All Forum Posts by: Val Csontos

@Chai Sag , IMHO @Ned Carey is right calling the "strategy" of doubling your money in two years, in Real Estate a speculating. When you have no scientific data to back up your market behavior predictions, but rather you heard some thing from someone, that is no different from the Dutch tulip bulb "investors".

They had also called themselves investors at first, because money was coming AND doubling in few short months for ALL of them who participated,  but when the bulb market crashed  they all lost their money and even their farms. Later on when the mess was all over these people were called Speculators. And that is what we call it today as well.  Business 101.

@Serge S. your concerns about FI (foreign investment), will be soon eliminated, as the US Government's threshold for FI is about to be passed and at that point we will see policy changes. (like mid 90s) So if you are into large projects (120 units and up) it might not be a bad idea to save you down-payment right-now. 

@Vinny Gaines  Last time I toke my realtor's advise/input on a rehab i worked my ..ss off for 4 months and broke even on the property. And  my realtor friend made two easy commission(buy/list) of about $22,000!

And he was a good friend was not out there to screw me. I did take a while for me to realize that he is not a rehab expert rather a sales expert! 

Good luck to you be persistent it does pay off soon!!!

@Chris Duzan Don't get discouraged, use creative technics to buy with little or now money down (OPM) at the first! This way you won't be so concern about your ROI. I have purchased many properties on about 15-20% discount of FMV with "infinite" ROI since it was zero out of my pocket.

     In the late 90's early 2000s I used to buy properties that only cash flow 50$/month but it did not cost me a dime to put down and in cases when i borrowed my buyer agent realtor's commission on a 60 month zero interest and used it as closing cost,   i walked a way from settlement with it little bit of extra cash.

    If you are located in a stable market with no population loss predicted in the next decade (us census has very detailed and very educated forecasting models for most zip codes)then each month your tenant pays down your mortgage will count as money in your pocket. Rental property will present you many different "hidden"benefits but you almost have to own it to know it. 

In my case the above mentioned properties ten years later close to doubled in value and the rent went up about 80% and now 15 years later FMV tripled and rent is doubled and now the same house cash-flows about $800-$1000 per months EACH even with an occasional furnace/roof replacement.

Of course now we don't take as much risk as early on but when you start out IMHO the only risk you have is that you never get started because of your 5% ROI worries.

Good luck to you!

Your local small bank won't really care (if it does look a round for a different bank with few branches only). Our said they are fine either way because they want personal grantee from us anyway. Make sure you maintain relationship with your local bank, as it does pay you back many-times over in the future!

 In our case they let us do cross-colletarization (no money down deal since we colletarize the down payment in the form of equity in other property instead of putting cash down on some deals.)

Good Luck!

If they have good to excellent credit scores, we don't bother calling. As they won't have  an issue for rent payment. Also if they hold a security clearance work for Military or  NSA DoD etc.... It is not unusual around here. 

Also you can call around until you find a realtor (buyer's agent) who will lend you his/her commission on a note for say 60 months, this way you can use the commission to towards settlement expenses.

make sure:

 you are persistent, (toke me about 19 phone call to find a realtor like that) most of them laughed at my question) 

and make sure you have enough rent to cover these monthly payments in a form of positive cash flow! 

Creativity = less cash required to acquire more properties

@Chad Duncan Here is what we have done in the past in similar situation: 

My small bank around here will lend you up to 75% of the APPRAISED value on an investment property you are about to purchase this could be for example "House B.

BUT in order to be able to cross collateralize the "down payment" (25%) on a different property your original house we could call it: "House A" have to have at least 50% equity.

Here is an example: say you are buying "house B" for $75,000 (and it does appraises for $100,000 )

You will need a $75,000 mortgage to pay seller and a $25,000 collateral for your small local bank in lieu of Cash down payment.

Than let's say you have another existing house: "house A" and it does upraises for $100,000.

In order for the bank to accept the equity in "house A" as collateral for the $25,000 down-payment on "house B" you can not have more than half (50%) of the appraised value collateralize BEFORE settling on "house B"

This means: if your existing "house A" worth let say $100,000, now you can not have more than $50,000 mortgage on it BEFORE you settle on your new "house B" purchase.

Because generally the policy of most small banks is:

They do not allow your to exceed the 75% Combined Dept to Value ratio on any properties anytime they have a mortgage interest or collateral on.

So the bottom line is: if you currently own a property that is only 50% mortgaged then more than likely you can use that house to buy the next one for zero cash down! Also if you purchase the second house using the above technics and at say you located a deal where the property values are : 50 cent on the dollar (not impossible just take many hours of research) than you can do the same exact thing again and buy a third house "house C " and using the second house "house b" for the down pay. As you can see this technics can allow you to buy over and over with little or no money as as long as the equity is there.

Good luck, and Happy Investing!

@Ilona Kovacs 

       The US Census Bureau is a great place to start. Their website at first seems very complicated, but don't give up! it is well worth it to be knowledgeable about census forecasts  (I believe it has helped me to save $$$$ in appreciation! I generally look for 1-1.5% continues population growth for at least the past 10 years. They also have some forecasting data(estimates) for next 5 or 10 years, and they seems to be accurate at least for our investment areas!

    Once you had find an area with a healthy population growth you need to cross check that with https://www.crimereports.com/ to find the  "gems in the rough" (stable areas with low % of violent crimes.) and now you have some areas to "farm" That is where the real work just begins with foot on the ground driving by, knock on door etc.......

Sok Szerencset Kivanok!

@John Thedford I also read that book! It is one of the best book if you would like to take your RE investments from Ma and Pa's to the next level. I last time read:

(like the 5th time so far)  

 that successful investors are aware of the market cycles and time to time when conditions are such they pay down their dept, then when dept gets below a certain level, they "pull money" out to re-invest it as need it for growth strategies.

Ps. Our of curiosity i had goggled on the investor from the back of the book from state and sadly it turns out she had over leveraged her self and the bank foreclosed on close $8Million of her mortgages about 3 years ago.