All Forum Posts by: John Matthews

@Patrick O'Neill Welcome! It's always nice to see more people from Philly join the site.

I would definitely recommend going to an REIA meeting some time in the next few weeks. I too just started getting into REI (reading several books, contacting real estate agents, developing a business plan etc.) but I still felt relatively lost until I stopped into an REIA meeting last week. I met a few solid wholesalers / finance people / investors and I feel much more confident in my direction.

So with all of that said, if you ever need anything, or to be put in touch with someone let me know and I'll do what I can to help!

 Thanks. Would you mind sharing some neighborhoods that you think are worth looking at?

@Matthew Nixon That's exactly right. Though I wasn't thinking it was absolutely necessary to stabilize the property with a tenant (though, obviously that's the point to stop the bleeding).

@Jason C. I guess that's my question - what factors would go into me being able to get conventional financing? Let's assume that I'm an ideal lendee (good credit, low DTI, etc.) but I have no experience in this field. Why did you have trouble refinancing?

@Jon Potter that's awesome, congrats. I know you aren't counting on appreciation, but what do comps in your area look like? I know everyone's got their own strategies - have you considered taking out a HELOAN/HELOC after renovations, then taking that money and starting over again with another property?

Secondly, if you don't mind, in what area is this property?

Best of luck and welcome.

Hey all - One of the strategies I'm looking at is getting a construction loan for a distresssed property (close to 100% of the purchase price / 70% of ARV), fixing it up, then refinancing to pay the private investor, and ideally cashout my money into fixing up the property.

That said, having never done this (though I believe plenty here have) what  issues to I run into with the refinance? Ie. under what circumstances might I be stuck with the private money loan? Just trying to understand my risks going into this.

Thanks!

Sounds like you might need to partner and/or take a family/friend "gift" if you really need to get started immediately. 

If you have money, you just want great (infinite) leverage then you could consider purchasing a distressed property (conventional financing, however you'd like) fixing it, then getting a HELOC/HELOAN for the new appraised value, to get your cash back out. That's what I'd like to do, but I've got negative experience in that area, and don't quite know where to start.

@Anthony Martin Where else are you advertising? Have you tried taking out an ad on Facebook? Brandon Turner talked about the success he's had using that on a recent podcast.

Do you participate in a local REIA? That might be another good place to start.

Secondly, what justification are you using that the rent is appropriate?

@Nancy L. I'd be really curious to see your numbers, if you're open to sharing. That's exactly what I'm looking for.

@Andrew Syrios @Joe Villeneuve For me I'm looking for more than 20% - Indeed, 16% is better than the stock market on average, but in order to justify the additional TIME investment, I'd like more like 20% (as a starting point). Especially since I can't claim most of the additional tax benefits, as this will be my first rental property (ie. passive income source) and due to my situation, my tax bracket is pretty low (soon to be wife is still in school = no income)

Thanks @Account Closed that helps. I'm happy to spend time finding the right property, but having some idea of what is realistic will help me determine my strategy.

Anyone else have any thoughts?

@Kevin Nichols Thanks. So you're looking at 2% properties. My concern is, staying out of D or even C neighborhoods, I don't know that I can find 2% properties in my area. Though, that's a question I still haven't been able to find an answer to. I'm fine with being patient to find one, but if they don't exist, I need to change my strategy.