All Forum Posts by: Matt H

Now use that as your 10% downpayment on an apartment building!

Ya I'm not sure what I'm gonna do after that. I guess I could just take break until the next deal comes along. But I think it would be great to come up with some kind of new career of some sort. I haven't worked at a job for 9 years now. So sometimes I wonder what it would be like to work just a regular job again. Just for fun and for the social element of it. Just a thought.

Quadcam....

Well you have the right idea, but I use to drive neighborhoods at times but I didn't find it overly productive. I think you could do a lot more by finding all the major MLS sites in your city/state/country and the private type listing services such as "Loopnet". And just focus on reviewing them. Even for that matter to review properties in your city/town. Driving around using up a lot of time and a lot of gas. One way you can do it more productively though is if you drive to work each day then just take a different route through the areas that you think might be good areas to invest in. That way you're killing two birds with one stone, cuz you have to drive to work anyway. Another way is to do one of those "I Buy Houses" bandit sign campaigns and see what kind of results you get from that. That way the sellers who are also driving around will see your signs and call you. My friend use to do that. He said once in a while you find a deal. In general though it's all a numbers game. So you're goal should be to be trying to get to writing 100 offers by any means necessary. That way at least 1 is bound to reap you say $30k or more. Then just keep flipping those funds over and over, until you have your 10% downpayment to go apartment shopping.

justinsdilemma...................

Here's what you do. You get some store cards, like Sears, Home Depot, etc. Buy stuff on the card (it doesn't have to be a lot), make a few minimum month payments, then pay them off. Get a credit card. Do the same thing. Order some stuff. It can be anything. Make some minimum payments, then pay off the cards. Then go to your bank, get a car loan. Go buy a cheap car, and then make some minimum payments, and then pay off the car loan. You're not getting any of this credit because you need it. Do it knowing full well in advance that you have the cash to pay off the card. But do it as a way to build up your credit. As doing each of these things: a few store cards, a major CC, and a car loan will get your credit back up.

The other thing though is that you don't need credit to buy property. The only time you need it is if you're dealing with a lender. But if you borrow your money through either private investors such as well off professionals who want to invest in something but don't have the time or energy to actually do REI, but might lend to someone and take first position on the property. The other way is through seller financing. Find a seller who has a house that's been paid off a long time ago. Is selling to move away to FL or AZ to retire. Tell them that you'll pay list price for their home, you'll close quickly and you'll pay them a premium on their money, as long as they agree to lend you the equity in that home. Then lastly there's a lot of lenders who deal with people who have bad credit, and they simply charge a higher interest rate for their mortgages. But if you do it right you can make out pretty good. Because once you take possession of the home you have various options. You could immediately try flipping it for profit, or another idea is to just basically turn the place into a rooming house and rent out each room. So for example if you could find a home that had 3 bdrms up and 3 in the basement, you could rent out each room. Just get a lock on each doornobe and do that. If you rent out each one you'd have more than enough to cover the mortgage and have a little bit of cash flow every month. The other thing to remember is just that it doesn't matter what anyone thinks, or how you get from point A to point B. You just have to get there. And if that means doing things that seem a little unconventional that's okay. It's unconventional thinking that will get you ahead often times much faster than thinking things can only be done one way. Anyway good luck.

You might have to look in other cities/towns/states . I have to these days in order to find anything that cash flows. So I look out east, and I had to fly out there a couple times now to look over things. Never thought I'd be doing that. And at first it seemed way out in left field but now I'm totally comfortable with it. Because really when you think about it, it's only a minor inconvenience to have it located far away. Airfares are pretty cheap these days. Even if it was local, if you use a property manager you'd probably rarely go down to see it anyway. The last time I went to see my building here in the city was about two or three months ago I think.

that sounds like the movie "The Black Hole", and no, not that porno movie, you sicko!!!, get your mind out of the gutter!!! ha ha j/k

EWilliams....shop outside of your city in other cities/states. That way you can make a lot more offers. Some investors could care less where the property is. It's only usually the inexperienced or hands on types that want it near by so they can go babysit it everyday. Me, I couldn't be bothered to go see the building. As long as it's cash flowing and under good property management, that's good enough for me.

Refresh:

questions, questions, questions.....wow lots of questions.

A) Go to ebay and buy a used or new copy of "Carlton Sheets No Money Down".
B) Start listening to it, too and from work everyday. Simply forming the habit of turning your drive time into listening/study time will educate you in no time.
C) Join a local REI club in your area.

If you actually do this starting right now, I know already for a fact you'll do extremely well and become an expert in no time flat. But if you don't, well then good luck to you.

Well my friend did the deal with a regular bank. But ya there's sometimes those stipulations. But not always. I just got a loan for a building and I got a second on it in the form of a VTB. But not at 35 at 5. ha ha.

1 day on the MLS. ha ha, then I bought it. I could tell just by look it over that they were leaving a lot of cash on the table. But I don't want to get into house flipping mode. I already hurt my knee moving in. Man, is your health ever more important than money. Because once you can't walk, then what. So I'm gonna try and stay put this time and just enjoy it.

Rosco....

You're right in that it's tricky to unlock the amount of funds you want. Banks only lend up to 75% in a HLOC situation. So if you're telling me that you have 200k in equity then the only way would be to sell off your home. So if you have a family that's not easy to do. Might not be possible at all. But if you don't then, what you might be able to do is liquidate and then just buy a cheap condo, and put the rest of your stuff in storage temporarily. Might seem like a big sacrifice, but for a condo you likely could get one with 5% down. So that's only a small portion of your $200k. That would still leave you with as much as $190k to work with. Using that you could start making offers on sizable apartment buildings. The loans will come from various sources. For example if a building has good cash flow there's lots of lenders all over who will give you a first at 75%. Just find an experienced "commercial mortgage broker" and they will find you a mortgage almost guaranteed. Then when you present the offers on buildings your gonna ask for your second mortgage up front which is carried by the owner of the building. They will lend you a small second. It's known as "seller financing" or getting a "VTB" (vendor take back mortgage). So part of the money they normally would get remains in the building as a mortgage. That way if they can carry a 15% VTB, you only need 10% down. Then later once you got the building and it's cash flowing well you can use part of the heafty cash flow that's coming in to quickly make a down payment on a nice big home again to live in. Cuz you'll have as much as $10k per month liquid spendable cash to do what you want with. I know this all might seem really crazy, but it's so not. It's as difficult as me going downstairs and making a peanut butter sandwich. It takes that much brain power. You've bought a home so you know how to buy property already. Now all your doing is putting your money to work for you, so that you don't have to work so hard if you don't want to. And tell me this, what's harder to do: A) to continue working hard your entire life for the next 30 odd years 9 to 5 every day, or B) to juggle the equity from your house, into an apartment which might displace you for six months to a year, but then allow you to retire if you wanted off as much as $21,000 coming in each month in total, and not even have to work another day in your life if you didn't want to. If it were me and it is me, I choose A. That way I can sleep in tomorrow morning on a Wednesday instead of having to get up for a job that wont' end. Even when you get to retirement years, you might find that you won't have enough money to ever quit your job. Most people run into that problem these days. So better make some moves now so that you'll have lots of options in life. It's all up to you though. But part of becoming a REI is making a leap like that. It all seem crazy now, but if you did it, I know for a fact you would not regret it. You should try to realize that one key ingredient of becoming a REI, is to get your cash leveraged and working hard for you. Leveraging it into a situation as I just discribed and getting it working hard for you 24/7/365 means you don't have to work hard anymore. Start to try and get comfortable with that idea. Because that's like the whole premise of REI in my opinion. It's the "I" quadrant, in which you're now "employing your money", not the "E" quadrant where you as a person have to be the one employed.

quadcam79.....

I can tell by a quick glance that won't work. See here's the thing. You say 2/2. I'm assuming you mean 2bd and 2bath. Why does the apartment have 2baths? That in most places is a higher end apartment. Which is why you're only getting 8 units on that deal. And at only $700 per month it wont' support the mortgage. If you're amount down gets you a 1.1m dollar property you need to be finding something with as many units as you possibly can. Sometimes you can even look locally to do this because some places the value of property has gone too high for any property to cash flow very well. So you have to look in different towns, and cities and states to find a building that will cash flow. You do that using the MLS and sites like Loopnet and others. Because you should try to find something that the per unit cost is really cheap. Like right now I'm buying a 29 unit apartment which is going for $820,000. About $29,000 per door. And the rents are $500 and $600, half ones and half twos. That kind of a building cash flows really well and will more than support a first and a second and still give you cash flow. Look for something like that. You generally will find those in smaller cities. Ones that only have up to say 100k people. But I wouldn't buy anything in a city that has a really small population like under 50k either. You kinda have to do some research on the city or town prior to buying and find out what industries are supporting that city and how it's doing economically. Cities give out various reports on their websites detailing what economic activity and projects are happening, and how things have gone for the last x amount of years. So study that stuff and find a town or city to buy it. I found a little city, and now I'm buying lots of buildings there because they're cheap and they all have great cash flow. And there's still lots and lots of smaller cities like that all over. Also find out how much property has been appreciating in that city / state over the last decade. Try to find the places that it's going up faster, maybe like Arizona or something. (I could be wrong) So no, that one isn't going to work. Generally rentals should also only have 1 bathroom, as those have the best economics of scale (or sh** flow.... j/k), because you'll be able to get more of those in a building at a cheaper per door cost which is what you want, lots of units. So try and look for that. Like I'm thinking to myself that in the US you guys must have all kinds of good places to go apartment shopping, because there must be tons and tons of cites with that roughly 100k population.