your out of state rentals. If you invest locally you can be your own boots on the ground and get the experienced needed for when you do decide to go out of state you now are more aware of what to look for. Right now it is hard to cashflow. What I've seen many people do in this market who live in socal is to house hack meaning you buy a single family or 2-4 unit multi family and live in one of the units. This is the most conservative way to begin because theres no rush in rehabbing and you also get to live somewhere where people are paying your mortgage. Thats one way to really learn everything you need to know in order to continue moving on to your next investment. Another investing strategy I see for socal is flipping houses. That can be scary too especially if you have no experience. Many people with no experience partner up with experienced flippers and learn that way or you can look for a smaller flip like condos that can be less expensive and less rehab. Those are some suggestions. Hope this helps.

@Albert Bui @Matthew Kwan

Hi Jonathan, 

Yes you can FHA is not for first time home buyer. No need to worry about you can use it even after having a conventional loan. If you can qualify on your own its best to go on the loan by yourself so you and your wife can maximize using conventional loans for future investing. You can max out at 10 conventional loans each if you plan accordingly. Your wife can still be on title and only you on the loan. The only time you need to worry about using FHA is if you already used FHA and you want to use it again as there's guidelines to use FHA again to buy another home. There's also some exceptions to use another FHA loan as well. Hope this helps.

@Albert Bui @Matthew Kwan

Hello Cooper, 

I am also in OC and I agree its really expensive to buy anything thinking you will cashflow. Is it possible yes but very rare just like finding a needle in a haystack. Your not the only one looking to invest out of state. If this is your first time investing buying outside of your backyard might not be a good idea due to the lack of experience. If you do decide then investing in area that you are familiar with like Idaho might be a good idea as you seem to understand the market. You have to ask yourself what is it exactly that you are looking for in real estate investing? Buy and hold for appreciation or buy and hold to cash flow asap. Overall there is no right or wrong way to go about this is more about how comfortable are you with investing out of state versus locally. You can also try to house hack in orange county but that will not cash flow even after you leave unless you set yourself up to try to break even as much as you can for when you move out. House hack is when you buy a single or 2-4 unit property and live in one unit or room and rent out the rest. This way you can live there while your tenants help pay your mortgage and the goal is to be able to move out and once you move out you either break even or cash flow. If you don't cash flow at least you will have the appreciation. 

@Albert Bui @Matthew Kwan

Hello John, 

If you have the money and you know you will take action by paying for this mentor and actually follow their process then yes it might be a good thing to help you grow without any growing pains and avoid many mistakes they have done. It can also save you time as well. All depends on what your goals are when joining these gurus groups. They are not cheap to help avoid mistakes. 

Another way to find a mentor is by attending local real estate meetups and see if you can connect with someone who is where you want to be in the future. I would say it would be worth it to also go that route and find a way to offer value to this mentor where you can learn as much as you can from them. People are willing to share their knowledge with others as long as they know you are serious about the business and willing to learn. I also would suggest trying to find a mentor this way and you might not have to spend thousands of dollars. 

Last option would be to just figure it out on your own and using all the free resources out there and make the mistakes and learn from them. The problem with this approach is that you will be risking more time and money. If you decide to just learn on your own one way that is not high risk is by doing the house  hacking strategy where you buy a single family or multi family unit and live in the property while renting the other units or rooms. This was you will have a place to live and also learn how to manage your tenants and how to rehab. This is only if you plan on buying properties and hold them. 

Overall there's no good or bad way to get started its all about what you feel more comfortable to make you not have bad experience where you just give up and don't try anymore. 

@Albert Bui @Matthew Kwan