All Forum Posts by: Matt B.

@Vance Corich I would increase your vacancy. I typically use 8.3% which is about a month of turnover per year. 2% is roughly a week. seems unlikely that an out of state investor, even with property mgmt, will have a house completely turned over and rented out within a week of prior tenant departure. granted this is just an estimate and actuals will be what they will be, but I generally tend to be more pessimistic when it comes to my estimates. to me its better to have upside potential then to underestimate.    

@Del Kelley dont be discouraged.

 most people are giving you the "clean up your credit" advice because its the most prevailing honest truth. no one is saying it is a show stopper but it is a significant barrier to entry unless you have significant capital in the bank. the greatest returns in RE come from the ability to leverage. in most cases, leverage is based on credit. So do you need credit to get into RE?, well no but it will greatly improve your success rate.

yes you can do seller financing but most of them would want to see your credit report and will most likely not give you favorable rates. seller financing is harder to come by these days as it is mostly due to cash buyers.

can you do a rent to own or a sublet lease, sure you can. but again, most will want to see a credit report before leasing, at least that's how it is in NYC.

no one on here is trying to discourage you from fulfilling your dreams and no one is trying to give you an easy answer. were all here to share our thoughts an opinions to benefit one another.

I think your best bet for something u can do right now would be to attend local metups in your area. network to other investors. try to develop a relationship with your local credit unions. I would leverage your friend who you find rentals for now. see if you can borrow or partner up on a deal with him. try to partner up by offering your strengths to someone who lacks in your area of expertise.

@Del Kelley Real estate takes time. anything in life worth doing doesn't happen over night. I would focus on repairing your credit. see a specialist (faster) or open credit cards little by little and pay them off each month. im not saying increase your spending, just saying instead of buying that tank of gas in cash use a cc and immediately pay it off. while your credit is repairing, start banking cash. build a budget and stick to it. 80K a year is good money, make it a goal of yours to retain as much of it as possible i.e. don't eat out, don't go to the local pub, drive a modest paid off car etc. once your credit is up and savings is up, use the 80k a year plus savings to get leverage. then use that leverage to buy your properties.

if your looking for a get rich quick scheme, id advise u skip over RE. don't get me wrong, you can make money fast by flipping homes but you didn't mention having experience in that area so I assume you don't.

another option if your really in a hurry is to find a partner with experience and cash, and see if you can buy into one of his/hers deals. you would have to market yourself for this and see what type of skills they may need that you have. maybe you can buy in and use your web development skills to beef up and/or maintain your partners website saving them money on outsourcing. that might be your ticket into a partnership.

since you mentioned your helping your friend, maybe you can partner with him?

good luck!  

@John Murphy why did you buy it? what was your exit strategy before you bought it? was it a package deal with the house?

@Brian Zaug some mixed opinions on here. so ill add to the mix and give my 2 cents. I only have one rental property. Ive had the same tenant for about a year and a half. hes a young guy close to me in age. every month, I send him a text on the first and he writes a check and throws it in the mailbox (mailbox has a lock). at some point in the middle of the night, I swing by (10 min drive from my house) and get the check from the mail box. I like it this way because it works for me. he has asked to do venmo or paypal but I like being old fashioned. I have never had a problem with my tenant and he always pays on time. he has an irregular pay schedule as he runs his own business so some times he will write the check and ask me to wait a day or two to deposit it. some might argue that's not paying on time but he always come through. hes a good guy who I got to know personally and we get along great.

@Ihe O. I agree with you that we should be human and try to understand our tenants situations. I am human and I have a child myself so if I were a tenant and my daughter needed medical help, you can bet every property you own that my daughter would be my one and only priority.

@Thomas S. I also agree with you about firm with your tenants.

I am firm but im also fair. If my tenants have a true serious problem like a sick child, I personally would want to do everything I can to help them from one parent to another. In the end, your tenant might be late with the rent, or you may not get rent for that month but you will be a better person for it.

I understand this is a business and we should treat it as such but at the same time im not going to sacrifice my core values to make sure I get a month of rent. I wouldn't feel like a good person if I got my rent check on time at a cost of a sick infant not being able to get medical care or the required amount of formula.

I believe a true investor should and would account for things like this. If I miss a month of receiving rent or even 12 months of rent, it will not break my model. my future will still be bright and I will continue to make money and acquire properties. since I am fortunate to be in this position, if I can be the better person and do the right thing, even if it is a personal loss to me then I will do it. In the end, my wife and family will know I did the right thing and that's all that matters to me.

sorry to ramble on but I figured it would make sense to tell you all my opinions as well.

Welcome to BP!

Im not military but im a firm believer in education and taking full advantage of the GI bill. You put your life on the line so the least we (American ppl) can do is pay for your college. I would peruse a degree in finance or business. both are highly transferable and can get you a W2 at almost any company. the W2 will help you get financing for your RE career. I would also look into getting a VA loan asap and start house haking and take it from there.

Most importantly thank you for your service!   

I have never done one but my parents have. They simply went to a lawyer, signed an agreement with the lender (family), and made their monthly payments as agreed.

I would imagine you can form an LLC together but then they are sharing the risk associated with the loan as well as the LLC. I would imagine they wouldn't want to take the additional risk unless they were really looking to enter a partnership.

There's always the fact that most people here don't have hundreds of thousands of dollars in the bank for down payments. Plus a lot of people invest in RE as a side gig, meaning they are not dedicating 100% of their time to it. Personally my biggest road block is down payments, time and location. I live in NYC where you can't find a decent property below 400K. that also comes with an 80K down payment plus reserves for my other rental and closing costs. So for me to get my next property locally, I need about 125K sitting in the bank. I also work full time at a major investment firm.  

I could always invest long distance but im one of those people who prefer to do it locally. And yes I could always try an alternative funding source i.e. seller financing etc. but that exceeds my personal risk profile so I don't.

in the end, the biggest road block for most people is looking right back at them in the mirror...

Good Luck!!!