All Forum Posts by: Jody Sperling

Leverage is great, and you want to be careful about overleveraging. If you have most of your HELOC and savings invested in the primary house and the rental, you may want to build some equity and pay down the HELOC a bit before buying again.

The exception to the rule would be if you can find a house that you can buy in terrible condition, fix it up, and refinance your money out of. Some people are able to increase their portfolios by a dozen properties or more each year, just by focusing on this strategy. But it can't be done without buying rundown properties at extremely undermarket prices.

Also, you have to seek out private money. I know someone who bought his first rundown property, with a mix of personal and borrowed funds. He contracted 25k from a friend. Then on his most recent property, he borrowed 80k, 30k from one friend and 50k from another. Once the work is complete, he'll refinance the house and pay the private loans back. He can do that because the house he bought cost him 31k, but its ARV will be between 140k and 175k. Even leaving 20% in for equity, he'll most likely have a bit of leftover cash from doing this deal.

That's by far the fastest way to scale. Best of luck.

Thank you for your service! While I never bought when serving, I can assure you, managing a single property from distance should not be a deal breaker.

As long as you are careful about who you rent to, and as long as you work with a real estate agent who is willing to screen tenants or a property manager, the number of tasks that require you to be on sight for a remote rental are few and far between.

In fact, everything can be done remotely, and you'll want to ensure that you have a network of contractors you can call if the property needs work at any point. One of the many great benefits of the military is the housing allowance, and if you use it to accumulate rentals along the way, you'll be a wealthy man when you return to civilian life. Best of luck!

They only care that you have the cash. For example, I'm closing on a house in which the primary funds are coming from a private loan. If the bank is holding the loan credit score and DTI are really all that matter.

All good questions and many financial institutions vary in how they address your questions to some degree, but I'm a HELOC fanatic and all my income flows through one of these bad boys. Double check with you specific bank, but these are generally how banks treat your questions:

1. You do NOT need to season money from the HELOC in your bank account. Simply transfer it when needed and write your check. HOWEVER, to make a HELOC superpowered, put all your money in it. Every dime, every time. By doing that, you get a % return on investment of whatever amount of interest you avoided by drawing down your HELOC balance. We've set it up so all our bills pay on credit cards and all our income goes into the HELOC. We pay the CCs on the due date, in full to avoid interest there, but for the 30 days the balance is on our CC it is interest free. I could nerd out and show you our ROI in interest avoided, but I trust you'll take my word for it.

2. Your lender will always factor in minimum payment only obligations to DTI, so they will factor in the whole lump of debt, but the monthly payment is how they consider the % of income to debt.

3. Unless your bank is vastly different then all those I've ever worked with, they will not consider your rental income until it has shown up on two consecutive tax returns.

4. My bank allows 45% DTI for investment properties so I know this one varies based on the institutional appetite for risk, but my guess is you were running your numbers thinking the rental would count as income. You may be more in the 47% to 53% range, but don't fret. I bought two houses with private money and my HELOC cash this year. Once they were fixed up and rented, the bank gladly refinanced, allowing me to pull my cash out. In other words, focus on rehab deals and build a network of lenders so you can detach from the banks as much as possible.

Best of luck!

The ReStore can be hit or miss, but when it's hit, it's great. Offerings tend to be retro. Mostly the furniture is cheap, but sometimes they sneak in something that's too pricy.

Facebook marketplace is the same. The only furniture in my house or any of my furnished rentals are used from ReStore, Goodwill, FB Marketplace or garage sales, except for mattresses. Used Mattresses seem nasty. Just my opinion.

Good luck!

What is your goal with direct mail? Do you have a monthly budget? There are resources like Data Tree that have great targeting features and allow you to mail yourself, or you can get more inclusive products like Vistaprint. Then, depending on your region you could try something like Valassis or Mailbox Merchant for greater market saturation but less personalization. Per piece, landed, you should expect between $.50 and $.22 for a postcard.

Most people quit on direct mail too quickly, but it can be expensive before you see the return on investment. Expect to pay at least $500 a month if you want to see results. These are just generalities, but I hope it provides some context. Best of luck!

Seth, first off, cool to hear from someone living in New Iberia. I'm a huge Dave Robicheaux fan, and he's from there. 

Anyway, without a little more detail on why your credit isn't good, it's hard to push you in the right direction, and without some more detail on the condition of the foreclosure, recommendations are tough there too.

If you've run the numbers though, and the buy is a slam dunk, grand slam, touchdown and extra point, you should be able to find hard money, but your rates will be exorbitant to cover for your borrowing history. 

Start looking on Facebook, as you'll typically find local real estate investor groups on Facebook, and someone there will be able to aim you in the right direction for you region. Best of luck!

Direct mail is about numbers and the most common thing I see with those who fail versus those who succeed is tenacity.

If you're going to send mail it doesn't matter as much what the piece looks like as it does the volume and repetition that you send in.

Post cards are just as effective as letters. Volume and consistency are key.

If you send out one batch of mail and get no responses, that doesn't mean direct mail doesn't work, so make sure to commit the cash and time to mailing that is needed, and best of luck!

Apply for a credit card, even if it's a secured credit card, you'll start your credit history. Research velocity banking. starting investing at your age and with a sound grasp of velocity banking, you will crush it in the wealth-building category.

But ultimately, with the kind of cash you have and a cosigner, you shouldn't have any issues with a bank approving you for a loan. Best of luck. You'll hear it a ton, but I'll say it anyway: Wish I had started investing at your age!

Real estate has a sneaky way of absorbing all your affection and interest in the end, so be prepared. Consider the word you used in your subject line, and reframe our thinking on real estate investing now: This isn't a hobby and can't be. It's an investment that must be viewed as a business.

If you invest as a hobby, your tenants and/or portfolio will suffer and that will be reflected in the difficulty you experience in doing the work. By all means, it doesn't ever have to be your 9-5 if you love Computer Science, but you still have to view it as a business and your tenants and/or buyers as employees.

Aside from that, you're in the right place. Spend time reading on the forums, read the blogs, professional and member blogs alike. Listen to all the various BP podcasts. My favorites are the original real estate podcast and the money podcast with Mindy and Scott. Check out Seth at RETipster. His videos are among the best in the business.

But in the end, there's no substitute for doing. If you can manage, save up enough for a downpayment and buy a property. The house hack is a great place to start. You can rent a house by the bedroom, or start with a duplex and live in one side. Your tenants will cover most or even all of the mortgage, and you can start to build equity. 

Best of luck as you venture on!