All Forum Posts by: Josiah Sia

@Keith Faulkner

Here's my plan, that I also wrote as a post on my bigger pockets blog and personal blog.

Year 1 - Decrease expenses. Set expectations for next 10 years with expenses and lifestyle. Start saving. Learn A LOT. Read, listen and watch everything I can. Start reaching out to PMs, REIs, Contractors, and Lenders. Ask a lot of questions. Write out rough drafts of systems and how I want to follow them. Do my best to offer all I can to bring value to others who could possibly help me as a mentor. 

Year 2 - Buy. Get my first deal under my belt. Get my feet wet and use my systems to try to make a deal work as smoothly as possible. Adjust systems as needed.  Continue to network.

Year 3 - Rinse and repeat Year 2 and scale up. SFH > MFH > Commercial/Apts. Continue to network.

Some people like to Point, Fire, Aim. I like to Point, Aim, Fire. But I don't like taking years to do it and I'm not scared of taking the dive. I just want to be somewhat educated and prepared. Hence the 1 year learning/saving/getting my ducks in a row with my family plan.

Good luck!

@Kyle Jones - SA :)

I actually have a little side thing going where I want to try to convince my friend's family who doesn't live in one of their homes anymore for me to use it as a rehab project. I want to buy it from them cash and flip it. Not sure how that'll go but it'll be a good first time project for hopefully low cost. (for the property purchase anyway)

Do you know what the average interest is on a HELOC? You mention that the monthly payment on the HELOC will be large. What would the minimum payments be on a HELOC usually be? I need to look more into how this all works!

Howdy @Kyle Jones! Welcome to BP. I'm in the same boat myself and trying to read and digest as much RE books as possible. I'm about 3/4ths through BRRRR and it's a GREAT book! Make sure to take a lot of notes on the systems parts as it really helps get things in gear for the author.

Have you attended any of the webinars here on BP? They've been pretty helpful but if you've read Brandon Turner's starting out book, then you've got it pretty much covered.

Good luck!

Thanks for the advice Mike. Right now I'm trying to decide if I want to just jump in and get a "turn key" type investment under my belt so I can get my feet wet. Something with minimal renovations needed. Or to save up for 1-2 years to be able to do the whole BRRRR process as it was meant to be done.

Decisions decisions...  

@Mike Zins - That's interesting. Is that a special type of loan that you do as a lender or is there a standard name for that type of loan? That sounds right on point with what you would want for BRRRR strategies!

@Lee S. - That's perfect! Good to know that it's working out for some others as well. Hoping this will be the tool I need to really add some gas to the fire. 

@Will Pritchett - Oh, that's another plan of attack. If a property isn't in TOO much distress but needs some TLC to get back its worth and increase its ARV, then a "low and slow" BRRRR sounds like a good tactic to have in the back pocket. Thanks for sharing Will!

@Michael Noto - That makes sense. Thanks for clarifying Michael. It's either too good that you can just conventional loan it and can't really BRRRR it well, or it's too distressed that you can't conventional loan and will need to use another financing method.

@Mark Sewell - Woah, I've never heard of a temp-to-perm loans. I'll definitely look into that. Is that something most banks/ credit unions do? Or is that more of a special plan they would have to create for an investor has a good deal presented? Also, GREAT advice on the starting point cash reserves. I'll definitely do that right NOW and adjust my starting point to allocate half to a "rainy day" scenario. I really appreciate that, thanks for looking out. 

Yup! That's right! The Home Equity Loan is more a lump sum that you get as a second mortgage paid off over time, usually fixed interest if I recall.

The HELOC is more like a CC that I can use (but usually with a variable interest), pay off, use, pay off in usually a 10-15 year time frame. I think I have a new tool in my belt now! I'm excited.

Thank you Bob. That makes sense. I read about that too when I found out about HELOCs. Gotta make sure every bit of it is understood. Thanks for looking out.

Excellent! Thank you for clarifying. I might just do something like that then and pay off my house early so I can borrow against it over and over. Sounds easier if I want to go fast as the hare but not really sonic the hedgehog fast. 

@Devin Hughes - thank you for the insight. That does make sense. Getting better deals with cash is always a leg up on getting the deal that you want, not the deal that you settle with.

@Bob Daniels - gotcha... that makes sense. Banks wouldn't let you do a conventional 5% on a trashed up area. I don't think they'll even loan on a house that inhabitable. 

What about if I have a paid off house and have a HELOC? Would that be something that could replace the hard money loans/ cash needed?

I'm not 100% knowledgeable on HELOC's but if I have a $200,000 home paid off, and get a HELOC of 70% then I could essentially have a $140,000 line of credit to use to buy and rehab, then refinance and pay back my HELOC, rinse and repeat? Am I missing something with this train of thought, or is that essentially how it would work?