All Forum Posts by: Ian Reeves

Also - If you are not already a member, there is a Kansas City Real Estate Investors Facebook group.  I will post a message on there as well:

I can do Tuesday, I could be there around 5:30.  This sounds good to me. 

Did any thing ever come of this?  I am an investor from Shawnee and also interested.  I joined MAREI and have been going to their meetings here once a month for networkign but would like to meet others who may not be MAREI members.  If nothing has been set up yet I would gladly set something up if a few of you can commit to stopping by.  

@Matthew Lockwood, @John Mattox, @Brent Kiger, @Patrick Riley, @Michael Bachmann, @Andrew Dillard, @Marko Cvetkovic, @Dennis King, @Matt Pritchard, @Jason Hawk, @Michael

@Michael Lewis, @Chad Hotovec, @Christopher Webb, @Rob Scarborough, @Timoteo Guy, @Dillon Wadsack

Hello all - I was going to start my own thread but found this and you seem knowledgeable on the subject.  I am looking to grow my business and start a direct mail marketing campaign.  Only issue is that I am looking to invest in Kansas which is a non-disclosure state.  I am currently marketing on Craigslist, but not really sure where to start finding off-market deals.  Any tips on lead generation in non-disclosure states?  thank you in advance!

Ron Kraft of Kraft Law firm is my attorney here in KC.  He is very knowledgeable and specializes in real-estate transactions.

http://www.kraftlawfirm.net/

Ok BiggerPockets members, I am trying to figure out how I can help out someone in need. I have a lady who is in pre-foreclosure, she is two months behind on her payments. I plan to take the property over subject-to. The lady is in her 70's and fell behind on her payments due to some medical expenses. Here is my question. Would it be possible for me to purchase the home, get it qualified as a HUD/Section 8 rental unit and then get her qualified for rental assistance and rent it back to her? I would love to figure out a way to let her stay in her home. I have zero experience in this area and I have no idea how long this process takes or what the requirements are. I will be on the phone with our local office first thing in the morning. I would love to just rent the property back to her, but if she cant make the mortgage I don't see how she would be able to make the rent either and I cant take on that risk. Thank you in advance, -Ian

Sean, I would highly recommend reading the bigger pockets books (The book on rental property investing and book on investing with low and no money down) and spending some time getting yourself educated. I spent about 4 months reading and doing research before jumping into my first deal, and I am very glad I did. That being said, don't fall victim to the paralysis by analysis syndrome! At some point you have to learn the rest as you go. To answer you questions (cop out answer - it depends). You do not need any type of license to get started, but as you grow you will likely want to set up a business entity to protect yourself legally (LLC's seem to be most common and that is what I have). Credits score completely depends on how you plan to finance, but if your credit is bad, its probably a good idea to take a hard look at your finances and get them in order first. You do not necessarily need a lot of money to get started (if you read the book on investing with no and low money down you will find this out) however you need to have a sufficient reserve fund to cover the undexpected. What happens if a furnace or AC unit goes out, what happens if it takes longer than expected to get a rental filled etc etc. If you read those two books you will have a basic understanding of how to invest, how to find the deals, how to finance and the different tools investors use. I am a huge fan of Audible because I can educate myself while I am driving, or at the gym or even while doing chores around the house. If you are like me and have a demanding primary job this is a great way to squeeze more out of your day. Good luck!

Will, 

I agree with @Ralph R. I don't think you have provided enough information to make a decision.  If this is a newer property and the risk of capital expenditures are low, your 10% of rent repair costs might be adequate, but if this is an older property, a roof or furnace will destroy several years of your cash-flow, you may want to factor in more like 15 or 20% for maintenance/cap ex.  Also if you have not already, I would try to confirm your insurance number with an actual quote as well as the property taxes.  I made the property tax mistake already and trusted the realtor only to find out at closing it was $1,000 more per year.  Also, is this property currently rented or move-in ready?  You may have some minor rehab costs or holding costs to get it rented out and stabilized.  Here is a link to a great free online calculator I have been using if you are not a pro-member:

http://www.calculator.net/rental-property-calculator.html?cprice=175000&cdownpayment=25&cinterest=4.375&cloanterm=30&cothercost=3000&crent=1700&crentincrease=3&cvacancy=10&cmanagement=10&ctax=2064&ctaxincrease=3&cinsurance=984&cinsuranceincrease=3&choa=0&choaincrease=3&cmaintenance=2040&cmaintenanceincrease=3&cother=&cotherincrease=3&cknowsellprice=no&cappreciation=3&csellprice=200000&cholding=20&csellcost=8&printit=0&ctype=&x=40&y=13

@Carlos Rodrigues - Another potential option is to use owner financing.  If you read @Brandon Turner book on investing with low and no money down, that would be a great start to get a broad understanding of your options.  I would do some research and see if you have any local real estate clubs or landlording meetups.  As a younger guy myself, I have found that most of the landlords in my area are older and are very willing to help out a younger guy just getting started.  If you start networking and talking with people you just might find a deal falling in your lap.  There are lots of landlords who are looking to retire and don't want to deal with managing tenants, often owner finance can be win-win.  They get the benefit of continued monthly income (better tax situation for them) and you get your first property without the restrictions of bank loan terms. Good luck!

Carlos, I just went through this exact situation myself. I had quite a bit of money in my 401K so my original plan was to use a 401K loan and put 10% down on my first duplex, then use an FHA loan the second time around. I made it through most of the loan process and my loan officer called me at the last minute to tell me I would either have to put down 20% or switch to an FHA. I ended up switching to an FHA loan and just putting 5% down. What I didn't realize (and my loan officer didn't either) was that using a conventional loan on a duplex is considered two residences (10% on each side = 20% of the total price). I even had the property switched to one tax id and they still wanted 20%. I really wanted to stick to duplexes because they tend to cash flow better, so I was struggling to figure out how to stick to my original plan of purchasing one property per year. I was not going to be able to save enough to put 20% down on a 250K duplex in a year. Long story short I got smarter and started looking into creative financing and ended up buying a second property just a month later using subject-to financing. And I am now working on a commercial deal with a partner and only bringing a little bit of money to the table. So it is possible, just requires some creativity and persistence to push through when you find obstacles. Wish you the best of luck! -Ian