All Forum Posts by: John Barrett

@Aqeel Muhammad I have definitely found having a solid W2 job has made investing in real estate easier. Specifically with regards to getting conventional financing.

There are many creative financing methods as well but I see starting with a low down payment option on an owner occupied property as the easiest entry point into real estate. Combining this with a house hacking or starting with a small multifamily could allow you to lower your monthly expenses and boost your saving for investing.

Having stability in your personal and financial life will allow you the flexibility to work on things you are passionate about. Life’s a journey and there are many ways to get to where you want to be. This is but one of the options available to you.

John

@Alvin Uy we used to be covered by Geovera for our rentals but switched our coverage this last year due to getting better rates and terms. I don’t remember the other name that we switched to but they were the other major player. Lloyd’s of London also offered insurance but were slightly higher priced.

Our personal residence is covered by Safeco who offered best terms and pricing when bundled with our other insurance. This is always dynamic so you just want to make sure your broker is consistently (for us yearly) ensuring your policies offer the best coverage and terms for rate.

Best of luck.

John

@Alvin Uy I think about the cost of the insurance in comparison to how much equity you have in your properties.  We have seen large growth in the value of our portfolio so protecting that value with insurance makes sense.  As such, we carry earth quake insurance on all our rentals along with loss of rent provisions.  We went through a broker and the rates were expensive but not terrible.  There are a lot of different major companies selling insurance policies.  If you are concerned about any specific one, you could always move your coverage to a different company.

Insurance is simply a means of transferring risk that people do not want to accept.  There is no universal right answer, just like investing, everyone's level of risk tolerance will be different.  All you need to do is determine your level of comfort with taking on the risk of loss from an earth quake.

Best of luck,

John Barrett

@Aqeel Muhammad First off, congratulations on graduating.  Secondly, I would suggest you think about going about this slightly differently.  I am not an agent nor do I work in the real estate industry however,  I am a real estate investor.  

I would suggest that you look at getting the best job (regardless of industry) and use that to generate a good income by which to build your financial reserves from which to invest.  There are many resources like BiggerPockets that you can utilize to gain and grow your knowledge and skills.  Your learning does not have to come from specifically working in the industry.  You can also get your RE license while working a full time job.  This will allow you to grow your real estate investing as a side hustle.

Best of luck in all your investing.

John

@Corine Rosado I think the majority of people on BP are going to advise you not to go the mentor route just based on previous posts I have read.

Personally I would start with the local meetup groups. Fixated on Real Estate is a really big one in the area that would seem to match well with the model you are trying to emulate. Start there and network with folks as this may lead you to other options/strategies that you haven’t considered.

Ultimately, if you decide that hiring a mentor is right for you be sure to do your due diligence. You are going to be making a significant investment of both time and money and you want to ensuring you are getting a greater level of value out.

Best of luck with your investing.

John

@Essien Benjamin you are very welcome. If you have questions feel free to reach out.

@Essien Benjamin I think you are on the right track by starting off with building up your savings.  Real estate is a powerful tool for building wealth but no matter what strategy you plan on utilizing having cash reserves will always be necessary.  There are many different meetups in this area which can be found on meetup.com.  These are a great for meeting other investors, learning about different strategies and getting insights on how others are investing.  The vast majority are free and the worst case scenario in attending is you meet some other investors you might otherwise not have met.

Best of luck with all your investing.

John

@Derrick Oliver you should check out Cascadia Investors Alliance on meetup.com. They have a meetup in Marysville on the last Monday of the month. It’s a relatively small group that shows up regularly but good people.

There are a ton of other meetups monthly that you can join if you are willing to drive south.

John

@Ted Klein Given that you have stated that these are fantastic long term tenants, I would not be overly stressed about this. Assuming you are not raising the rent by an amount that would cause these good tenants to move, I would simply provide written notification that their lease will be ending at the end of July and will revert a month to month lease.  Let them know you plan to raise their rent starting in September (provide this in writing). 

If you are concerned about a when your lease period is ending simply sign them to a 6 month lease and then let it revert to month to month and sign a longer term lease middle of next year.

Long term tenants who take care of your property are a great asset.  While you need to keep their rent close to the market value, retaining a good tenant at a slightly below market rent is beneficial to both parties.

Best of luck,

John

@Erin Newton a HELOC will be your lowest cost source of capital. With regards to how you will access the money, the easiest way is to move the money into your checking account. You will start paying interest on the money borrowed starting the day you move it. If you don't win the auction, you can return the money and only pay the accumulated interest.

As for how do you pay the auction, that depends on if you are buying a property on the court house steps or via an online auction.  If you are purchasing the property in person you will need to bring a cashiers check or checks, equaling the maximum amount you want to bid.  If you are using an auction site, they will take a deposit via a credit card and then you will wire the rest of the fund per the instructions provided by the escrow company.

Whatever you choose to do, be sure you done through due diligence on whatever property you decide to bid on.  While in many cases you will not be able to inspect the property, you can pay for a title report.

Best of luck with all your investments,

John