All Forum Posts by: Jeff McCaskey

@David S. 

Hey David, congrats on having anything at all to start off with!!!!! That might sound like a joke but I'm serious, that's great!! I had 36 cents when I started, see my post about how I got started from scratch.......

There is actually a lot you can do with 4K.

1) Loan it out for a while and be a private lender and turn it in to more $ while the only thing required of you is trust in the other person.

(I accept amounts of private money from 1000$ and up and always have projects on going to put capital to work. If you're interested we can talk more about it)

2) Find an owner carry situation and use that as part or all of your down payment. (I bought one of my best income producing houses with a 2K down payment, owner carry for 3 years and a balloon payment meaning bank financing after that. That was a duplex.)

3) I bought my first house, a tri-plex, with a 5K down payment I borrowed from a cousin on the same deal. 3 years lease option with a balloon payment meaning bank financing at the end of the contract)

4) I bought one of my houses for 5K cash, little 1 bedroom place. Was a little rough, had to put another 4K in it I think but i was in the middle of another project so that was all hired out. I could have done it myself for 1K but didn't have the time.

5) Did the same thing on another 3 bed 1 bath, needed help so I put 2K down and did a contract for 5 years at 5% owner carry. Needed a new water heater and some carpet right off the bat so that was probably 1,500$ and I had to have tenant help me finish up little things the last couple days I was working on it because I couldn't get it done fast enough by myself.......

6) I bought another property for 0 down and no payment until it was rented out, that took about 6 months. I did spend about 17K on repairs so that doesn't fit your current budget but just showing that I bought one for 0 down and did all the work myself.

It can, will and does happen brother. Keep at it and it WILL happen!!!! 

Like I said, I always have projects going on, in the middle of one right now actually, and would always use some private money and pay 10% on principle amount ex. 4,000 = 4,400 paid back.

Hope this helps man.......

Jeff

@Russell Brooks 

There is another strategy that is used, by how many i'm not sure. But it does work. It's called 25:1. Make 25 offers and get 1 accepted. Pretty close to the 100:3 that was mentioned in an above post.

The criteria for 25:1 are....... 1) Listed "as-is" 2) Must be vacant 3) Must have had a price reduction (no time line of days on market required here) This is basically designed to be used on starter homes in the hottest areas of the city you are investing in.

Using this strategy and others as well, you are able to look at the "type" of property you want to buy, in the ares that would be best to "buy in" and having a "price reduction" means there is some motivation on the part of the seller which translates to a lower purchase price than the current list price in most cases. The name of the game is only get 1 offer accepted for every 25 you make and you will know you are getting the best deal out of all the offers you made.

This is a method used to make offers on property without seeing them first, other ratios would probably yield results too but this one I've seen touted to be magic. You will make the offers and get 1 for every 25 made. You now have a house that fits your criteria in an area you want to purchase at a price you are willing to pay and you have not had to waste any time looking at anything or an agents time. The contingent part of the offer is that it must pass buyers inspection. It's an "as-is" purchase so we are not talking about a home inspection etc etc, we are talking about you showing up, looking around (assuming the person looking knows what they are doing) and decide if the pictures and disclosed information suited the actual condition of the property and review your numbers to make sure they still work (you already know your numbers ahead of time). You then tell the agent to close the deal or you decline to accept the property and go on about your business.

Just another opinion, hope it helps.......

Jeff

@Josh Wendt 

You can approach this however it suits you and your family best Josh. If you want a few rentals and some "other" income then letting them pay themselves off is what alot of people do. It's very safe that way if it's not a business per se.

The reason why you get the feeling from most that it is generally viewed as negative to have a property paid off is due to the fact that the view point of most investors is likely a persistent growth mentality and having an asset that you could refinance and take cash out of does not help you grow if that cash is stuck in the form of "equity", it must be converted through a refinance to generate liquid cash for additional deals - to grow and increase cash flow and profitability of the business.

Hope this helps, let me know if you have further questions

Jeff

@Johann Jells 

I always pull the bad or undesirable stuff and put it back the way I would like it if I was the person living there. I would pull it and add lights and switches if it were me. If you are doing the reno anyway it shouldn't be any big deal to get it done. Might end up being a selling point vs not doing it. Not doing light and switch may be one small detractor that adds up in  list to a buyer now or in the future.

Just my two cents

Jeff

@Lorenzo Jackson 

Maybe it's worth looking at @Bob Green. The lending minimums are higher than what you need to do this deal you're currently working on but might be worth looking into.

Go get em man!

@Lorenzo Jackson 

Big L,

Sounds like you have a decent plan going then. Good job!

So, I would say if you sit down and make a list of all the people you feel like you can approach using your phone book from your cell, your friends list from facebook if you have an account, or any other organization you belong to including family and you speak with all of those people you list and can't find any private money, then perhaps you will have to use a HM loan to do these deals and refi with a bank until you have built 1) enough cash to bypass the HM or 2) have enough equity/relationship with the bank to obtain an LOC.

I didn't have enough to flip in the beginning either so I used rental property to make equity and upon refi ing those properties bought on contract initially with a local bank I gained a large equity position in my properties that I used as an LOC to then enter the flipping market.

Hope that helps ya out buddy!

Jeff

Looks amazing!!!!

@Eli Schmidt 

Yep that should be it, go record it at the courthouse. Probably a 15$-30$ fee to file and you should be done.

You might consider opening an LLC for any REI activity you may do now or in the future so you don't have the same liability concerns as property in your name personally. You can do that usually with your local CPA for a couple hundred bucks - write a check and done. Or do it online through your state online for half that, but the site in KS wouldn't operate correctly at the time I created mine so I had the CPA handle it for me. (there will be a yearly renewal fee to keep your business name in "good standing" which is required when working with banks, its 45$ in KS). FYI

@Josh Martin 

Hey Josh, welcome to BP and to REI!!!

I read the whole deal here and I would say to listen to the "pro" members specifically Bob E. and Cal C. with what they had to say. I would recommend to "consider" what the other "pro" members had to say in your post here but I would personally side more with the two I mentioned by name.

You are new to the game so my major piece of advice is to make sure you know what you are doing when you make a purchase, that you can handle it financially and skill wise as well. Just take your time and "know" that you are making  a good decision. Post the deal here and make sure based on others input if need be. Just make sure it's right for you and your wife.

That being said, being new and that you should enter slowly, I got from what you had to say that you would like to purchase as many units as you feel like as long as you can repeat the same results with each property. If you want the ease of using the HELOC money and want to replicate then you should follow Bob and Cal. You can use the equity, find a great deal, do the rehab, refinance, and if you had a great deal you will get all your cash back and probably some extra, effectively making money in the process.

You can use that extra profit to either pay your mortgage down on your own house or add to your investing fund to do more deals. If you just "buy with cash" and wait, it will be a very slow process and I don't get the feeling you want to wait years between purchases.

You are in a very good position for a young guy as far as money is concerned and you have a lot of opportunity in front of you if you handle it correctly, and that is really cool!!!!

If you need any advice just post it up and you will have plenty of help.

Hope this is insightful!

Jeff