All Forum Posts by: Jason G.

@Jason Gines

How do I go about doing that and finding trust worthy people

I'm 21 years old looking to start my REI portfolio. Currently 18 months into a lease to purchase. Great rental area with rents going for $1,300 per month. I'm approved to purchase the property for $155,000. After deposit and rent payments, I currently owe the seller $148,000. Going into closing, the title company discovered a lien against the property. The seller is working with an attorney to partially lift the lien to sell the property.

This made me begin a search for a “Plan B.” In doing so, I came across a brand new townhome also in a hot rental area. The townhome is $165,000 eligible for a rural development purchase with no money down. Rents in the area are going for $1,350.

My question is, is there any way I could be approved to purchase both? I would hate to walk away from the equity I’ve developed in the lease-option property as well as the potential to rent. But also see an opportunity in the new construction townhouse.

Considering possibly seller financing the lease-option property and going Rural Development as an owner occupied on the new construction townhouse? I would really appreciate any advice!

-Asa

I don’t want to take out any loans.

Just want to get a consensus on how deals are being funded, & which part of the deal? My personal friend will be funding 80% of the cost of my first property. I'll be funding 20% plus any improvements.

Are you guys using conventional loans? Working with friends/relatives? Maybe an investor you recently met? Have you established a syndication? Which portion of the costs are you paying? What about them?

Hello BP! I have been perusing this website, Roofstock, where you can buy properties that are already rented out that have decent CAP rates. This seems to good to be true, what is the catch? Has anyone used this service and would they recommend it? What are the drawbacks? Any insight would be greatly appreciated.

@David Kuhlke just don't get in too deep of water. What is the payback requirements on the HELOC? I am pretty new to general lending, i don't know hard numbers per se, but the HELOC i just looked into required paying back 1.5% of the balance each month. If you make a big purchase, a 1.5% monthly payment may be large, that depends on your finances. I'm simply saying without adequate reserves and a 1.5% minimum monthly payment, a setback or two, something unforseen, could get you in trouble.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $140,400
Cash invested: $40,500

Townhouse: 2 BR, 2.5 BA

What made you interested in investing in this type of deal?

This is my first purchase and I wanted the process to be simple, especially since it is 1,200 miles away from where I live. The property is newer (built 2006) with a near perfect inspection report and in a desirable neighborhood. Most importantly, the property should cash flow approximately $2,500/year.

How did you find this deal and how did you negotiate it?

I found the property through Roofstock.

How did you finance this deal?

Convential Loan with 25% down

How did you add value to the deal?

No value added. However, I believe it can be converted into a 3 bedroom. Before I sell the property, I will investigate the possibility of converting it to a 3 BR.

What was the outcome?

Waiting for a tenant

Lessons learned? Challenges?

Just as any home buying experience, there are a lot of moving parts. Since this property is out of state I had to rely on the team members to get their piece completed. Overall, the process worked fine with a few hiccups.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Roofstock was a good resource and the mortgage company, Cross Country Mortgage, was easy to deal with

@Michael Noto @Cameron Tope @Todd Goedeke @Patrick Menefee @Cherie Orellana @Jason G.

Feel free to call me an ignorant kid, and don't get me wrong I totally asked for the opinion of all you guys and I appreciate the time you took to leave your feedback. But I've been told you can't take the advice of everyone, and it is best to pick one person you want to be like and mimic there investing style to get to where they are, where you want to be. Don't get me wrong I still filter through different people's advice and pick and choose. 

However of all of these answers, the one that most stuck with me was when Pat mentioned "the story of the warrior who burned his ships so his men had no choice but victory". I'm 18 years old. I've become obsessed with real estate over the last 10 months and truly believe I can build massive wealth through this vehicle. Don't get me wrong I know I have a lot of work cut out for me. But if that means freedom sooner rather than later, count me in.

With that said, I hear a lot of people saying diversify, diversify, diversify! However I don't want to put my money in stock, bonds, mutual funds, etc. when you plain and simple don't have any control over them. The only 2 people I know that are against the 401k are Grant Cardone and Robert Kiyosaki, as many of you may be familiar with their accomplishments. Anyway, I'll try to wrap this up... Contributing to a 401k is to me throwing up the white flag and saying I'm okay with retiring at 60. Even if it does mean some serious compound interest, (trust me, I do think they can help build some serious wealth, and a 401k is a far better option that no retirement plan at all). I would rather have to build my portfolio in solely real estate even if it means failing over and over again, until I finally get it right. People will always rent, and people will always need a house to live in, period. And if I can't figure out and master this game in 20 years and then take my own retirement plan, through the passive income I created, than you guys can feel free to call me an idiot at that point. 

I would rather plan to work till I'm 90, with a chance at retiring at 35-40, than plan to retire at 60 with no chance at retiring at 35-40. It's a big leap. I have big goals. I want to make a lot of money to do insanely cool ****. Thanks all, reply if you want.

Sam Giberti

Hello BP, 

I currently owe $300K on my mortgage and the value of my home is $400K. My current mortgage interest is 3.375%. 

The loan company I'm working with will offer a total of 95% LTV (combined mortgage and HELOC), but the catch is that they want to charge me 5.75% interest on the first mortgage. However, I would then have an $80K HELOC to play with.

Is it worth it to lose out on the 3.375% interest in order to do this HELOC deal? The lender said I can refinance after 6 months to market interest rate.

Thanks, 

David

I’m going to keep this short because I’m at work. I will either graduate from UT with in MBA or work for a RE company after full time after my first year of college. Depending on whether or not I think it is worth the buck. Anyway regardless, somwhere along the line I will have to make a choice as to whether or not to put money into a 401k.

If I were to do so, it would most likely be a Solo 401k, and if regular 401k. I would eventually borrow from it to buy RE.

My question is: is it more beneficial to take the Company Match 401k plan and borrow from it later on. Or trust that I will get very wealthy through re, which I am a firm believer I will, and use the capital to invest in RE now, instead of tying it up for X amount of years, like so many Americans do. I think having someone else manage your investing is personally not a good move. But I wanna hear what you guys think!!

Thanks BP

Sam