All Forum Posts by: Daniel Whitmore

@Jonathan Bombaci thank you very much for the support and feedback. I appreciate the insight that the cost of a bad deal is less than the cost of no deal (in the long run). That is not what I’m going to strive for obviously but it does give me comfort knowing that it will be OK regardless.

Regarding networking and attending REIA meetings, i think this is great advice but I feel like I have a disadvantage because I'm looking at a market out of state. I can't attend these meetings in person. I may relocate to the market (UT) eventually which will help me network and learn about potential opportunities/deals. Until then, is there another way I can network from OOS to find deals before they hit the MLS?

@Joe Villeneuve thanks for your feedback. I’m shocked, too. I assume your advice for me, based on my first 2 paragraphs, is to give it time and focus on turning my deficits/weaknesses into strengths including building a team, building my network, building systems, generating leads and the rest will fall into place?

@Sam Shueh I am working with a lender my agent recommended so that I can make offers when I find properties I’m interested in based on my criteria.

I agree that I need to start making offers but typically I’m not willing to pay asking price. However, because of high demand here in UT, good properties are getting multiple offers some higher than asking price. I don’t see how I can compete in such a hot market. Perhaps I need to look elsewhere.

@Joe Facenda

My strategy is to buy and hold. I want to buy 1 property per year for the next 10 years. I am currently focusing on the Utah market where I have some friends and family. Ideally my first deal will be a duplex or “mother in law” where I will have the ability to house hack.

Please allow me to share an example. I found a duplex (4 bd 2 bath) in a C class neighborhood (Rose Park) for $325K. I put down 10% at 5% rate, 30 yr fixed. Mortgage is about $1600 per month + $600 for taxes, insurance, MIP, capEx, utilities. I rent out one unit at current market rent of $1150. I move out a year later and receive $1200 for unit 2. I see a positive cash flow of approx $150-200/month only after I move out. For Deal #1, would you consider this good, bad or OK?

How important is it for my first deal to be a good deal?

I’m new to real estate. My network is small. I don’t have muscles to flex, I don’t have past experience to guide me. I’ve read books, listened to podcasts and webinars but that can only help me so much, right? I have a lender and an agent but I don’t have a contractor, attorney, CPA, or inspector I trust.

To make matters even more difficult, the markets I’m looking to invest in are hot. Good deals go fast. Starter homes are more expensive than I anticipated. Everyone is paying asking price or higher. Most deals are gone before I ever hear about them. I’m competing with investors who have been doing this for 20 years. They know the market far better than me. They have teams in place. They have systems I don’t have.

I have little hope that my first deal is going to be a home run. I’ll be lucky if I break even in terms of cash flow. In reality, it seems a lot harder than all the books make it out to be.

Here is my question: how important is it that my first deal is a good deal? How much pressure should I be putting on myself? This stuff is stressful and it sometimes consumes me. Should I spend the next 2 years reading every real estate book, vetting/ interviewing every potential team member, studying the market daily, finding a mentor I trust and can learn from, BEFORE I do my first deal??

Or... Should I work with my investor friendly agent and just buy an OK deal found on the MLS just to get it out of the way?

@Andrew Brown Thank you for sharing your journey with the BP community! This is very impressive and very inspiring! I live in the LA area and have yet to do Deal #1 but this gives me hope! 

I had a discouraging phone conversation with a lender out of state in Provo UT, a market I am focusing on for my first deal.

The “investor friendly” credit union representative told me it would be a challenge for me to get a loan based on my current situation, outlined below:

1) I am an out of state freelancer and my $40K income last year is a summation of 5 different W2s.

2) My rent expense is almost 40% of my income (I live out of state in LA)

I will not accept “no” as an answer because I know I am good for the loan and can generate the income needed to make my monthly mortgage payment once I move to UT. About me:

- 802 credit score

- $0 debt

- $100K in the bank (70% tied up in stocks)

- My goal for Deal #1 is to buy a duplex and house hack.

- I want to finance using an FHA loan.

This would require me to move from LA to Provo. I would no longer be using 40% of my income for rent. But technically my income in Utah is $0 because I don’t yet have a job there.

The following questions are for those seasoned investor who started with just a few dollars and had to be creative with financing and also for any creative, investor-friendly lenders who would be kind enough to offer advice...

1 - Am I out of luck getting an FHA loan until I secure a W2 job in UT and have proof of income there? Trying to avoid moving twice.

2 - My family owns a condo in UT I could potentially move into as a last resort (it is occupied with a spare room). Could I use this point as leverage in obtaining loan I.e. $0 rent expense?

3 - In any cases, is it possible to obtain an FHA loan without proof of income? In my case, I have proof of income but it is out of state income.

4 - I’m trying to think creatively. I have 100% confidence I can get a decent job in UT and I am actively searching. Should I put investing on the back burner and focus 100% of my effort on finding employment in UT?

@Theresa Harris thank you for your feedback.

@Jim Goebel

Thank you for the insights, Jim. I really appreciate you taking the time to address my concerns and share your experiences. I think your points are valid. I probably don’t need to start from scratch (again). It would be wise for me to build on my past work experience and existing skill set. I’m sure there is a corporate job out there I could tolerate, I just have to do my homework and put in the work to find it. I appreciate you highlighting the challenges and pitfalls of working in the trades. There is a high probability I’m not well suited for such a role. To make another career misstep would be another year or two wasted and the older I get the less time I have to figure it out. I have a bachelors degree in business mgmt and a decent amount of money saved up, so I will take the time to explore other options and find the right opportunity.

@Andreas W.

Thanks for your feedback, Andreas. Glad to hear you don’t think I’m too old for such a transition! I think your point about mechanical aptitude is fair. Sadly I have no experience or aptitude. I will rethink this option and consider other opportunities that fit my skill set.