All Forum Posts by: Chris Low

@Jay Hinrichs - thanks for the reply. That is really handy information! I've been wondering what would happen with hard money loans in the event of a crash. I'm sure conventional will be harder to get, at least for a time, but wasn't sure what to expect from HML.

Hi Angelica. To answer your question, I was referring to your monthly mortgage payment or cost of money, plus any Realtor commissions, title and escrow fees, etc. when I mentioned soft costs. I was just curious if you figured those in before determining what your profit was. @Angelica Osusky

Check out Amanda Han and Matthew MacFarland at Keystone CPA. They're in So. Cal. Amanda literally wrote "The Book on Tax Strategies for the Savvy Real Estate Investor."

@Jay Hinrichs I sure hope you're right!

"Hard money rates never change or at least very much and usually only come down in competitive markets like California."

We've been using an online community called Fiverr where you can purchase "gigs" starting as low as $5. You're basically paying a freelancer of some kind to do anything from design a business logo, create a website, develop a video, create marketing materials....you can even find someone to proof read your term papers through Fiverr!  You can either scan through the gigs that are featured (along with ratings and reviews for every service provider) or you can post the gig that you're looking for and wait for replies. I have been super happy with everything we've had done through Fiverr so far: logo design in multiple file formats, website development, business cards, logo wear. They are VERY quick and responsive - they have to be or they receive poor ratings. It's a great way to get exposed to the, quite literally, the entire world of designers and service providers without having to look all over for them. Good luck!

Beautifully done and very tasteful! I'm curious what your estimated holding time is and soft costs on selling, assuming those would affect the estimated profit?

Hi Josh - I think you're asking about what you should do before you move on your first deal, rather than a broader question about how you get started in real estate investing. That said, here is our response on steps to take before making your first deal:

• This may seem obvious, but make sure your team is in place! It might be tempting to "poke around" a little bit if you're unsure about jumping in to your first deal, but if you take that approach and do find a deal, you'll have to move on it quickly in most markets. So the time to get your team together is BEFORE you start looking at properties. You need an agent (unless you are one), a contractor and financing (unless you're using all cash) at a minimum.
• Know what you plan to do with the property. Buy and hold? Flip? Wholesale? Lease Option? Depending on what you plan to do with it, the goal you're reaching for (profit, cash-on-cash return, cap, etc.) will be different.
• Run the numbers. Once you know what you want to do with the property, run the numbers. And run them again. And have someone else check your math. Use tools that are available to you, like those on the BP website. The more deals you analyze, the better at it you'll become.
• Make sure your money is available. In most cases, you're going to have to put up some cash. Make sure it's readily available to you because the deal can fall apart pretty quickly if it isn't. Don't wait until you're in the deal to raise the money. If you do online banking only in lieu of a traditional brick-and-mortar bank, make sure you can withdraw or transfer the funds without delay.
• Create a tracking system. You're going to be signing and reviewing a lot of documents, whether in person or electronically. Have a system set up to manage them so you have all relevant information for a specific property in one place. You'll be surprised how quickly it can become confusing, especially with counter offers going back and forth, disclosures and inspections to review, financing and escrow docs, etc. You can get highly technical, but even a simple manila folder for each property is better than nothing.
• Stay positive! There will be a lot of ups and downs. Know your numbers and be true to them. Don't let your emotions push you to get into a bad deal. It's ok to walk away. There will be more opportunities.

You may be able to get a secured credit card in your business name where you put down X amount in cash and use it like a credit card. That helps you establish credit while you're going through the waiting period. Chase bank used to offer something similar to that.

That is AWESOME! One of the things we enjoy the most about looking for properties is the crazy things you come across in the process. It really is amazing the things people do to their houses. Often, it's a case of DIY gone bad. It injects a little humor into the otherwise stressful process of house hunting. Thanks for sharing!

I've thought about this a lot and my position has changed over time. Regardless of the election, there are some very strong signals that our economy is in a tenuous position: our trade deficit, inability to fund domestic liabilities, and massive underemployment to name a few. Some well known and respected economists are even making pretty dire predictions and it's enough to scare anyone. But I've come to believe that a) most of us can't predict when the worst case scenario will play out nor can we fully prepare for it and b) there are actually some real opportunities for investors in all but the very worst case scenarios. If you're an investor with cash, it's tempting to sit on the sidelines to wait and see how it plays out. But I've decided I feel safer with my money in tangible assets (real estate) rather than in the bank. Further, listening to a recent podcast by Russell Brazile really changed my thinking. He made the point that interest rates are currently at historic lows and his personal goal is to take on more debt at these crazy low interest rates while he can. While most people don't really talk about their investing goals using terms like "I want to take on more debt" it is actually a really smart strategy. If you need financing to get to your goals, why wouldn't you acquire that financing at the lowest possible interest rate? So, if you subscribe to that philosophy (and I do because all-cash investing is not an option for me at this time) it actually makes a lot of sense to secure those loans and invest now. But back to the presidential election. Real estate markets can get scary with a change of office and, considering the volatility in this year's campaign, it's safe to say there could be some upheaval in the financial world post-election. However, based on what I've seen and heard so far, the Fed is not anticipating raising the prime lending rate based on the election. If that's true (and it's always a big IF) we could continue to see favorable lending, which will continue to support a strong housing market. Phew! That was a long response, but the bottom line is that my personal strategy is to hold steady, continue investing, and keep my money out of a stagnant bank account paying little returns - even with all the craziness of this election cycle. But that's just the strategy that we believe will work for us. I'm interested, too, to hear what other people are planning.