All Forum Posts by: Conn G.

@Hunter Cone, Hi Hunter, You should look to find a great property managers to help you alleviate any troubles with long-distance real estate investing. As far as books and research, I would recommend "BRRRR" by David Greene to give you a different strategy investors use in real estate. Also, "Never Split the Difference" by Chris Voss gives great insights on negotiation tactics.

@Marc Izquierdo. Appreciate the suggestion.

I like the idea of a higher purchase price with lower interest rates. This will typically increase your cash flow compared to higher interest rates with appraised house value. Hopefully, I can post an analysis soon based on the time value of money from the different strategies I can leverage.

Also, it's amazing that there are thousand creative strategies that you can use as a tool for your financial goals, it just a matter of how to use the tool properly. 

@Tom S. Thanks for the suggestion. 

I need to research the options on Craigslist. There might be more quality sellers through direct mail? Idk, that's why I need to try it. In addition, with the buy-out clause, I am out-leveraging myself based on the amount of money I can put in the property. My goal is to look for sub-par quality houses with minor repair costs.

As far as the interest rates, I think everything is negotiable, from downpayment, interest rates, loan term, and the purchase price. As long as the numbers work with me and the seller, I will be comfortable. 

@Thomas Rutkowski Appreciate the feedback. Uncle Sam will forever be sticking his hands out once you reach for your wallet. My focus point will be not paying all at once which looks more appealing. I can also demonstrate how $50,000 of capital gains now isn't worth $50,000 10 years to the future.

As far as the depreciation recapture, I need to educate myself on the structure. I still have some kinks to iron out with this gameplan, but I believe it's a win-win for seller & buyer. 

Hey BP,

I am looking for an opinion on my potential strategy to get started in REI.

This strategy would include a direct mail campaign where I would target property owners with 100% equity in residential multi-family properties (6+ bedrooms total). I would offer the motivated owner to consider seller-financing to avoid capital gains tax, realtor commission fees, closing costs and gain a passive income with an amortized 5-8% interest on the principal amount. To take account for the concern of not selling and getting all cashback, I would offer contract termination option where the lender(seller) can null the contract with a  6-month notice, however, all principal must be paid back and/or additional 2-5% convenience fee based on the original principal amount (Work in progress).

What do y'all think I am missing here?

My only concern is the legality of the contract and the small market of potential property owners. I need a professional to review this. However, I believe this strategy will work well for a person looking to sell but wants to escape the deadly costs of selling a property. The contract even includes an exit strategy for them if they need the cash soon.

Any feedback would be awesome! 

Hi @German Alvarado, 

Welcome to BP. 70k creates you various opportunities in REI. However, your greatest investment is yourself. Make sure you educate on the subject from books, podcasts, and BP forums. Educate yourself till your comfortable in what you want to do, then take action. 

@Zach Medina, it depends. Seller financing works best when the owner has full ownership of the property. If there is a mortgage, the lender providing the mortgage still has the first liens of the property. However, I wouldn't see any problem taking over the loan and paying the equity to the original owner in payments. There is a lot of creative financing out there, you just have to find what works best for you.  

Hi @Benjamin Nunnally,

Your greatest investment is yourself. Try to soak up as much information as possible about REI. Read books, listen to podcasts, watch info videos, and read on BP. Learning from other's experiences will make your experience better!

Hi @Zach Medina,

Another option that you can look into is seller financing. This would essentially be a purchase and loan agreement where the current owner acts as the lender and you as the borrower. One great attribute about this financing is that contract terms can mutually benefit both parties. BP has plenty of blog posts about this topic or other creative financing strategies. 

Hey @Keith Carey, 

If you have a property that is from a lender and the property is creating income for you, don't call it debt, you should call it leverage. This leverage will be able to help you pursue your financial goals.

As far as paying it off ASAP or the longer way, on your beginnings of REI, I would try to buy as many properties you are comfortable with. This will gain you invaluable experience of the process and numbers while diversifying your portfolio.