All Forum Posts by: Dave W.

Mike - 

First, not my area of expertise but will offer my armchair quarterbacking until one of the many smarter than me can chime in with actual experience...

1- do the homework you can and figure out what he owes as of today. If it is a short sale, that’s one thing. if he is underwater but he could just be delinquent a few months and repaying the back mortgage is an option, that is another. Are there liens already at play? (Municipal, tax, etc) — all of this should be public record (masslandrecords) or a call to the town where the house is located in. If it’s a short sale, meaning market sale wouldn’t cover the note AND the guy wants to walk away anyway then it will be extremely tough as it might as well go to foreclosure. If he didn’t want it to go to foreclosure then a short sale and getting some legal help to make it so would be possible and much easier. 

2- This guy has had a tough lot. You have an opportunity to help him walk away clean and start fresh and avoid the legal hassles and creditors as long as the price you can give him equals what is owed on the mortgage plus outstanding liens/etc. sometimes it’s still not a deal even though it’s a distressed situation.

3- if the amount of #1 isn’t *substantially*less than the market value of his house. It’s not a deal and just a crappy situation. The house will go to foreclosure and when the bank auctions it, you can show up and it’ll be less than the amount he needed anyway. 

So.... Assuming it’s a deal worth pursuing - have a lawyer and your funds/funding at the ready and approach him with an offer that gives him the ability to walk away, walk away w/cash, etc — depending on the how much and what you feel is right to do here.

**If you read this far, I do have a lawyer you can call that works in this space in MA to avoid foreclosures and may be able to guide you and provide a consultation - direct message and I’ll share his info. 

Good luck / these are delicate situations where you can potentially help a seller AND create opportunity at the same time.

-Dave

I would recommend never paying 100% upfront since you have no recourse or leverage in case things aren’t done as expected.

Although ideally you can control costs by paying materials directly, I’m not opposed to a small down payment (20-30%) for a larger job which translates to their materials and a setup usually. 

That said, in my experience, most  folks who are seasoned contractors don’t ask for prepaid payment in full. If they do, you bear 100% risk where it should be shared.

Hi Chelsea,

Welcome! Getting your salesperson license is pretty easy and can be accomplished by taking a weekend course and brief exam. AREA and a few other schools are around here and easy enough to find -- I don't think any of them are particularly better or worse as they all seem pretty boring/standard stuff. 

From there, to actually practice as a real estate agent you need to be associated to a broker so I would think the next step is to make sure you meet brokers in an area you are interested in investing in or live in and think about working for/with them. 

Typically the broker will take a split of any commissions earned by you and you would be expected to do as much of the grunt work as possible while you are learning and building your book of business. 

Alternatively, lawyers can become brokers by filing simple paperwork so may be another avenue to explore if not looking to be a full time realtor/agent. 

Best,

Dave 

Hi Lior,

Welcome and thanks for introducing yourself. This story sounds a little like my start in both consulting and startups... Although it's real estate that truly bought me my flexibility and freedom from working a 40, 60 and sometimes 80 hr work weeks. 

I have a project going on in Newton - contact me if you want to meet over there and chat real estate. Good luck on your adventures!

Best,

Dave 

hi Martin,

Where there is a will-- there is a way! 

If you don't currently own anything I'd suggest saving up for a modest down payment (first time home buyers can do ~5% and maybe even as low as 3.5% for FHA loans) and buy a 3-4 family in your neighborhood. It looks like your from Malden so there should be a few multi's that would fit the bill where you are. This makes buying much more accessible since most investor owned real estate requires 20% or more down.

This will help you get a chip in the game and also if done right help subsidize your living expenses since renting out the other units should pay a chunk of the mortgage for you! Now, if you then fix up the house over time (or even add a bedroom or bathroom if feasible) you'll increase the value of your place in both rent you can charge and refinancing and getting cash out... And with that extra cash you might be able to use for another piece of real estate, flip, etc

Alternatively, many folks will recommend thinking about wholesaling as a way in - I'm not pro/con wholesaling but this is a different beast and business to consider as a way to get familiar with the areas, and investor mentality, etc. 

Given your close to where I live, happy to meet for coffee and chat sometime if helpful. You can definitely do this if you are ready to make a move.

As for price points (your original question) the answer is a frustrating one -- it "depends" on what your goals are. Low cost isn't necessarily a bad or good thing. Just a different slice of the market that has its quirks to work through...

Best of luck in your early investing! 

-Dave 

Hi Dan,

First disclaimer, I'm not a lawyer so this is my opinion and basic understanding of things. Maybe others with an esq after their name here will add detail.

Although you notified them in person, you would likely want/need another 3rd party to verify this communication took place or otherwise had the tenant sign or acknowledge a notice (if possible). Otherwise, using certified mail or other verifiable receipts are needed to prove it for a court if you ever had to go there.

At this point, I'd send a certified note and go from there point forward. Also, if this is your first time doing these types of things it doesn't hurt to pay a few hundred bucks to a lawyer to help with processes like this-- it'll be a worthwhile investment so as not to get into the weeds for too long and avoid this dragging out multiple months unduly. Better yet, establishing a relationship now with a lawyer will be helpful so they can walk you through your first eviction, etc as MA has specific criteria here and is fairly tenant friendly. 

This will ultimately allow you to be able to firmly stand your ground and know what your next step/recourse is if the tenants disregard your notices, etc.  and inform them of such to get what you need here. 

Best,

Dave 

I echo Russell's advice - best way to buy a house and start working towards passive income. Lots in the forums here on buying, renovating (to increase rents/add value) and then rent out and move on to buy your next. When you can occupy a house the leverage (lower down payments) make it easier for buy/hold scenarios.

Good luck! I'm in the Boston area as well so happy to meet for coffee if helpful. 

Best,

Dave