All Forum Posts by: Craig Brouillette

Welcome and good luck my friend! 

Thanks for the replies!

@Crystal Smith

@Micah Copeland

I get responses from my marketing efforts and I want to make sure I'm successfully converting as many of these prospects as possible to closed deals.  I don't wholesale, just negotiate to buy the deals myself, and if I've lost deals in the past I feel it's becuase my first offer might have been perceived too low (even though it's based on comps I show to the seller).

What strategies have worked for others when it comes to making offers and negotiating the price when you meet with homeoweners who are looking to sell (and this is for private sales not homes listed on the MLS)?

Thanks! 

Welcome @Corey McGann ! I always like seeing new members from NOLA.  Good luck

Andre, good luck in your investing endeavors, and I can help with a few of your questions.

As far as the 2% rule the only time I ever came close to that was on a section 8 property that I bought at an auction.  There are some deals out there that will pay that but you need to decide if you have the comfort level to manage these types of properties. 

Taxes:  you can't deduct the whole mortgage payment but only the interest portion of the payment.  Your other deductions include the non-cash expense of depreciation (which can be significant enough to vocer your cash flow), upkeep, utilitlies, insurance, taxes, etc. 

Finally yes, join NORIEA.   

@Vicki Gleitz like Dick said above I would check because homeowners policies don't always cover houses under renovation.  You might be better off with a builder's risk policy and then once the house is completed and occpied switch it back to a homeonwer's policy.   

@Mike Plitsch Congrats on your first flip, and welcome to the NOLA market (i guess congrats when you get here). I have a few opinions on your questions whether to focus on doing flips or rentals. First, the market has been on a tear down here lately so price's are up but rents haven't caught up with the price increases yet meaning the return on rents are lower. Looking at this it's generally a great time to flip and not necessarily the best time to buy long term rentals. Second, buying rentals locks up capital unless you get a loan to buy it so it really just depends on your financial situation . If you don't need the income from fliiping houses to live then it's ok to focus on rentals and build long term wealth, if your cash is limited then flipping is a way to build your capital if you do it right.

For me I spread a wide net when looking for properties and if I find the right deal I do it whether it's a flip or rental. And finally I think buying a double to live in one side is a great investment so go for it. On the above comments I'm talking about deals that aren't your primary residence.

@Leigh Ann Smith

Ha well Christmas Tree Farms in general isn't typically a targeted industry for big bank lending but it's not something that big banks shy away from either like real estate investing.

And, @Chris Simmons gave good advice on the corporate veil. Structure a loan from xmas tree to you personally and from you personally to the new LLC.

To answer your main question, the bank will ask you what the funds will be used for and a typical response is "working capital to operate your business". Once you get the line of credit they won't really have any say how you use the funds so you can fund real estate investments if that's what you want to do. I'm not sure about the corporate veil so hopefully someone else can help there.

With that said, offers in the mail from banks usually state what terms the perfect borrower can get and for business loans the perfect borrower doesn't always mean someone who makes lots of money and has a 780+ FICO score. I worked for a bank and one of the important approval factors was based on the industry the business was in. For instance, 2 clients who both show profits of $350k/year on the taxes and both have 780 FICO scores but one client is a dentist and the other is a real estate investor. Almost every time that dentist would get the $100k line of credit and the real estate investor would get something significantly lower like $15k. Banks target industries they like to borrow to and usually real estate investors aren't the target market for the bigger banks.

@Chad Kerlin

Some classes have great info but you can probably learn most of the same stuff by taking the time and using the tools and resources on this website. I doubt that clasee will have any secret funding sources so don't expect to get access to $500k just by taking the class. Also, to wholesale deals doesn't take any money and it's a good starting point for someone like you with no capital.