All Forum Posts by: Larry Turowski

Hi @Jiwon Lee! Lots of investors here. There is a a REIA meeting the day before. Can't post urls but I can DM you the the website.I probably can't make your meeting but happy to connect.

@Dakota Cochran No. Don’t it. You’re not comfortable and that means you’re not ready. And that’s all you need to know right now. 

If you think you might be interested, educate yourself on the math and ramification. Get other quotes. Know what you’re going to do with the money. When you’re feeling are not greater than butterflies, then your ready to move forward. 

Quote from @Raj Ga:

Questions:

1. If I use HELOC to buy property outright and turn around do cash-out refi on rental property, would be interest rate will be .25 higher?

2. Has any one use HELOC to buy property outright and use rent to pay off the HELOC, if I know I will sell the rental property in next 10 years before I need to start paying principals?

3. Do we get tax benefits on interest payment on HELOC being it a rental property?

1. You’ll have to find out the rates from your lender.
2. Yes. Investors do this all the time.  Buy with the HELOC and decide later whether to refi or not. 
3. The HELOC is in your personal home and the interest will be considered as such. Standard tax deductions have made primary residence mortgage interest payments irrelevant in some situations. Speak with your tax prepares. If you have a mortgage on your rental, the internet goes as an expense deduction. So there is that benefit. 

@Andrew M Amezquita mentoring is great but it doesn’t have to be paid or professional. You are getting a little bit right here on the forum. (I’m not a fan of most professional real estate coaching as many here can attest.)

I would suggest you start by looking for local mentoring, jointing a local real estate investor association (REIA). And then take investors out for a coffee. Ask them how they started, what they do, etc. You'll be surprised how helpful people are.

@Brandon Montgomery How about a little dose of reality. I really like @John Morgan ‘s example. 14 houses in 7 years.

Yes, there are outliers. You could become an amazing wholesaler and generate lots of cash and buy 10 houses this year. You could develop a great relationship with a private lender, buy houses in rougher areas that cash flow really well and be able to pay that off in a few years or keep partnering and buy more. You may find some amazing deals on apartment complexes and partner with someone who can syndicate them in exchange for a percent cut (and then eventually do start doing it all in your own).

But what I love about real estate is that you don’t have to be one of the superstar outliers to do really well.

John Morgan, like me and most of us, doesn’t sound like he was lucky or a juggernaut of super driven ambition or super smart or had the right connections and relationships or had some sort of head start or lots of money.  And yet here he is with 14 houses!  People who have never bought one investment are probably amazed and think he is an absolute expert  

I didn’t (and don’t) want something that I have to be an outlier in to be a success. I don’t trust myself to be an outlier. I want something that if I just keep working at it, it will work out. I have 40 doors now and have flipped dozens and dozens of properties. And I’m nothing special!

@Connie K. You could also consider a paid listing. That is where you pay a nominal fee ($300 to $500) to put your house on the MLS for buyers and buyers agents to find. You pay only the buyer's agent commission, typically 3%.

There are several things you should know and be able to do yourself to consider this:

1.What you should and are willing to do to make your property the most marketable, including repairs, upgrades and staging.

2.How to price your property

3.How to negotiate

4.How to navigate the selling process

Just put a lockbox on the house, realtors will call you.  Give them the lockbox code and record their contact and when they are going.  In a hot market you do not need a sign out front, nor do you have to worry too much about under-pricing as competing offers will take care of that.

@Simon Pereira you have no money, contracts, experience or knowledge. Gotta confess, your brutal honesty made me chuckle.

You’ve got desire. That’s good. Your here for knowledge. That’s good. Next, some money would help. Consider a job or even career as being part of your real estate journey. 

@Brandon Montgomery For most, real estate is a get rich slowly thing, but still exponential. 

Let's say that by cashing out a bit more than you started with and by saving all the cash flow you are able to do one more then for every 4 houses you have (fractions discarded). For instance, if you had 4-7 houses, the extra money you pocketed from the rehabs and from cash flow you were able to BRRR 2 with your original money and another from your new money. But with 8 houses you'd be able to do a total of 4 BRRRs the next year.

I know that this misses some details.  And I won’t show all the math but here is how many houses you’d have at the end of each year.

1, 2

2, 4

3, 7

4, 10

5, 14

6, 19

7, 25

8, 33

9, 43

10, 55

11, 70

12, 89

13, 113

Thirteen years to have over 100 houses.  Some hand waving for sure but it gives you the general idea of how things can grow. 

@Jorden House-Hay Super kudos to you posting this and also for not getting totally discouraged. It’s good for newbies to see it’s not all roses. I went through a similar catastrophe flip early on and taking it in the chin and keeping going is something I’m proud of. 

@Alex D'Anjou I wouldn’t say this is a question of what you want to do, unless you hate being a landlord. If the work os the same whether you keep or flip and you do better flipping, then flip it. 

I’d prefer to always flip, but I do both. Why?  Because flips are difficult to come by, difficult to scale and are not passive.

As long as you can find deals, find the people to get the work done, and don’t mind the active role you’ll need to take, keep on flipping.

Once you have more money than you can find flips to fund or you can’t find the crews or can’t manage all the crews or you want to be more passive then start keeping rentals.