All Forum Posts by: Josh Caldwell

You are in the right place.  You can learn almost anything about real estate investing here on BP.  Anyone can build a legacy for their kids with real estate.  That is what attracted me to RE many years ago.  Now I am retired, with no debt, and my kids college is paid for.  Unless my kids grow up to be morons, they will never be in need. 

The first thing you will need to figure out, is what sort of real estate excites you.  There are 3 general paths to real estate wealth. You can choose to be a landlord, flipper, or wholesaler.  You may start with one of those and move into others. It is a matter of personal taste,  Study the sub field that excites you the most.  For me, it was creative finance, the ability to buy with no money that really caught my attention.  Once you find the type of real estate that excites you, it is really easy to learn, and it never feels like work. 

As a wholesaler you need to have access to the property, that doesn't change because you are doing this from a distance.  You need access because there aren't a lot of buyers who are crazy enough to buy a property that they haven't seen, or had someone else inspect.   

I am guessing from your question that you don't have access from the seller in your contract (add that paragraph). I would contact my seller and tell him that I need to have someone make an inspection of the property.  If the property is abandoned, and nobody has a key, you can ask for permission to hire a locksmith and change the lock.  This isnt as tricky as it sounds.  You can also have you locksmith put a lock box on the house for you (he might charge you a bit, and you might have to send him the box).  

The good news is that most sellers want to help you, because helping you gets them the money that they want. 

What you are describing is doable but uncommon.  The problem is that most private lenders want their money back in 12 months. If you can pay the loan off without selling the property then there isnt much sense in taking that loan in the first place.  On the other hand, there are private lenders who want a long term passive income stream.  These tend to be the mom and pop private lenders and not the professionals. If you goal is to use this technique to build your roster of those type of investors, then this could work. 

The traditional way of doing this, and the easier way IMO, would be to talk to potential private lenders ahead of time.  Tell them about you, and what you plan to do. Build a list of potential private lenders.  Then when you get a deal under contract that makes sense, send it to them, and see who is serious about wanting to make passive income.  

That is what I do with my private lenders.  I package the deal for them, show them how we are going to make money, and they can either play of pass. 

Interesting question Greg. A few questions come to mind before I can answer this one.  How close are they to losing the property to a tax sale?  If a taxing entity is foreclosing, they will likely wipe out all junior liens, so it is possible that a bank many defend their position and pay off the back taxes at an auction.   The important part of this question, is how much pressure is on the sellers to make a deal before they lose their house and their credit is destroyed.  The closer we are to that date, the more leverage you have in negotiation.  

The next thing I want to know is this a rental or the family residence?  If this is just a rental, then the owners have less pressure to try and hold onto the property. A landlord facing foreclosure might just want to walk away. 

With a bit more info, my question to the seller would be "what is the least you will accept for this property?"  

That is where the negotiation is going to start. 

First off, I don't like the deal. The 1% rule is not a target for me. I can buy stuff off the MLS that will outperform that. You might want to look outside of CA.

Secondly, I hate cash on cash as a metric. Here is why. Let's say that I only had to put $100 down to secure a subject-too deal that cash flows $100 per month. If I use COC to evaluate the deal, my numbers look great, but in reality, I don't have enough cash flow to justify the purchase. I see too many investors using COC to talk themselves into a bad deal.

Cash flow is a much better metric IMO.   I want at least $300 per door, or I am not buying the property.  Sometimes the best deals you make are the ones you walk away from. 

Contact the mobile home park and ask them.  Most parks own the land and the mobile home owner just rents the lot.  In some cases the park also owns the trailers.  

Covid has really shut down a lot of meet up groups.  I run several groups in my town and we haven't been able to meet up since March. I know there are groups in your area.  I remember meeting someone who ran a group on long Island a few years ago when I was speaking to an investor group in Manhattan.  They probably aren't meeting in person, but they might still be doing some form of zoom meeting. Worst case scenario, you could organize a meet up (assuming that you are allowed to meet in small groups somewhere)  We are doing smaller meet ups in local parks. 

You can do this deal with no money but you need one more component. You need some funds.  They dont need to be your funds.  So you either need a private money loan, or a joint venture partner who has his own money.  In general, if you have a good deal, and you have access to a network of RE investors, you should be able to raise a bit of private money even without a track record.  Keep in mind, that you need to show your potential lenders a good deal, and you need to be able to explain your numbers and how they get paid. 

You might want to look into wholesaling, as a method to raise the needed funds yourself. While you market for a wholesale deal, you might just trip across a good flip property. 

If the property is listed with an agent you probably can't wholesale it for two reasons.  The first being that there is no way for you to make any money because a listed property should already be at retail price, and it is really hard to negotiate terms that a buyer might get excited about, if you arent the buyer.  That only applies to a listed property. 

The second problem is that the agent who has a legal contract isn't likely to step aside, and stop marketing this property, unless you are holding compromising photographs of that listing agent. 

You need to do some marketing and find a property that isnt already on the MLS.

The first book that I would suggest to any new investor is "Rich Dad, Poor Dad" It is an easy read, and the author is the best at explaining how to build long term wealth. He is short on specific technique, but you can learn that here on BP. I would also suggest that you locate your local REIA clubs and Meetups. They are great places for in person networking.