All Forum Posts by: Jan Kerr

@Ryan Ralston Hi Ryan, Welcome to BP! It sounds like you are off to a good start. Congratulations on being able to save up that operating capital. You are ahead of most newbies in that regard and it will make things a lot easier for you than most. Be smart about how you use it. Leverage it as much as possible and stay safe. Please visit my profile. I'd be happy to offer you some help as you get going.

@Ben Feder I just sent you a message so we can connect.

@John Thompson Jermaine has made some good suggestions and given correct insight about seasoning, etc. Hard money can get your foot in the door but their high rates and fees can and will eat up any profits really fast. 

I suggest finding your long term financing first. Meaning the one who will refiance your property after the "Seasoning Period". Every lender is different and some have longer or shorter seasonoing periods that average. Start shopping for that long term financing now to know who has the shortest seasoning period and all of their qualification processes so you know whether or not you'd qualify before to get into any deals with a HML

Do not estimate your ARV on a deal. Get real comps and determine the real ARV. Don't assume your suubject property will always be worth the highest comps unless its truely apples to apples comparisons.

Start on learning the cost of rehab by getting familiar with the cost of materials. Study the cost of the things you know you have to repair or replace by either visiting the sites of the local big box home improvement stores or visiting the stores if you have time. That way, later when you do get bids from contractors for the work, you can subtract the cost of materials from their bids and know how much they are charging you in labor. That helps idetify contractors who would try to gouge you on labor. Let me know if you need further clarification on what I have said.

@Tee Grange Start by checking into what is required by the School to become officially designated as student housing. Some schools own a lot of the housing, but they also help promote and recommend off campus housing when it has been through their inspections and passed their criteria. Then look for what you know you can bring into compliance with their demands.

@Ben Feder Hi Ben, 

There are some Hard Money Lenders that will lend soley based on the equity in the deal and include rehab costs up to a total loan amount of 70% of the After Repair Value of the proeprty. In some cases that would be enough to pay for the property and the rehab. HML's usually charge points up front and of course you'd have to pay your own closing costs and sometimes those of the seller if the seller is distressed. In that case you'd need a funding partner who has enough to cover those costs and expenses who would be willing to partner with you for a % or split of the profits you realize when the property sells. This could be a friend or family member or a stranger who has money to invest and feels comfortable with you, your project and your numbers. Your presentation of your project will be the deciding factor to them.

Investing long distance is only diffreent in that you don't have the luxzury of stopping by to check on the progress in person, but there are ways to check on it remotely. You will need to build a power team on the ground where the proeprty is located to accomplish everything that must be done in person such as renovations and project oversight and management.  

I am willing to offer you the same free 90 minute mentoring session that I offered to Ather above. Let me know if you would like to take advantage of that offer.

Hi Ather, 

Your comment about San Fancisco's micro economy is an accurate statement. Every metro area has its own micro economy and every one is different from all the others. When you hear the news media talking about a coming recession, take all of that information with a grain of salt. They are generalizing and trying to sell news. Fear sells news. They may or may not be trying to make people think that the whole country's housing markets are all on the same cycle which they are NOT. They may be mis-informed or just, summarizing for breveity and convenience to make sound bites sound good.  

Flipping and BRRRR are good strategies for that area. Prices being very high there may scare off some investors. Financing is available one way or another everywhere becasue prices are relative to the individual markets and lenders who work there know what the numbers are, so that is not genreally a problem. You will need to have some operating capiital to take care of earnest deposits and more for down payments and holding costs or partners who are willing to cover those expenses.

I can show you where to find statistical information and data to better educate yourself on any market. If you'd like a free 90 minute mentoring session, please feel free to view my profile and reach out to me if you want to set that up. 

@Ruchir Kaul  I would do both and shop for loans. You may have good luck with a lender who is national and operates in all the states you want to invest in, but you are likely to find competitive terms from a local lender where the property is located as well. Not all lenders are the same. Go shopping and ask a lot of questions!

@Bud Gaffney I would get the 30 year mortgage and use the extra cash flow to get your reserves up to where you want them on this property and then start using the extra cash flow to invest in more properties. You could alternate and do both. One month set money aside for more investing and one month pay the mortgage down faster if you like. I always enjoy paying extra on a mortgage than the minimum amount due. On my copy of the statement I write "Take That" and laugh becasue I know I am taking interest away from the lender every time I do that. Congratulations! We are always here if you have any more questions!

I have really enjoyed reading everyone's comments and suggestions for @Jeff Byrne in this thread. I have had literally over a 2000 students over the past 20 years and most of them have had the same negative response from family and friends who just don't have the entrepreneurial spirit or the vision to understand these dreams. People may love you and they don't want you to fail, so we can appreciate that, but the only way not to fail is not to try at all. That is completely unacceptable for anyone who wants to grow and become more and do more with their life. This business is the only one proven time and time and time again to create true long term wealth. What could possibkly be better than letting other people buy your properties for you so that you can retire in comfort and do the things you want to do later in life? 

Yes, there are risks, but anything worth doing has risks. Sure there will be learning curves and maybe even some losses, but if you keep going you will always recover and learn something in the process, making the mistakes valuable too. 

My advise is like many others have stated. Don't take what they say personal. Stay motivated any way that you can. Get a mentor's help and guidance and keep moving forward with your plans. Revise your plans as needed to stay ahead of market shifts and make your adjustements to stay safe. Screen your tenants thoroughly and interview your property managers carefully. This is an adventure, not a job. Making money is real estate is the most fun you will ever have making money. 

I've used all the investing strategies over the years except owning major commercial, which I am in the process of implementing now by buildinig a large, senior, (55 and older) luxury apartment building, using a successful model. I could not be more excited about it. My mother was always supportive and has even partnered wiith me, but my huisband of 34 years has never taken an interest in my investing and has even been negative about it at times, although he lets me use some of his resources once in a while becasue he trusts me and knows that I know what I am doing. 

My point is that this is your life and your dreams and no one else can live it for you or hold your visions as their own. Be smart, network, learn from others who have done it, apply lots of logic and common sense to your decisions, plan and prepare well and then go for it! Never look back or second guess your decisions. You can't change the past so let it go. If you make a mistake, find a solution and fix it. Moving forward at all times. Baby steps can take you very far, so take those baby steps, get out of your comfort zone, get creative and do not allow anyone to box you in with conventional wisdom or standard practices. 

There is a lot of support here for all of you. Take advantage of it and most of all, enjoy all of it! I always tell my students who are being hassled by family about the risks, or who are struggling to juggle this with a day job, to treat this like an inside joke. When you are needing support, go into your own mind and remember that this is your way up and out of another unfavorbale suituation. If you really want this, you will find a way to make it happen. 

@Jasmine Wevers As one of the mentors who has worked for numerous nationwide seminar companies who sell these coaching, mentoring and training/education packages for over 20 years I can tell you that I personally think they are overcharging everyone. They ask that much becasue the cost of getting peole into those seats at their free seminars is very high. Most of the time the end results is heavy telemarketing to everyone who did not sign up for more training at the free seminars and to up-sell those that did. As a mentor I always gave my best to every single student. I created a lot of curriculum myself that those companies used with my permission. I always taught much more than the curriculum dictated because my goal was to help every student succeed. I quit more than one of those companies over coaching department managers refusing my request to continue helping a student beyond what they paid for, when I felt they needed it. 

Most of the mentors were dedicated to the student's success, but upper management's attitude was often a whole different story. When you look these companies up on the BBB website, many of them have poor ratings. The heavy sales pitch was usually made by non-investor sales people in cubnicles on a sales floor promising more than the coaches and mentors could or were allowed to deliver.  I was constantly butting heads with sales people and upper management for taking a person's last dollar to pay for the education and leaving nothing for them to work with. My pet peeve was when they convinced people to max out thier credit cards and take on a bunch of new debt through new credit cards in order to just pay for the "tuition". 

Ultimately, people do benefit greatly from mentoring and if they are not over paying for all that overhead, the education is well worth it, BUT it all depends on how much time, action and real work the student is willing to put into their own business. I can give assignments all day long designed to help a person learn and succeed, but if they don't do the work, they won't accomplish their goals. I can't make anyone get up in the morning. Please feel free to view my profile. Anyone who is intereseted is welcome to contact me and connect with me for a free 90 minute, real, one-on-one telephone mentoring session.  I did not ever work for Robert Kiosaki or the Rich Dad Poor Dad Programs, but I have read a lot of their materials over the years. There are a lot of gurus out there.