All Forum Posts by: Dennis Kolsch

Hey everyone, I have a question about financing a 23 unit apartment with 4 people (one being my partner). There's other questions and concerns about how solid the deal is and whether my partner and I should move forward, assuming it looks good. But for now, I'm trying to understand a bit about financing with other partners. My question at this stage: how does financing work with two other investors and my partner and I? Does one person typically pull financing for the deal and other partners contribute cash for reserves/downpayment ect? Or do we form an LLC for the deal and split the financing somehow? At this point, let's assume our offer would be 600k and we'd prefer to split everything in thirds. Thanks ahead of time for any insight. Denny

You can definitely get into a good amount of beachside markets with your budget, although fewer within walking distance- but there's some. The question has more to do with what other criteria you have. You want to walk to the beach ideally, what else? Any water sports you prefer? Any type of beach (sand, water clarity, waves etc)? Do you want access to a bigger city? How secluded?

My top recommendations would be New Smyrna, St Augustine or Indialantic/Melbourne Beach for the east coast. I'd stay out of the panhandle for warmth reasons- it can significantly colder during the winter, which would suck if you're trying to escape the cold. For the west coast I'd recommend St Petersburg or the Bradenton area, both close to Tampa. I'm not really a fan of south Florida for personal preferences but you're basically guaranteed warm weather. You can boil these down based on other criteria. 

Malik,

I used half cash and half 0% interest credit card for the remodel. I have 15months to pay it off, so I've budgeted about $800 monthly toward it to knock it out. This is all based on my subjective experience and intuition, but the biggest questions I asked myself in deciding how wise it was to take on more debt when I already have debt were:

1). Is taking on additional debt going to help me achieve my long-term financial goals sooner?

2). Do I have enough monthly cash flow and cash reserves to comfortably (i.e. without too much worry or stress) take on the new debt?

In sum, I believed it would jump start my financial goals and I felt comfortable enough to take on both the new mortgage payment, new cc debt, and previous debt. FHA guidelines somewhat prevents you from making a horrible mistake, so assuming the home passes the appraisal and you qualify for a loan you can at least rest in knowing you should be okay financially. Again, Dave Ramsey would hate my thinking but whatever.

You'll hear split views on this topic. I was in this same situation 5 months ago- good amount of graduate school debt and questioning whether I should use savings towards that or primary residence. I bought an FHA home for 127k, spent about 8k on closing and downpayment, then put 18k into remodeling. I believe it was the smartest thing I could do in my opinion. Between the remodel and local appreciation the value is closer to 150k. Soon enough I may decide to pull some money out for either an investment property and/or pay off some debt with it. I plan to hold onto the property, rent it out, and purchase another primary residence in a year or two. Buying my house is what led me to want to start investing.

By purchasing this home I jump started my real estate interests, learned how to manage a remodel, built a network of contractors/agents/mortgage brokers/title company, and have a place of my own. Dave Ramsey would scoff at my decisions but believe it was the best thing for me and my family.

Inspiring story, no doubt. Congrats on the deal.

Rodney, I'm a Brevard native, grew up in cocoa beach/canaveral, currently in the old Rockledge vicinity. Just starting the investing process in the area.

Might be worth taking Michael Smith up on his offer regarding the meet up. I'm looking to meet investors and anyone else in real estate as well, so you may see me there.

Furthermore, my primary introduction to real estate came after a recent first purchase on a personal property. Since then, I was introduced to BP and my interests in real estate increased significantly. I'm currently soaking up as much education as possible with the goal of making a first investment deal by this summer.

My goal is to move toward buy and hold small apartment complexes by early next year. If anyone knows of meet-ups in the Central Florida area, please inform me. I'm looking to find a trustworthy community of investors that can offer wisdom and support.

Just saying, hello. Listened to about 40 podcasts in the past couple weeks and am constantly reminded to introduce myself.