All Forum Posts by: Michael Faulk

JD- Congrats! Your in great hands with Jimmy just follow his lead. On the financing side-double check every thing.

Jeff Lee- This is where you need to switch your outlook. That big tree represents money to me! It scares a lot of people off so it lessens your competition which equates to you being able to negotiate a better deal. That house is money in my opinion! It needs work don't get me wrong but... just think of the arv! A buddy of mine sold one of his slips two streets away for 120k. That's a huge spread even if you put 30k in rehab!  That tree just needs a chainsaw taken to it! 

That's just me though... 

Hey guys... I gotta swap out a hot water heater when I get off of work at 5pm. Probably going to be late to the meet up. There will be a new guy coming tonight. His name is Bobby Gill and he is a CPA and one of my friends. He owns some real estate and is interested in REI.

Awesome! See you on Thursday evening. 

Use a CPA (my opinion) . Build your team and the foundation for your business. It is well worth the expense and your going to be glad you did in the future... especially if your doing REI in addition to a full-time job. You want to start early trying to structure a team to surround yourself with.

Think of an LLC in terms of asset protection. If you have a property in an LLC and someone sues you they come after everything in that LLC. If the same happens and the property is just in your name they come after everything under your name. This is the very very simple way to look at it. I formed my LLC myself through the secretary of state for like $80. So forming the LLC I would recommend doing yourself but on taxes my take is having a professional complete them.

One of the early podcasts (BP Podcast #5: Dealing w/ Death-A financial discussion w/ Neil Frankle) if I am not mistaken he briefly talks about LLC's and asset management.

@Jeff Lee 

ohhh.. one more thing. I feel the interest rate is not something to lose sleep over. Remember you can pass along this cost to the renter who is paying your mortgage. What I think you should dwell on is how much cash you are going to have to come out of pocket initially. As others have said there are tons of different view points on strategies. You just need to focus on what is best for you. 

Greetings @Jeff Lee ... so very glad to see someone from Bossier City. 

A couple of things for you...

1) as @Jeff M. mentioned in his post a group of us that met through BP are meeting and he has provided a link to the information above. We would if you would join us. We have met once before and are trying to network with other like minded individuals. @Jeff M.

I highly recommend going through a local community lender or even the bank you use for your personal finances for your transaction and pose your questions to that banker. Maybe Gibsland Bank or Red River Bank are my suggestions. If you join us Thursday I could pass along any contact information of the lender I have used for my past few transactions and I'm sure the other attendees have their recommendations as well. 

My views on your questions: 

1) 5/1 Arm... I strongly belief that if you can qualify for conventional financing or even FHA you should go that route. My rationale is that with a fixed rate conventional mortgage you will be able to have a repayment period of up to 30 years at a fixed rate. With an adjustable rate mortgage it is not fixed and are at the mercy of the current economy. I feel that once you can not qualify for a conventional loan then move to adjustable rate mortgage options. I suggest getting together all of your financials, make a detailed list of questions that are on your mind, have your goals in writing you want to accomplish short-long term and talk to a banker.

2) When I read this question I said to myself. What are your goals? Are you looking for cash flow, are you looking for the tax benefits of rental properties or what...? If you were looking for cash flow-which is what I am looking for. I wouldn't dare spend more than I had to on acquisition. Think about it... if you bought a property for 50k and placed 50% down you would have approximately 25k left from your capital and an asset that has equity in it that you couldn't easily touch. You never know when a deal is gonna come up and having the access to funds to crucial for growth! Also, on a side note if you are serious about REI that 2-3 year timeline you gave is gonna go out the window and you are gonna wish you had capital to work with. If that REI bug bites you :)

3) On this one I would ask the banker. A good banker who has your best interest at heart won't put you in a loan that has a pre-payment penalty if they know your goals and communicate them clearly. I keep stressing letting everyone around you know your goals. A banker can't put you in the best possible financing option if they don't know where you want to go. So... develop within yourself a plan/goals

4) As I've said above... what are your goals? Do you want to pay that thing off as fast as possible or are you looking to stretch it out 30 years. Keep in mind the tenant is paying the mortgage for you. A qualified banker can answer any questions you might have. 

Hopefully I didn't ramble on to much and made a little bit of sense. 

If I had 50k capital to work with this is what I would do. 

-First and foremost I would get all of my financing straight with a lender and have together my plan. You know because with properties that are good deals they don't wait around. 

-Get with a broker in our area that deals with investors and tell them my plan. Not just someone you saw on a sign in a yard. Get referrals from people around you. A person that deals with strictly owner/occupied deals is not going to understand what an investor is looking for. This agent might bypass something that would align perfectly with your investing strategy. Everyone's strategy is slightly different. You must know where you want to go and what strategy your going to take to get there. I am personally looking for cash flow buy/hold. I would have the agent look for properties under 50k in the target area that I set. I personally have a set area I look for my properties in since I currently work full time. It is much easier to manage properties a mile apart than it is driving across town. At least that's how I view it. 

-After I have chosen this property for 50k... I would choose conventional financing and place 20% or lower if possible down. 10k in this situation. Leaving me 40k for any renovation and working capital. 

-I would get a renter in there and see if I still have the passion for it. If I do I go into my 40k and repeat. 

There are so many options available for you. You just need to know what is your plan and timeline. 

Sorry for the long response.... I could talk for hours about REI because I love it!!!

Good luck and hopefully your schedule allows you to join us Thursday. PM me if you have any questions and I can forward you my cell number. 

JD... Awesome! Keep us posted on the status of your offer. I wish you the best of luck

I'm in. I have also been trying to hype this up to other investors who are not specifically associated with BP. The more the merrier. 

@Jeff M. Thanks once again for putting this together. I feel that we all can do great things if we use each other as resources. Shoot me a text this weekend. I'm off all weekend and would love for you to come see my State court project. 

@Justin Kilgore ... Looking forward to meeting up this weekend. Your really rocking it!!!!! I need to try and keep up. By the way thanks for getting Jimmy to join us.

@Josh Emory dude... put a picture up ;) Also, I have a ton of questions for you in regards to how you balance your work/personal life. 

@Thang Nguyen  @Andy Bui @Arthur Williams @Logan Boyter

@Robby Greene @Helen Hall

By the way... has anyone walked through 3268 Murphy St. Bossier City, LA 71112. 

Homepath property...

3/1

$44,900

A buddy of mine sold a property around the corner for $120,000 rehabbed. 

Could probably get $850-$950 a month rent.

I walked exterior and it needs foundation work, gut rotted wood...Has new Air condenser (Lennox) Back patio needs to be torn down. 

My estimate would be $25,000 rehab... but I've never done slab foundation repair. Just curious. 

MF

Skip the "grab a beer " part... Just saw your age ;)

Damon-

I completely agree with @Brian Burke and @Robert Leonard . I feel that throughout the real estate investing community the investors that really are here to make a living for themselves are more than happy to help others given the right time and place. My suggestions as stated by others are to network and put yourself out there. Tell people your story and your goals. Investors that are in this for the long term want to help others because they know that they have in the past or definitely will in the future need assistance from someone (probably 10 x's over). No one can do this alone. Have confidence in yourself and be humble when you are learning. Take chances because you never know who you are going to meet or who might know someone that is looking to get into a deal of some sort. Remember-investors don't have to live in Houma to invest in Houma. A deal is a deal and money spends in Houma the same way that it does in Shreveport or Seattle. Seriously-put yourself out there!! You will have ups and downs but if you know in your heart that you want to do this you will find a way.

If you are having trouble networking with local investors in Houma, start a meet up of your own. Put yourself out there saying that you are a new investor wanting to meet others so collectively you can move to the next level. Meet at a local restaurant and have a beer or some dinner and just talk. You will be surprised at the response you get from people that are in the same boat as you and might be nervous to take those actionable steps. While you are doing this you are gaining credibility for yourself and respect from others. Also, this shows that you are serious and not just someone who is looking from the outside. After that dinner keep in touch or meet on a regular basis.

Approaching investors: Be yourself and be HONEST with everything you do/say. Ask questions and offer assistance to a seasoned investors or help other investors who are starting by doing something that is needed and beneficial to them. A young man recently reached out to me saying he wanted to learn from me regarding land lording and rehabbing.(the little I know). He offered to come over to my current rehab once a week and we could work shoulder-to-shoulder and he would learn by the conversations we would have and I would get a little extra help doing whatever I was doing. Be creative. Think outside the box.

In conclusion to my little rant is: If you really want to get into this business put yourself out there and make it happen. Belief in yourself, be HONEST, keep your eye on your goals and brace yourself for bumps in the road. Hopefully, I made a little sense. But- you can do it!!! Just look at the response from your forum post here.

Keep us posted on your success!!!