All Forum Posts by: Larry Turowski

I don’t understand a lot about bitcoin or cryptocurrency except 1) that it is very volatile and 2) it seems to be going up and up. I’d like to get in on the up and up part but I can’t handle the volatility and I don’t understand enough about it overall to invest. 

Most people don’t understand how the USD works except 1) it is not very volatile and 2) it loses a little value every year (inflation). I know more about it than many but I didn’t always but these two points made me feel safe trading dollars for real estate and, in fact, I felt less safe holding onto dollars.

What I do know about the USD, as with other national currencies is that government fees and taxes are required to be paid with them so that requires people to acquire them. I know money is created ideally based on assets (as opposed to gold) so when it is created that way it is indeed backed by more than trust. I know that way too much of it is backed by treasuries which is just the snake eating it’s tail and that is troubling but not yet unmanageable, astonishingly.

Cryptocurrency could also be backed by assets, why not?  Someone could lend you a bitcoin with your house as collateral.  But I don’t think cryptocurrency is currently being lent and that would be problematic for running an economy.  And no government is requiring fees or taxes to be paid in cryptocurrency so there is nothing enforcing people seeking it out.

So there’s my “two cents.”

@Hoa Nguyen it sounds like you are new so I’d be careful here for the sellers sake more than yours. I’ve done owner financed deals. There are two things that make a deal: the price and/or the terms. In these cases for me the price wasn’t compelling enough but the terms, that is, their being willing to owner finance, made it work.

1. Yes, there is nothing unusual about refinancing.

2. Most banks require a seasoning period of 1yr. Some less.  So after that they will do a refi. 

3.No. But if they want a higher price than I want to pay and I know they own the property outright or nearly outright (in which case I’d need to come up with the difference as a down payment) then I’ve offered the idea.

Basically, I’ve structured the loan to make interest only payments and then it had to be paid off in full  in 1 or 2 years. 

4.It is wise if you know you are not going to harm the seller. That is, you know you can pay it off. I’ve done it for a flip where I knew I would be selling the property after a few months and for a rental where I refi’d after a year. In both cases I knew I had cash available to pay of the seller in the worst case scenario. 

@Stephen Keighery you got to change with the market, I agree, and with your place in life.

There is no single answer to investing as everybody is in a different place or stage in life, has different circumstances, and different tolerances and aversion for risk, loss, fear of missing out, etc. 

Due to supply chain issues and labor shortage I’m more averse to scopes of work that might encounter delays. I guess my big R Rehabs have turned into little r rehabs. And I’m more debt averse and just less “hungry” as I get older. So my big R Refi’s have turned into little r refi’s (really  just being debt free on some properties). 

@Akshay Wattal the best move you’re making is getting started, especially while your young. The lessons you learn will far outweigh these “minor” differences in the long term. You want to get it right but you don’t want to wait for perfect. 

That said, what you consider sky high rates are still historically low. I wouldn’t be waiting for them to come down so scratch #3. And if they do come down, it’s still great.

If you're object is to grow then you want to conserve cash. The difference between 20% down and 25% down is the difference between 5 and 4 deals. Your cash flow and ROI will likely be better with 5 deals, so option 1.

And then it comes down to the points. If you’re starting out a little slow and will take 3 or 4 years to accumulate 5 rentals then pay the points for the lower interest. If you think you might get them in the next year or two then conserve the cash. 

@Anthony Cross great job!  A number of the houses I’ve flipped had serious cat or dog odors. Nobody but an investor is going to buy these houses. And there are more out than then we realize so great job on your initiative knocking on the door. I have to say that’s one thing I’ve never done.

And kudos for being sensitive to your sellers other needs. 

@Ramada Evans It sounds like you are ready but haven’t educated yourself enough to know how you want to proceed.  Rentals provide the lowest barrier to entry and require the least education. I still wouldn’t jump into rentals without adequate education, but it is harder to make a colossal mistake the way you could with flipping. I’d definitely warn you away from try a flip without really knowing what you are getting into. 

I started out trying to flip an inexpensive underperforming rental property. Worst case scenario, I’d have a rental. Worst case happened. But I learned about hiring contractors, putting together a scope of work and dealing with tenants. 

I have since bought plenty of rentals, flipped lots of properties, and wholesaled a few. Mistakes happened and I’ve made my fair share along the way. Keep your eyes open and minimize your downside. 

@Dan M. Why the fixation on cash flow? When you have cash, ROI is more important than cash flow.

Interpolation.  In math that is where you have enough data points that you can guess the points in between.  So you have nothing that matches in the area, but maybe you have some data points to the east and the west.  Maybe you have some data points of slightly bigger houses and slightly smaller houses.  Maybe you can compare two houses that are identical except one has one bath and the other has two.  That would give you an idea of what extra value a half bath would add, something.

Ultimately, though, real estate isn't like math and we can not always pinpoint ARV, we get a "somewhere in this range" answer.

@Gary Eaker coaching is great but you don’t necessarily have to pay for it. You can get a lot of mentoring just by talking with other investors. You could probably talk to 20 other investors this week and get a lot of information. Most are happy to share.

I’m generally against paying a lot for coaching because most people will not get their moneys worth out of it. 

What has the coaching you already bought gotten you so far?

Hi @Ali Jafari, no secret sauce here.  You refi with whomever you can refi with.  Same company?  Sure.  Most banks require a seasoning period of 6mos to refi, some a year, some none.  You may need to document what work you've done.  Other than that, yes, the requirements are basically the same.