All Forum Posts by: Greg Baker

Originally posted by @Stephen Masek:

Another major issue is resale.  Our understanding is that getting bank loans to buy properties worth $50,000 and less is impossible.  That means your only option to sell the low-end properties is to find another investor, or do seller financing.  The owner-occupants will not be able to get loans, or if they have the cash, will probably put it down on a nicer house, instead of paying cash for a house worth less than $50,000.      

I'm not sure what cases this is true, or untrue in. I am using conventional financing to purchase a rental property and when I called Bank of America asking if there was a minimum (75k, 50k, 40k, etc.) the mortgage agent told me there was no minimum as long as I put 25% down. Ultimately, I'm going with another bank that only requires 15% (with PMI) or 20% without, but they did not mention anything about a minimum either, we're purchasing the home for 50k. The above poster may be correct in instances of 3.5% or 5% owner occupancy.

@Rahul Bhandari

If you search for "Rochester" you'll come across a plethora of positives and negatives.  I've listened to over 80 pod casts and have done a ton of reading, and so many times people say "Do I really need a real estate agent?  i can do the research myself, etc. etc."  I was leaning this way until I met with @Mark Updegraff over the recent holiday break.  Mark shared with me a few of his favorite investment areas within Rochester, but what really opened my eyes was his specificity of "Assessors will not use properties from the East side of this road when pulling comps for homes on the west side of the road."  It blew me away that 15 feet left or right means the difference in 20-30% value, and thousands of dollars.  

An "uneducated buyer," I quote this because they may research stats inside and out, may very well jump on a deal on the East side of the road thinking HOLY CRAP THIS IS A STEAL AND JUST LISTED, when in reality, you would not want to buy there, and you're comping against homes that are not truly comps.  Where I'm going with this is if you decide to invest in a city, whether it be Rochester, Cleveland, Oklahoma, etc. in my opinion you NEED to utilize an investor friendly agent/broker/BP member who knows the area inside and out.  Even if you decide to purchase from a wholesaler, paying an agent/broker for their time and expertise may save you thousands of dollars in the long run.  

@Mark Updegraff (or anyone else) Do you know if the assessor's office takes in to account seller concessions?  Ex. my current primary residence we "paid" $92,500ish, but the seller conceded 6% ($5550).  In my head, we truly paid $86,950 for the house.  Will an assessor look at it that way if you provide a copy of the purchase contract, or do they view that 6% simply towards various closing costs, not specifically the price/value of the home?

Joseph, Happy New Year to a fellow Rochesterian!

Chris, I'd encourage you to choose a major that meets three criteria: 1. Course work you will enjoy, 2. Course work that is relevant to RE if this is your goal, 3. Course work that will offer easily accessible fall back job opportunities. Ex. My gut says a bs/ba in accounting, marketing, or finance will have more entry level positions available than psychology. Remember w-2 income can definitely help! Most of all, focus on #1. Good luck and enjoy.

Hi everyone, I've been devouring some recommended books over vacation and one book made a point that actually blew my mind.  It stated if you buy a $50,000 home with traditional W-2 income, I truly"paid" $75,000 pre-tax dollars for the property.  In other words, I had to earn $75,000 to buy a $50,000 item.  This fact finally made me realize the benefit of "pre-tax" saving/allocating and the power of passive income to use for future purchases.  

Now, I've listened to around 70 podcasts, read quite a few books and in my recollection the only way to use pre-tax dollars for real estate is through a self directed IRA which is more appropriately used for notes than a rental property.

Is there any other way to allocate W-2 income pre-tax to use for investment property purchases?  

Thanks!

I for one, see through your smokescreen and deflections.  I did not realize it until nearly an hour ago.  I finished Rehab Addict and Netflix recommended I watch "Hotel Impossible."  The show is based on the same premise as some of Gordon Ramsey's restaurant fix up shows.  It was then it all clicked...

Ben and Brandon have taken time from buying up all the multi families to film the first Biggerpockets TV drama series, MULTI FAMILY MAYHEM.  That's right, these two co-warriors will find failing multi family properties ranging from duplexes to 100+ units and tough love the owners either into shape, or out onto the street through a 3 month lease option that allows Ben/Brandon the property at a cap rate of 784%.  

It should be noted that each episode is actually 14 hours long which consist 95% of Ben discussing his thoughts and Brandon discussing his pets.  The remaining 5% will have you at the edge of your seats.  Stay tuned for further details.  

@Anthony Deringer  - Agreed, if the deal works under "worst case scenarios" then it's probably a deal that will work for you in the long run.  

@Jack Butala  @Seth Williams 

Thank you so much for taking the time to explain this, especially with the video links.  I'm guessing it's incredibly simple once you done it once!  I'll definitely be bookmarking this thread.  

@Brandon Turner  - Thanks for such a high compliment!  Ironically enough, I actually have the "Book on Investing in RE with Now (and low) Money Down" PDF open right now, and I'm reading through it, 60 pages so far this evening, and hopefully I can finish it tonight!  Through all my research I'm quickly learning that having an understanding of the financial avenues is one of the most important cornerstones of your RE repertoire.  I love how each chapter is dedicated to a financing avenue. 

Kudos to you and the BP donors for continuing to develop resources that go one level deeper, in one targeted aspect of RE, all stemming from the free Ultimate Beginner's Guide: http://www.biggerpockets.com/real-estate-investing