All Forum Posts by: Frank Wong

Nick,

Negotiate a lower interest rate on the $55k. Have the seller pay for all closing costs.  Backing off seems like a good idea.  If the seller had better offers that allowed them to not finance the deal they would have taken it. 

I would fill the pool for a flip.  Most buyers do not want to deal with a pool which means they don't want to buy a house with one.  When you are flipping you want to cater to the masses and get as many buyers to like the house.  Nothing extreme.  Selling Vanilla is better than trying to sell mint chocolate mojito with lime.

Hi Jacob,

1. I love the idea of finding a duplex.  Live in one and self-manage the other side. This will save you some money and keep a close eye on your first property.

2. $4,000 is not enough to get started.  I am not sure what the prices are in Iowa but I suggest saving enough for a down payment and have another $10-15k in reserves (could vary depending on avg price of the area). Never know what happens in life and to the property.  You need extra cash just in case.  Keep saving and don't feel a need to jump in.

3. I would get familiar with all the areas that you are interested in and see what prices are. Make a watchlist of properties you like and keep track of sold prices. Check what rents are for the area. You can look on craigslists and apartment sites to get an idea on rent comps.   This will give you a good foundation on what to expect.

4. Find a 2nd source of income.  This will fastrack your way to a down payment and to your goal of buying your first deal. 

Hi Patrick,

I would look at the total cost of owning vs renting.  Ask yourself can you see yourself living in the condo for the next 5yrs?   This will help with perspective.  In your case, you have rent or mortgage shared by a roommate which helps out.  

As for the top of the market.  No one really knows what will happen with prices.  It surely cannot sustain this upwards momentum forever without a pause.  The when is the million dollar question.  I do like your idea about having cash reserves to double down down the road.  The key to surviving a downturn in a market is holding power and not being overly leveraged.  

If buying doesn't feel good don't do it.  Whatever decision you make its gotta feel good. No regrets.

Real estate is a long-term play.  Money is made buying up, flat, and down markets.

I invest in the Dallas Ft Worth market.  I have family living there and also got started 18yrs ago as a college kid with my first 4plex.  I like the market because of its a large metropolitan city with a steady growth of population.  There are many attractions and fun things to do and over the last 2 decades, the diversification of jobs has gotten much better.  I see lots of development and new construction going on, but  I also see development and construction going on in every major city I visited this year.

The con would be hail damage to roofs, high property taxes, and foundation issues (the cost of repair is much lower than CA).

Hi Elad,

I didn't see your rental posting but I would put a good shot of the front of the house, kitchen, living, and 1 bath.  I suggest looking at your competition on pricing.  Look for homes in the same area the same school and sqft. List yours $100 under everyone.  It usually comes down to price.  People are willing to sacrifice a few aesthetics for lower rent. 

I have SFR rentals in Arlington and Ft Worth. All my rentals found renters in less than a week. Its supply and demand. If there is more supply you gotta make a market adjustment. Get the renter before your competition does.

Hi Trae,

Like many that have responded.  I think the best is to look near your home or in State. The main reason many investors look out of state would be from high priced areas in CA or NY. In your case, you can remain in State and still find low priced homes. 

What I have noticed is many new investors look at the prices of properties in other states and cash flow opportunity and automatically think it's going to be easy.  They don't consider everything involved.  

1. It is not easy. You are hundreds or thousands of miles from your property.  You can't just stop by and check on it on a few hrs drive. 

2. You need a team.  You need people there who you can trust and rely on. No, it's not this great PM that you found.  You need a trusted friend or family member business partner.  This is the key part. 

3. Need a reliable list of contractors and vendors that you can go to.  The hard thing is building this list.  I found the only way is trial and error. Sometimes reviews and referrals just didn't work out. 

4. Not only do you have to do homework on the area of focus.  You need to fly to the area spend a good amount of time and drive all the neighborhoods. I would make a list of all the closed sales in the last 6 months of the area of focus and price points you are interested in. You at least get to see what the home and neighborhood looks like per price point.  Pictures only tell you so much.  You gotta see it and it can change your view. 

5. After you factor these things. If the ROI is still worth it. Go for it. You need to be prepared and know exactly what you are getting into.

Hi Dillon,

Yes , that's the homework part and research part of your purchase. Before you buy the property. You should look for current closed sales of condos in the neighborhood that are similar in size and age of the building, if it's in the same building that's the best. Those sales should be remodeled units. This will give you an idea of the ARV of the condo. You need to get good at this.

Hi Ryan,

Based on your job and schedule it appears you are looking for a true passive income for an investment.  Syndication is really the only thing that fits that definition.  After doing your homework on the deals and companies there is not much you need to do.  Collect the check which is truly passive income. 

Buying a rental property yourself will never truly be passive.  You can have a great PM but it still requires time and effort.   I would surely be looking at the medium tier homes and areas.  As great as it is to say I own 3 houses which are $40k each, I rather own 1 house at $120k.  As Jay says its a crap shoot for those low price homes.   I am also old school, I won't buy a house unless its cash.  I know leverage blah blah refi cash out.  That's just not for me.  

Syndication can be your start, build up your passive cash flow and set yourself up to own something down the road.  I have not looked into Cardone Capital so can't say anything about it.  His videos are great and inspiring. I am a fan of his but you still gotta research his deals. The syndications that I have invested in works for me.  I think every investor should have both investments going.   I have 80/20 split. 80% I own and 20% is in syndication.  Why did I split it this way?  No one will care about my money more than myself.  I also trust myself first before anyone else. 

Hi Jason,

1. Like everyone mentioned before find a new brokerage. If you are hungry and willing to learn there are firms willing to teach you. Keller Williams would be my suggestion. More importantly, find a top producer in the office.  Learn from that person join their team, be their assistant, volunteer for anything they want.  You are trading your time for knowledge.  The actual brokers in each office are usually not the ones ready to teach. 

2. So you ask for the timeline.  Each area is different and will vary but I can give you a timeline on what a CA purchase may look like. 

A. Meet new client interview them and ask them goals. Whats your budget? Have you gotten pre-approved? What type of house are you looking for? Are schools important? etc.

B. Ask the buyer to get pre-approved from a lender.

C. Start showing houses ( This can vary could be 1 week could be 6 months, no one knows)

D. Now the timeline when we get into contract.  Usually, the purchase is 30 days. The buyer puts a 3% earnest money into escrow, the buyer has an inspection contingency period inspect 7-12days depending on house and structure of your offer, loan contingency period 10-17 days depending on lender and speed. 3-4 days before closing you and your clients do a final walk-through of the house. The lender sends in closing documents they sign and closing happens. In 30 days if everything goes well you close and get paid and your clients are now happy homeowners. 

3. You asked, "what forms do I use?"  This is an easy fix.  Go to your office processor or transaction coordinator.  Go ask them what is needed for each closing file.  Ask if you can shadow them for a few days. Boom you learn everything you need about contracts and required forms.  Offer to help them get them coffee whatever. 

4. Now you learned about the forms and contracts. The most important part about being an agent.  You gotta learn how to get new clients. Learn how to sell. Learn how to add value to them (KEY HERE).  I suggest you focus 95% of your time here.  The rest will fall in place. Don't know sales skills. Tons of books and Youtube videos on this for free.

Real Estate can only be learned by going out and doing it.  Nothing you read or google online can teach you.  You also have to learn a lot of it by yourself.  That's the nature of the business and that's also how the real world works.  It's tough in the beginning but everything in life that is worth it ain't easy.  

Good Luck