All Forum Posts by: Derek Diamond

Hey @Account Closed!

Welcome to B/P!  

There is a whole bunch to unpack there.  A ton of good questions.  Just reading this(I could and probably am completely off base, like normal), but it seems like you may need to do some reflection about how you want real estate to help you achieve financial freedom.  It is a tool and like any tool the more you know about it the better you can use it.

I think you answered your own questions a bit here.  You say you have average credit so you know to get it a bit higher and that will help you get a loan.

Try and figure out what type of real estate you want to work in.  If you want to wholesale you don't need a partner.  If you want to get into multifamily as the end goal you need to start networking with investors that have money because of the higher expenses.

Before you jump in, get yourself another job(even if it is part time) banks like to see income coming in. Do your research, better your credit, learn and educate yourself, save up an emergency fund and once you answer some of those questions you had then you will be ready to jump in.

If you would like to know some specifics on what it is like to be a real estate agent feel free to DM me and we can unpack some  more of these questions.

@Billie Haynes

Welcome to the B/P community.  I would say you are going to have a tough time starting out so old.  But seriously starting out sooner is always a good thing.  Clearly you can't start until you are 18 because you can not enter into a contract as a minor.  Even once you are 18 you will find it very very hard for people to take you seriously.  I can't remember how many real estate agents turned me down based on my age ( I was 22) but the first agent to work with me got 5 deals in the first 2 years.  This was partially my fault because agents did not want their time wasted.  So unlike me you should, come prepared.  Have a business plan.  Partner with an experience investor.  IF you find a good deal, you will be taken seriously.  

Until December...learn.  Learn all you can.  This website is a great tool.  Read all the books they suggest. You will be financial free before you are 30 if you keep at it.

Hey @Adam Wertz

Welcome to the B/P community!  It's a great place to learn and share experiences.  It  would be best to ask very specific questions here so people can help you. 

 I am wondering why you would do cash deals for your first one or two.  Is it to set up a rock solid foundation? Or do you not want to risk others money until you learn a bit?  There is no correct answer, I am just curious.  If you decide not to do all cash you will get to your 10 units sooner(if that is important to you).  When I started I leveraged everything I had, I build up equity fast but wow it was hard to sleep some nights, I now have a fully paid off 4plex and it is stress free.  If that is your goal, I would say go for it.

Hey @Jacob Tyler Easterly

Welcome to the B/P community. It's a great place to start out and learn! It sounds like you two are doing your homework. I would suggest visiting with the CPA first before starting your S-Corp. Each state is a bit different and your CPA should be able to help guide you to what the best structure for the company. They might be able to get you to a trusted attorney and real estate agent as well and before you know it you will have the start of a great team. It would really suck to pay for an S corp then find out an LLC would work better for you two. Or maybe you have no real assets and just good insurance is enough for you. Talk to a local attorney and CPA. Good luck!

Hey @Donovan Curry!

I would make sure that I have a sufficient emergency fund. 3-6 months of reserves incase some crazy life stuff happens. $25k is a good amount of money but it is not enough to let you compete with the all cash, and no expense too high for me investor. So I would do what they are not willing to do. I would get myself a 3.5% downpayment loan (because I have good credit and a job) and use the rest of the money to do my repairs. Save at least 10% for unexpected expenses that jump out of the walls. It will be tight but doable. Then you increase the value of the house and you have options. Maybe refinance and do it again. Maybe live there and get a HELOC to do another. Maybe take a vacation. Good Luck!

@Diane Tycangco 

I have invested in Denver for the last 8 years. Now I am not finding the cashflow I want. The first property I bough was at 1.8% (so close to that illusive 2%) and that was off the MLS. I personally don't like to work super hard when finding a place, to me the competition is just to high in Denver, so I went out of state and get 1.5%-2.0%.

Hey @Morris Sandvig

Welcome to the B/P community!  Great questions.  I started out like most without much money.  I personally used my first property to purchase my second.  I fixed up my first and after a year I was able to pull money out and use it as a down payment for the second.  Debt to income has always been tough for me because when I started I did not have a job.  I had a cosigner on my property. Some of a deal is better than all of no deal, kinda thing.

I am sure it is different everywhere but I have found that rental income can count after a few years.  Although I recently heard from a lender that they will lend on rental income if you have a signed lease.  So shop around, you will get many "No's" before you find a lender that will work with you. But keep trying and you will get that second one under contact.

Hey @Edgar Jimenez.  I am sorry to hear about your situation.  This is the kind of situation where very specific details are going to help you out the most.  There is probably a local investment group that meets in your area and I would bring your issues to them.  They may know good GC's that can help at a fair price.  They may have dealt with this same situation in your same area and know some "hacks".  

To me it seems like you need to hit pause on your investment property and get your home under control.  Investing is a long game.  Just because you are underwater right now does not mean it will always be like this.  You will get this project done and you will learn and move on and become successful in real estate!

Hey @Leandro Abreu Castro! Welcome to the B/P community! You are in the right place to learn.  You said a lot and I will try to unpack it all but remember, like you said, these are my opinions.

You are 17 so you have a year before you can partner or sign any contract. No on will sell a place or partner with a minor because that makes the contract unenforceable on their end. So take this time to educate yourself.  You are staring out WAY earlier than most do and if you stick with real estate you will be financially free decades before many of your friends.

Most lenders(i.e. banks) want to see that you have a good paying job and you have been there for at least 2 years being 17 I assume that this does not apply to you so partnering is not a bad way to go.  Once you are 18 and you find a "good" deal people will want to partner with you.  If you can't find a partner that probably means you don't have a great deal.  Look up "bird dogging" "driving for dollars" "wholesaling", these can all be good ways to get started with little or no money.

Find an area of real estate that you find passion in and learn everything you can.  Even if you spend 5 years just learning you will be in your early 20's, still externally young, and you will know more than most!

A counter point about diversification.  Warren Buffett once said "diversification is protection against ignorance. It makes little sense if you know what you are doing."  Find out an area you like and become the expert of that area. Then you can charge more than anyone else.  THAT is how you become rich.

Grant Cardone's book 10X is not bad.  It has some really great board level ideas.  But if you follow him on instagram and youtube he is selling a lifestyle.  He wants you to see him as "cool" and buy his courses.  Do a deep dive on this site and you will learn sooo much more.

This is getting long so I will end it here but if you have any specific questions feel free to DM me and I will try to help.  Good Luck! you will do great!

Hey @Darnell Floyd ! Welcome to the bigger pocket community! You will learn so much here that can help you with your investments.

As an agent, I personally do not mind (in fact I enjoy) sitting down with someone that is new to the area and real estate investing. However, that is not all agents. There is a wide spectrum when it comes to agents and many are constantly busy so you are smart to show up prepared.

If I were you I would try to narrow down what type of investor you want to focus on and try to stick with it. I like multifamily units because it interests me and gets me closer to my goals. Others hate multifamily because they have to deal with annoying tenants so they invest in raw land. You get the idea. Of course this can change, once you sit down with the agent because they may tell you that your new area is really perfect for Single Family Residence (SFR). So to contradict my last point you can be open when starting out.

There are so many specific questions to ask but if you are thinking about investing and using the agents expertise... I would make sure they actually invest themselves. It is shocking how few real estate agents do not invest themselves but give advice about it. Ask about their portfolio. Ask about cashflow, average tenant rents for your specific area and interest.

Make sure they are willing to field your calls because starting out you should have plenty of questions as you go though the process. Make sure that you won’t just be handed off to an assistance as soon as the offer has been put in.

The list is endless but I hope that helped.

Good Luck!