All Forum Posts by: Jason Barnett

I didn't see the story on CNN... he's got a blogspot site that I've been watching. Although yes he has been on quite a few news shows and he will probably be on a few more for the next month or so.

It's official.

If you are going to succeed in real estate one thing is for sure: you need to be able to negotiate. I have been following a story that is hands down the most inspirational story I have ever read. I'm not even going to tell you what it says because I think you should read it all.

Just remember: if you have a dream then you must follow it through to the end. It's crazy what can be done with hard work and a little creativity!

When there are more sellers than buyers this is called a buyer's market. In a buyer's market you can typically buy houses for less money or better terms than normal. So the plan is that you should buy property now and then hold on / resell the property when the market changes back to a seller's market (less sellers than buyers). You might have to hold on to a property for several years before you see the switch from seller's market to buyer's market.

Why not split the difference... and become a realtor for investors. You will make good contacts in your area and you will inevitably learn quite a lot from your investors. Offer to help bring properties to investors for expired listings and/or "handyman specials" that need "some TLC". Do some basic analysis (rent for the market and/or ARV) and if it looks like a deal then offer it to your investors for a finder's fee. In other words you can use your MLS access to bring deals to your investor friends (for a small fee) and then maybe they will pass some business back to you when they try to resell their properties.

EDIT: I originally gave a couple of answers, but then I quickly realized that there are many ways to get into a property with little or no money down. You'll likely have to pay settlement costs, but here are some options (cheapest to most expensive):

Purchase a property subject to original financing (depends on loan balance)
80% first loan 20% second loan
FHA loan (for owner-occupied multi family)
Seller-financed property (if your credit score is 625+)
Lease-option with small option consideration (not legal in all states)
ARM loan (don't be surprised when rates jump soon)
Private equity (get someone to partner with you and use THEIR money)
Hard money loan (generally less than 70% of ARV for property)

I agree with land chasers' first post. I think in the next 3-4 years we will see a lot of people moving out of home ownership and back into apartments so you will want to buy rental / cash flow properties for the foreseeable future. There are a lot of places around the country where appreciation hasn't hit (mainly the midwest) so just focus on those markets and go.

Fascinating post. I had to read it a couple of times to understand what was going on, but then again I've never actually used an ARM to purchase a property.

Is there anything that you / an investor could do in order to refinance the property without being "forced" into terms from your original lender? For example what would have happened if you simply talked to a different broker and asked them to pay off the ARM for you?

Also you state that it was Treasury + .5 and I'm wondering what was the actual rate that the lender charged you?

That's great, it sounds like you've got a pretty good idea of how to get started. Here are some options for financing:

1. Hard Money Lender.
2. Private investor (could be cash investor, but if he can come up with down payment and has good credit then this can work as well)
3. Sell the project to someone else wholesale (i.e. bird dog)
4. You can buy the property subject to the existing loan(s). This would require you to pay enough to bring the property current as well as whatever monthly amount is stated in the original loan(s).

Remember though: cycle time is going to be crucial in any kind of rehab deal. You want to be able to fix the property QUICKLY and sell it QUICKLY for a profit. Sitting on the deal with a hard money loan, etc. is going to eat up profit FAST. So you need to find out what the "quick sale" price would be for each property (hint: don't use the highest comp sales)

Good question. In order to do the analysis I would suggest you need these things:

1. The property analysis tool on this site. It will give you RoR, Cap Rates, Debt Service, GRM, and more.
2. Find your local REIA and ask some of the landlords what you can expect in your area. They can probably give you market trends, vacancy rates, and appreciation rates.

If you tell us what area(s) you're looking at then someone on this site might be able to give you estimates...

Hey another member of the Ohio gang! I invest in the Dayton, OH area so if you'd like to chat some time feel free to get in touch with me. Welcome to our community.