All Forum Posts by: Michael Chase
Michael Chase has started 1 posts and replied 4 times.
Post: Advice for Purchasing first Real Estate Investment Property
- Posts 4
- Votes 1
Quote from @Nate Sanow:
If I follow your story correctly, you 1. Have a loan pre-approval and 2. You have enough for a low down payment and 3. Have a house you CAN buy, not sure if you SHOULD buy, and not sure HOW to make it an investment?
If this is all true, I suggest buying it and being patient. You made it sound like it needs cosmetics, is it functional? Meaning, does the HVAC work? Do you have hot water? Etc. If it's not a termite infested, fire burnt down, flooded with monsoon water nightmare I would say…buy it. Assuming your ARV is correct especially.
Trick is be patient. Might take you time to update or improve it. I wouldn’t over-do any improvements and focus on renting out the rooms to roommates if young and single especially. Good luck.
Post: Advice for Purchasing first Real Estate Investment Property
- Posts 4
- Votes 1
Quote from @Joe Villeneuve:
Quote from @Michael Chase:
Good Evening everyone,
After months of research and years of thinking about investing in real estate, I'm ready to do my first deal. I have my preapproval in hand and am analyzing deals like a mad man.
Any advice for someone just starting out?
I've found a few potentially good deals. I've analyzed and the numbers work. One particularly interests me. Its a 4 bd, 2.5 bath 3,000 square ft for 179k but it needs some updating. If done right I believe the home could sell for 350k+ do to the value of the smaller homes on the same block and the neighborhood its in. I would need to get into some creative financing for the rehab because I just dont have the cash at this time. Any suggestions?
Another analyzed deal is a 6 bd, 3 bath, 2 kitchen, 3200 sq ft SINGLE FAMILY for 135k. Call me nuts but i could easily see with some creativity turning this into a 2 unit apt due to the lay out and would cashflow like crazy in this scenario. However the seller is wanting cash which I dont have that much. Im still educating myself on wholesaling but is this a possible way to profit off the deal, even though i dont have the cash in hand?
My situation is this- 20k liquid, and growing every week, and 20k credit with solid finances (not alot of debt). Any advice yall could give me would be appreciated. Trying to break through this barrier of hesitation and let the numbers do the talking. Thanks
1 - You're a REI not a REA. # of beds, baths, cost/sq ft mean nothing as far as influencing your decision to buy a property.
2 - Smaller homes have no impact on the value of larger ones. Only use sales comps on homes in the immediate area that are within 10% of the home in question.
3 - The knowledge you need to do Wholesaling is the exact same as if you are buying it for yourself. The only difference between a wholesaler and the end buyer is the one that actually closes on the property.
4 - The cost of any/every home you invest in is ONLY the cash you put into it...as long as it is cash flow positive. The tenant is paying everything else, not you. The goal of the CF is to recover your cost as fast as you can, so the smaller the cash you put in, the faster you should recover your cost and start to profit.
5 - Now, here's the most important (yes, even more important than the above), don't start looking for properties and then figure out how you are going to pay for it. Do it the other way around. Start with what you can afford, which is your cash. Figure that is your DP, closing costs, rehab, and all the other cash items that happen upfront. Extrapolate out from there to tell you the max offer you can make (notice I didn't say asking price).
I understand what you are saying. Probably getting a little ahead of myself. As stated before I've thought about investing for years now, and with BP I've got the edge to just do it, and want to take advantage of the best deal I can. I have done comps for the property, there weren't many but the home next to this sold in november for 279k and once again a smaller home. So even using that as my baseline is 100k above list. Lot of variables to consider. Would your suggestion be to go into something more turnkey? Just to close a deal and get that experience. I just want to do it, go through the process.
Post: Advice for Purchasing first Real Estate Investment Property
- Posts 4
- Votes 1
I appreciate your feedback. Yes, I have considered using my VA loan and using as my primary residence for the 4 bed 2.5 bath deal I mentioned, and since the property taxes are outrageous in this neighborhood, I would also get some help on the property taxes to limit my expenses and continue to aggressively save. My mortgage broker assured me (and this may be a hard lesson learned) that he can get me into my investment property for 5% down on a conventional loan with my credit and income. If that does fall through and they want 20% down as I have heard like a song on repeat, then that will definitely get revisited. I would love to do a lot of the rehab myself, especially with my knowledge and experience in residential construction, and save some money on the rehab as well, however do to my job and working out of town for majority of the year, I would have to hire a contractor. Another possibility would be to just sit on the property and continue in about 4 months I would have around 40k to work into the rehab, which I figure is enough to get me started. Not sure the best way to approach it
Creative financing may have not been the best wording. I essentially meant taking out a construction loan but Im unfamiliar with there requirements. But if the home appraises like I think it will, then I could be buying into equity. My understanding is this is an estate acquisition and they just want the property gone. Theres still a lot of unknowns, but I will definitely keep that option open
Post: Advice for Purchasing first Real Estate Investment Property
- Posts 4
- Votes 1
Good Evening everyone,
After months of research and years of thinking about investing in real estate, I'm ready to do my first deal. I have my preapproval in hand and am analyzing deals like a mad man.
Any advice for someone just starting out?
I've found a few potentially good deals. I've analyzed and the numbers work. One particularly interests me. Its a 4 bd, 2.5 bath 3,000 square ft for 179k but it needs some updating. If done right I believe the home could sell for 350k+ do to the value of the smaller homes on the same block and the neighborhood its in. I would need to get into some creative financing for the rehab because I just dont have the cash at this time. Any suggestions?
Another analyzed deal is a 6 bd, 3 bath, 2 kitchen, 3200 sq ft SINGLE FAMILY for 135k. Call me nuts but i could easily see with some creativity turning this into a 2 unit apt due to the lay out and would cashflow like crazy in this scenario. However the seller is wanting cash which I dont have that much. Im still educating myself on wholesaling but is this a possible way to profit off the deal, even though i dont have the cash in hand?
My situation is this- 20k liquid, and growing every week, and 20k credit with solid finances (not alot of debt). Any advice yall could give me would be appreciated. Trying to break through this barrier of hesitation and let the numbers do the talking. Thanks