All Forum Posts by: Michael Wentzel

@Alberto Simpson and @Dylan Falso

The first deal is often not easy. Especially if you're not sitting on a pile of cash.

I would spend some time on education. Check out the Ultimate Beginner's Guide in the education tab up above. Then listen to a few or all of the podcasts. That is a great way to get familiar with different strategies in Real Estate investing.

Beyond that, you probably need to go hang out with some local investors at REIA's. You might be able to buy an investor who is doing what you would like to do a meal or cup of coffee. Offer to trade some free work in exchange for some more education. These investors will be able to give you local contacts and might even teach you where you might find the funds to do your first deal.

Here are some possibilities for funding...

1) 3 F's- friends, family and fools (private investors)

2) Hard money lenders

3) Small local banks and credit unions

4) Conventional mortgages from big banks

The challenge is all of these options are going to be more willing to lend if you have education and experience.

I hope this gives you some practical steps to take action.

Mike

@Account Closed

The deal above looks pretty good for the Pueblo market right now. Prices have started to inch upwards, so you can't find much for less than that these days. It would depend on the area of the city and condition of the property. PM if you would like more feedback on a specific property. I also have a property manager I really like if you need a referral.

Mike

@Brandon Schlichter

In Pueblo we are usually about $30 per month on taxes for a single-family home. So that is around $360 per year compared to around $1200 per year in some of the Ohio markets where I have been looking. That $70 per month can blow-up the model on single-family homes in C-class areas where you look to make $150 to $200 per month after all expenses. I would also rather be using that $70 per month to pay down my mortgage, improve the property or put in my pocket. 

It is still very likely that we will purchase houses in one or two markets in Ohio in the next 12 months. But taxes are higher in most cases and should be taken into consideration.

Mike

@Account Closed

We own a portfolio of properties in Pueblo and are big fans of Pueblo. If you want cash-flow in Colorado, it is a great option. You can also learn and make mistakes with smaller amounts of money, which has really helped us. The Pueblo/ Pueblo West population has continued to grow despite the major layoffs in the steel factors back in the 1980's. I'm confident that beautiful weather, mountains and the low-cost of living will continue to draw residents and businesses to the area. 

We are currently looking at focusing on a second market in Ohio... maybe Columbus, Cleveland or Akron. One major difference we have noticed between Pueblo and Ohio is property tax rates. The annual property taxes are often 3 to 4 times higher in Ohio compared to Pueblo. So we are trying to work that into our numbers.

Mike

@Dustin D.

It sounds like you need to run away from this one. @Chris Wood and @Joe Splitrock are right. Investors in good areas are looking around 1% in monthly rent to purchase price. Investors in less desirable areas are looking at 2%. This property is .5%. There is no way to cash flow. Just because he is offering owner financing doesn't make it a good deal.

Bigger pocket is a great place to learn and network for FREE. Spend some time on here. Dig deep into the podcasts and Ultimate Beginner's Guide (in the education tab above). Investing time in education will help you avoid mistakes which some many investors have made.

Mike

@Joe Splitrock

@Armen Zakarian

It seems like you want options other than private lenders. Beyond private lenders, there are number of options...

-Personal loans/ credit cards (in areas where real estate is relatively affordable)

-Home equity loan on your personal residence

-Hard-money lenders... usually expensive and they want experience

-Small banks... cheaper than hard-money, but don't move fast and want experience

Private money is great because it is flexible and theoretically unlimited. But if that doesn't work and the first two above are out, you'll need to spend some time at your local Real Estate Meet-up. You usually need to get some experience to access number 3 and 4 on the list. You might have to offer up some free assistance to an experience investor to gain this experience. Experienced investors will also know where to get the funds locally.

I hope this is helpful.

Mike

@Nick M.

High prices led me to look outside of the city where I was living. I was fortunate to find a community about 40 minutes away with some relatively low priced real estate. I appreciated that I was able to learn and make mistakes with smaller amounts of cash. I've also made some money and a ton of equity. I like starting with single-family homes to avoid HOA's. You can also get 2-4 unit properties that are considered single family properties as far as the banks go.

Mike

@Misty Anderson

If you have a great team to help you with renovations, that is a great start. I would also interview three or four Realtors and see if you can find one with some investing experience. I would also interview a few property managers and learn from their perspective on the market and different neighborhoods. Then I would try to take a few investors out for lunch or coffee and learn from them.

Then you need to figure out lending. Private money is great. It is unlimited and flexible terms. You just have to find it. They say start with the 3 F's... family, friends and fools.

Beyond that there is conventional and commercial financing. I would would into one national bank and two or three local banks and see what they might be willing to do for you. The local/ regional banks and credit unions tend to be more flexible and willing to work with investors. But they like to see experience.

Mike

@Rolanda Eldridge

I've learned so much from BP that I try to be helpful as well. I'm thankful for those who have way more experience than I do and have been willing to answer sometimes simple and sometimes difficult questions. This is an amazing resource. Hopefully BP is some of the greedy over-priced real estate "gurus" out of business.

Mike

@Jack Forester

Great question. Lots of people have horror stories about tenants or investing in general. But how common are they? I would say the better property management or screening you have in place, the lower the percentage it will be. I have been using property managers for about 10 years and I would say the bad tenants would be 10% or less. My rentals would mostly be considered mostly B or C class.

Mike