All Forum Posts by: John E.

@Bryce Hinton Did someone say NOVA????!!!!!!!!!!!!!!!!!!!!!!

I'm living in Falls Church, so we're literally neighbors! Wow! I love seeing locals on this site man! It's a double whammy because you're also a teen (I'm 15) as well! 

I'm glad to hear that you're passionate about real estate investing! You can definitely get started in real estate even if your debt to income ratio isn't fantastic. The traditional method of getting conforming loans from a big bank probably won't work right now, but if you've got will power and a marketing budget you can start doing some creative deals. 

The barrier to entry in creative real estate is lots of education and some cash.

Make sure to educate yourself first! BP is a great place to do that! And it's free! 

There are so many podcasts, books, blog posts, threads, and people to gather wisdom from! Make sure to put in the time and make an effort to contribute and reach out to people on this site though. Make sure to read, listen, learn, and contribute!

You really do get out what you put in! That's not just true on this site, but it's a rule of business! Your rewards in life will always be in direct proportion to your contribution to others. Many people on this site for instance are wholesalers. They provide what I consider to be a great service by helping someone in a tough spot sell their home and provide investors with a good deal. Contribute! Contribute! Contribute!

Go to a local REIA in the DC metro area and try to find a local mentor who will show you the ropes for free! Don't fall for the guru trap of unknowingly signing away your first born away to some slick talking sales person!

I can tell you're excited and passionate about thus- that's good, but considering we're young fellows, we've got a lot in store for us on this journey. If you never give up, I'm sure you'll do well in this business.

@Ned Carey is definitely right. Most investors buy into what Jon Holdman calls "phony cash flow" and that is that your cash flow will be what's left after you pay the mortgage, taxes, and insurance. Ha! 

The only thing you'll get investing like that is foreclosures and a bunch of sleepless nights!

The 50% rule Ned mentioned is the idea that 50% of your gross rent is probably going to go out the expense column. This does not include debt payments!! 

So, if your rental provides you with $2000 in rents then at least 50% will go out for expenses in the long haul. You may be thinking (and I did too!) that it sounds a bit much, but a lot of that money will be needed later for big ticket items like roof repairs. Always remain prudent and mindful of future expenses! Saving for a rainy day is taken literally by a lot of landlords!

Anyways... Now that you have $1000 left a month then you have to factor your financing. So if your principal and interest is $700 a month then you have $300 in NET cash flow!

BTW... Keep several months of reserves to cover your mortgage in case of extended vacancies. 6 months is a good bet.

Another BP rule you are going to hear a lot is the 2% rule. It states that your gross rents should be 2% of your purchase price. The way to go about buying properties the right way is to find out gross rents in your area and determine a price based on that. So if rents for a duplex come in at $3000 dollars then your target price should be 150,000. 

However, in many markets the 1% rule (same premise) is probably the only realistic rule. In this case the $3000 rents merit a max property purchase for $300,000. I'm in the DC metro area (you're close by too!) and property values are more inflated here, as you probably know, than a hot air balloon! 

Hopefully that helps!

@Jason Smith Welcome to Bigger Pockets Jason!! 

Multi-family properties are a great way to live for free (if you don't mind living next to your tenants) and build wealth. @Brandon Turner will be the first to tell you that. I love his article on "hacking" your housing to get paid to live for free! Read it!

See: http://www.biggerpockets.com/renewsblog/2013/11/02...

Make sure to listen to the podcasts, read blog posts, network, and CONTRIBUTE! I re listened to podcast #50 w/ Mike Simmons today and he made a great point- you could be killing it out there, but if you're not networking you're not going anywhere. SO TRUE!

Ask questions, answer questions, post on the forums and comments, and make an impact in the community. The law of reciprocity is true!!!

Hope that helps Jason! :) 

Yea definitely @Jessica H. ! I agree 1000% that God us all with unique strengths and abilities that are uniquely ours.

I hope I didn't come off as saying you haven't learned it or anything of the sort. Having the ability to sort through and find what our strong points and weak points are is an important skill to have. I've tried to play the guitar (ok, I didn't put in enough effort) and I quit because it was definitely not something I had the aptitude or attitude for. My cousin on the other hand is 14 and just picked it up a little over a year ago. Now he can rock along to any Jimi Hendrix or Beatles song after hearing it only once and he CAN'T read music. It's kind of incredible- he's better than his teacher, so now they just record music. He's learning how to play with his pick between his teeth... In other words, God gives us all different abilities and we need to find 'em.

Just email me and I'll send you the book. :)

@Michael Leonardo Welcome to the site buddy!!!

A favorite real estate youtuber of mine named "MrFlipperHouse" AKA TJ Hines  is based in the Tampa area and specializes in wholesaling. It has great content and it can be hilarious at times. I just wanted to bring that up because I like his videos and he's from your neck of the woods.

see: https://www.youtube.com/user/mrflipperhouse

You've definitely come to the right place to meet with other real estate investors and learn more about the business. Check out the podcasts and remain active on here!

Best of luck to you Michael!

@Ben G. That post is really insightful.

I believe that in podcast 27 the Grotes mention finding the mailing address of the property and sending them a hand written letter stating your intent to purchase the home. That's a cool way to do it.

How stupid! Aren't we a free enterprise, capitalist nation?

@Brandon Turner  They taught me in history class that the cold war was an ideological battle between the free capitalist world and the communists. I always thought we were on the side of the former and NOT the latter. LOL.

Yes, I get that flippers are sort of contributing to the rising prices, but so too are the retail buyers buying personal residences. Investors are all about making profit, but at least we don't walk into a home, and bid it up ad infinitum because we like the molding. LOL. 

People need to understand that investors didn't cause the housing crash. That was the result of easy lending to sub prime borrowers who didn't meet the ideal criteria. NOT the intelligent folks that are running great businesses, improving communities, and changing their lives for the better that I come across a lot on bigger pockets.

@Account Closed Exactly! It's earned income, so there are no funky tax loopholes they're using. 

The thing that drives me mad is that so many of these lawmakers are a bunch ideologues that have never created jobs or started a business. 

This isn't political, it's just common sense. 

He sounds like a creep... You two had a prearranged agreement that he would teach you and you both would work together. He's not being honest and you should find another mentor IMO. 

"There is no such thing as a good deal with bad partners."

~Robert Kiyosaki speaking some truthful words

@Tae Chung Traction REIA always sends me emails trying to upsell me on training.

Meeting.com it is and capital city REIA seems really cool based on what you're telling me!

Thanks!

@Wayne Brooks I must of glanced past your post too quickly. So the bankrate article refers to the end buyer? That makes sense, but I'd still be weary of using FHAs for purchases that don't meet the necessary guidelines!