All Forum Posts by: Peter Mckernan

Just Go Dominate 

@Matt R. Yeah, the VA 0% down can be a tough buy in the sense that you (the buyer) is putting it all on the line to purchase that home/condo/small multifamily. The extended leverage could cause issues in a bad turn in the market. If someone buys with the VA loan the perfect choice would be to have the cash flow build a reserve, and then refi with cash down sooner than later.

@Michael Swan Great Buy!!! Yes, I can see why you want to pull that equity out. Continue that strategy and it can double and triple your net worth quickly! 

Good job! 

Hey @Michael Swan

This is great! This shows that gaining knowledge by going to seminars, tweaking what you have, and applying good financial sense to a person’s finances can have huge benefits! It is awesome that you were able to see what you needed to fix and make the necessary adjustments to achieve a better return.

Thank you for sharing!  

@Brandian Ross

I would suggest starting at a smaller multifamily (3-4 units) then go into larger multifamily units. You will get the hang of the process and management, then you’ll be able to scale up while building on the experience you have from the smaller unit complex. 

You can start with a SFR; however, if you are looking to eventually moving to the multifamily realm it would behove you to jump into multifamily and skip the SFR route.

@Lou Croce

You can form the LLC in the state that you are buying the property, or in New Jersey. Look to see the best position and protection for the LLC as @James Miller mentioned those three states would be a good option too! 

I would do some research on all five of those states and also discuss with an attorney to make your final discussion.

@Tj M.

Is the house able to clear that total debt if you do sell it along with covering all selling fees? If that is the case that would be a good option to exercise, or you can pay off the second like it was person debt and keep the house. Either option is good, but I would suggest if you do not have the cash upfront to pay off the second, or a least a lot of the cash, I would sell the property take the cash after the sale and fees and then look to rebuild a downpayment for the next investment.

@Thomas Ramaglia

Different lenders have different requirements that they set into place, some lenders are able to bend on certain requests and deals, and then some are stuck to a fixed criteria and not able to move an inch (Wells Fargo or B of A). Smaller banks can work with a buyer (you) if they can see the earning potential (multiple units) of the property you are looking to buy. 

If the property is a SFR and there are no comps, you'll have to obtain other information to present to the lender for grounds to show what the worth is. This could getting two or three bigger and smaller properties in the same area that have sold in the past three to six months, and give them a basis to comp your property that is in the middle of these other properties. It will take a good presentation, but if you working with a smaller community bank, or credit union they will be more willing to listen then bigger banks.

@Oziah Tamam

This is a questions you’ll have to answer for yourself. It takes a lot of work to network and find deals as a wholesaler, and a lot of deals that wholesalers find are not that great. The key is to work hard at networking and building a buyers list, which usually is only about 3-4 key people. 

The wholesaling game can be one of the most profitable; however, as with niche in real estate it takes patience and a tremendous amount of hustle to start to get into a successful position. If you are looking to build capital this is one great way to do that, or you can take the route of getting partners for that first deal. 

In real estate it is finding a niche getting to know that niche very well, and then capitalizing on that niche because you know it better than anyone within that specific niche. By focusing like this you will beat out the other random investors that are investing today when the market is great, and buy up those properties from them when the market turns south. Finding what exact time the market will turn south is a guessing game and is not, "calculated risk."

I would always suggest to leverage as little as possible and especially use this thought process in great times, because once those great times crash like they did in 2008 the better position an investor is in with regards to leverage will allow that investor to step out of a crash easier than the investor that has multiple properties with max leverage on all of the properties. The maxed leverage model can cause the investor to be in a rock and a hard place once the market turns by having to pay all those high monthly mortgages with increased vacancy rates due to tenant job loss. 

The direct answer is do what you can that is financially smart (for your situation), in a market you know the best, and without overextending yourself.