All Forum Posts by: Manny Cirino

I respectfuly disagree there are always people at your local REIA who have a lead on a few good none traditional lenders. Bank may give you the best rate, but other non traditional sources may give you a better barrier to entry ie lower ltv. Have both options available and using the best product to much your underwriting goals is key.

Always ask to see copies or the leases but of coarse in your scenerio they could go as far as to fake them. What I found is in most cases if the tenants get wind of a recent sale they feel as if they will be kicked ou and bale or are afraid of rent increases coming.

I could just be bad luck. Have you tried talking to any of the tenants? 

FHA's construction loan is called the construction to permanent loan(also known as a one time close).

You shouldn't invest right now with the exit strategy of refinancing out a property because it is like playing hot potato. Once the music stops you could be caught in a very bad position.

If you buy then buy to hold, buy with enough cashflow to leave you room to pull back rents in case the rent prices drop, so you could ride out any down turn that comes.

the market is still hot in some markets but if you look at what is happening in the stock market today it is going to scare a lot of people.

If you have $50k to put down then yes, your mortgage payment will be low enough to buy and safely in New Britain. You can get $1,500 in rent easy! Entire houses for rent are rare and barely affordable for most of the tenant pool in New Britain. As long the house isn't on the north side you will be do well.

It depends what area you buy in, what kind of loan you purchase with and the condition of the house. Your mortgage is probably going to be so high that it will be close to rent rates. Can you tell us more about the property and how you plan on buying it?

The number one thing that trips up new wholesalers is the closing process and everything that takes places in between an accepted offer to the closing.

You have to go after a property and make an offer as if you were going to buy it for your self. 

Make the offer 

Once it is accepted you have to open escrow with a closing attorney.

You proved the escrow attorney a copy of your contract along with an earnest money deposit.

You should write in  an inspection period on the contract. And this is the time were you hustle and find an end buyer/investor to flip the deal to. 

If you do not have the deal secured you are going to learn very fast that most investors are not honest and will try to go straight to your seller.

Once you find the buyer, they see the property and agree they want to buy it. You sign an assignment of contract between the 2 of you for what the agreed fee is and then a new contract is written between seller and investor/buyer. 

I use to sign my assignment at the escrow agents office just to give the seller a more professional prospective. Signing a contract over a car hood could make the seller feel less invested.

 I understand what is tripping you up let me explain what I learned over time.

higher cap rate are usually in worse neighborhoods which means the tenant pool is high risk. Higher cap rates could also mean the the property is vacant or needs extensive renovation.

lower cap rates are usually b and a class properties in nicer areas or bigger markets. This makes them sturdy investments because the resale value most if these property's sit in a prime location. 

Now a high cap rate could just be someone trying to exit and investment and the seller is delusional and greedy. And the low cap rate is just not a deal at all. And a high cap rate could be a home run if you are buying it off market which is the ideal scenario you want to buy in.

There is no right or wrong answer. You have to determine your investment style and risk tolerance. Maybe you like safer places to put your money or maybe you like to ad value and aren't afraid to invest in ghettos.

The best way to make sense of the deal sometimes is to evaluate the cash on cash return. For example

if you buy a 190,000 property with 20%(38,000) down and your noi is 19,000 then your cash on cash return 50% of coarse I am not including debt service in the calculation to keep it simple. But just want you to see a different t angle. If you make 50% return on investment and you make your initial investment back in 2 years is it good to you?

 Go to loopnet look at several deals some will have a pro forma, t12, t6, property flyer, memorandum, etc all documents that break down the income and expense. Review them with a note pad next to you, and write down every term you see. Then study those terms to learn more. And within those terms, explinations and examples will appear even more terms you don't  know and will also have to study. once you start to understand  a little better look at the deals and try to underwrite them yourself practice, practice, practice.

Attend youtube & google university everyday. Listen to podcast everytime you drive and everytime you sit on the toilet. Waste a bunch of money on a bunch of books that only tell you an elementary level or information and theoretical concepts, but never anything practical. That should keep you busy learning for about the next 2 maybe 5 or even 10 years. See you then!

My point is one post is not going to give you all the magic answers there is a huge learning curve and you have to 

A. Study your *** of learning like most people here did or 

B. Pay for a mentor to cut that learning curve in half.

check of your city planning and zoning website and see if the have a planner on call. In Lakeland, FL we are lucky enough to have a planner on demand whos job it is to sit by the phone and answer ever question you have about the land zoning.  

The due diligence for building process could be expensive and you can waste money on several test only to find out the land is not buildable or not feasible.