All Forum Posts by: Jack Medford

From the PM's I've talked to, you generally want to buy in an area where you can attract tenants with income that is 3X the monthly rent (2.5X on the low end). This is a general rule, as people make it work in lower income areas, but the headaches are a lot less if you can find these neighborhoods. 

Websites like http://www.city-data.com/ can help identify these areas. 

My pleasure Dylan. I'm actually a little envious of your position. I wish I had the drive and vision to get started as young as you.

I don't know if it is the best way, but it can certainly help... Posting here consistently on BP about the opportunities you are finding. Have a signature at the bottom of your posts that give contact details. It would be best to have a company name so you look more official, but not necessary as the deal will speak for itself. Either way staying consistent with posts and deals will bring investors to you. 

Start attending meetups in your local area and introduce yourself exactly as you did here. Most real estate meetups happen in the evening on weekdays, so they shouldn't be an issue with your schedule. If you introduce yourself in a similar manner to this post you will likely have a lot of people giving you encouragement. If they see you coming back time and time again they will start to take you seriously, and some may even offer you opportunities to learn before having your license. 

There is a lot of grunt wok in a successful real estate operation, so being willing to do that as a stepping stone might get you a foot in the door. At the very least, showing this type of motivation at such a young age will turn heads. 

Best of luck.

@Jason Grimm the idea only works if you've got a partner you are forming the LLC with. I had bought a property cash and rehabbed it. He was looking to get into buy and holds, so we formed an LLC with the purpose of purchasing some. Since I had already sunk all my capital into this one property we considered that my capital contribution would consist of the property.

Essentially, we decided that he would put cash into the company at the amount that totaled half the value of the property. The property appraised for $65k, so this amounted to $32.5k. However, instead of him just putting up cash, we decided to put a traditional loan in place to preserve more of his capital. This got me almost all of my capital back (not quite a true BRRRR but close) while still leaving me 50% ownership.

Hopefully this all made sense. If not feel free to PM me for more details. 

I'll second what @Andrew Syrios said and suggest partnering up if you can find someone you trust. I ran into the same problem as you, but then found someone with capital who felt nervous about jumping into real estate. He saw me doing deals and wanted in, so I sold one of my properties to the LLC we formed, while also buying another with his funds. Selling the property I owned to the LLC we formed gave me some of my money back, while also giving me 50% of the cash flow of that first property.

Now we are purchasing our third property for a total of 7 units. Instead of owning 100% of 2 units, I'll have 50% of 7, so effectively 3.5. 

As much as I like the partnership I've entered, I commend you for your creativity. You've found a lot of ways to keep moving in real estate. It is really just up to you as to what path you'd lie to pursue. 

@Abdul Mubeen This is a hard one to answer without knowing more about your current situation and goals. What is your current rent vs what would your mortgage payment be on an owner occupied? What is it that is motivating you to pursue an owner occupied vs continuing to rent? Conversely, what it is that is motivating you to purchase a rental instead of an owner occupied?

Sorry for all the questions, but to properly answer it seems a bit more info could be helpful. 

Just going to throw out there that you can get a commercial loan for a 2-4 unit. I've done this multiple times. The reason being my LLC owns the properties, so it cannot be a personal loan.

Whether you are going small or big, you can still qualify for a commercial loan. However, the bank will likely require personal tax returns and a personal financial statement, since you will be acting as the guarantor of the loan. As @John Warren said, they are more challenging for starting out, but certainly not impossible. If you've got a good deal you'll be good to go.

I have heard great things about Premier Point Realty, specifically in the Milwaukee area. I have yet to get my license, so I can't vouch for them personally, but they are well known with the Milwaukee REIA group. Worth checking out at least.

My pleasure @Igor Fabyanchuk. If you end up posting an analysis you've prepared feel free to tag me. I'll be happy to give my two cents.