All Forum Posts by: Paul Shannon

It's way too early to assess the impact of this virus on real estate in any market.  If there ultimately is an impact (the virus doesn't go away and comes back harder in the fall), Las Vegas will likely be hit just as hard or harder than 2009 due to the foundation of its economy.  

@Robert Timm

You can get loans in the name of your LLC, but you will still have to personally guarantee them. I started an LLC for asset protection. By violating the "due on sale clause" it exposes you to "piercing the corporate veil". A lawyer would have a field day. In addition, its time like the time we are in where a bank may potentially call a loan for violating the due on sale to raise cash and reduce risk.

With that said, Corevest, Lima One, Visio to name a few are players in the lending space you're looking for.  Your issue may be that their minimum property value to loan on is $75k for a fixed 30 year rate.  However, I believe if you bundle a few properties together (4-7 in visio's case for example), you can still get a 30 year fixed rate.  But it creates a different hurdle......you have to have a lot of cash to build your property total up before getting a loan, or buy a package of properties from another investor that meets the bank's underwriting guidelines.

Patience will be key b/c as others have mentioned, there is a lot on the plate of a PM.  

Another potential avenue would be to get your RE License, make money representing buyers and sellers, and use that money to invest in real estate.  Get some property management software that you can grow into to manage your own rentals.  Once you have a few rentals, you'll have some experience with tenants and will have built some relationships with contractors, attorneys, etc.  

Unsecured debt is much harder to raise.  No collateral for the lender obviously.  Not impossible though.  Do you have a family member who trusts you and could borrow from.  

If not, you may try LendingClub or other peer-to-peer lending sites.  You'll probably end up paying hard money rates, but the process of getting the cash should be simpler.  

Great post Ellie.  I left my 6 figure cushy surgical sales job at the beginning of 2019 to pursue active real estate investment.  I'd add to your comments, the number one thing people struggle with when considering making the move is confidence.  

Confidence comes with experience and experience leads to competence.  I'd never recommend quitting before first getting some experience.  Experience shouldn't happen without a baseline of knowledge, but at some point you just have to jump in.  Find a someone who is where you want to be and soak up their knowledge, read everything, and then take action.  Confidence will come when you start making mistakes and figure out how to fix them.  When success happens, it feels great and makes you want more.   

Experience also gives you a sense of what you like and where you're strengths lie in this business.  I've gotten my real estate license and sold a few homes, done project management, property management, and even taken apart and put back together a toilet......none of which I particularly enjoyed.  But I now have an understanding of those processes and can outsource them.  I found I liked acquisition, negotiating, networking, and raising private capital.  I can focus on those aspects of my business and relinquish control of the other aspects that I've build systems around.  

My next challenge is starting a syndication and I'm on my way.  Thanks for sharing!

I can't speak for Home Union.  I've looked around on Roofstock from time to time, but haven't been wowed by any deals.  I know a few investors in my home town who have sold properties on Roofstock.....I know they made a very nice profit.  Not so sure about the buyer.  I'd be very selective and do your due diligence.  

Agree with @Alex Olson that a HELOC offers better flexibility. I've used my HELOC on my primary residence to purchase rentals in cash. BRRRR strategy. Once they are stabilized with a tenant and seasoned, I do a cash-out refi on the rental and pay back my HELOC, thereby recycling the capital.

I think it's a personal opinion, b/c it relates to risk tolerance. To me 65% LTV is low leverage. However, depending on the deal, 75% is completely acceptable. You may not grow quite as quickly with having a little more cash in deals, but you also won't have a dumpster fire on your hands when things don't go exactly as you planned.

We had a solid May collection number as well.  Between stimulus checks and many receiving tax returns recently, people have cash to meet their most important obligations.  Many of the 30 million out of work are getting their unemployment checks now as well.