All Forum Posts by: Matt H

Hey how's it going....

Sounds like you're on the right track anyway. One thing that will help you along the way which I'm finding really handy is this Post It Note software. It's free, and you can get it at http://www.download.com/Post-it-Software-Notes-Lite/3000-2351_4-10508740.html?tag=lst-0-4
It definitely will help with keeping high priority tasks right on your desktop to remind you of things.

You have some good ideas. However, let me clarify a few things for you if I may...

I'm not sure how much debt you have but you're problem may not be your debt, because most everyone has some bad debt. But it maybe that you're paying too high interest. So go to the bank and and try to get a debt consolidation loan. Try to get them to give you a percentage in the single digits. And shop around on that. Make lots of calls. There's most certainly someone who can lower your payment.

I say that because what you want to do is save every penny you have toward making a purchase of a property. What you want to find is a property that you can live in and also flip. That way you don't have to pay rent. You'll simply flip it and move on to your next flip. Off your very first flip you might have enough to cover part or all of your bad debt. But again it depends on how much bad debt it is. If it's manageable then just keep paying it down slowly.

The other thing is don't focus on too many things at once. Just focus on completing your first flip. Also if you don't have money for the down payment that's okay. What you need to do is try to exhaust all your other options for instantly borrowing any down payment that you might need. For example some options you have are:

-Lenders that go up to 100%
-Taking out a 75% first and getting the vendor or third party to carry a second at 25%.
-Liquidate any RRSP's or whatever tax haven contributions you have, savings or other assets to come up with the downpayment
-borrow the money from a friend or relative offering them a stake in the flip.
-Borrow the money from an invest. Simply take out an ad in the paper mentioning your looking for investors. And offer them a stake in your flip.
-Borrow the money from the realtors commission in the form of a note, if you have a good relationship with a realtor that is.

Just try to come up with some instant way to get the downpayment you need. If you knock on enough doors one is bound to open. I say this because if you start saving for a downpayment your efforts are rather futile. The reason is because realestate continues to increase in value, plus unless your a really good spend thrift, and no offence but we both know you're not, that will take too long for you too do. You have too many bills and other stuff that will continue to tap any savings. Meanwhile realestate prices are going up and up. So it's better to try to borrow that money by means of one of the avenues I've suggested.

Then once you pull off your first flip you might come out ahead $50k or even $100k if you're lucky. If those bozo's on the show "flip this house" can do it then you can do it even better, because you have their mistakes to learn from. When it comes to flipping, the key is not to do much and just get it back on the market asap. So it's paint and carpet and then flip. Remember you're not the one who's going to be living in it, so it definitely doesn't have to be perfect in order to sell. Some property furniture staging and just having it extra clean will often do the trick. And if you carpet and paint that covers like 95% of the house as is. Paint the ceiling too. Also try to get a Home Depot card. That way you can defer payment on any materials such as paint/carpet/supplies for six months. By that time you'll have flipped the house, meaning you have no upfront costs in doing the rehab.

Anyway good luck with that. Remember don't spread your resources around. You're in no position to do that. If you can manage the debt manage it. If you can't get a debt consolidation loan in the single digit percentage. Because you need any money you can save for buying the house and doing the flip. Because there's other costs that will come up. ie closing costs. If you do like five flips back to back always trying to make at least $50k per flip you'll have potentially as much as $250k if you save it all. That $250k will buy you an apartment building worth $2.5m. Probably somthing like 40 units or more. With the five figure per month cash flow from that you can literially retire off of. I'm serious, because I actually did everything I just explained here in real life.

Good luck.

I think you guys might be blowing this whole birddog thing out of proportion. Like who is really aspiring to become a birddog? I think people are aspiring to become REI's. And if they have to use strategies to raise quick capital then sure they are using those techniques. I just think it's the wrong term and it's unfortunate that it's spread. If I had to do that I'd still try and think of myself as a "REI" who's just trying to raise quick capital for my first real deal. NEVER as a birddog. I think people have to be very careful as to what they label themselves or what others label them. Because you're becoming the thing that you think you are. So if you're a birddog that's what you are, basically someone who's not there yet, who doesn't know the industry and is well pretty pathetic. It's not the right perspective to have. If you wanna get somewhere you always have to work in "reverse". So if you're wanting to become a millionaire via REI, and you're just getting started then the most important thing you can possibly do is start to tell yourself everyday over and over again that you are infact a "Millionaire Real Estate Investor". Because what will happen is that your brain cannot interperate that input any differently. It has to act on what it's given. So as you tell yourself you're a "MM REI" you'll more and more start taking the actions that a millionaire would take. And I guarantee if you keep telling yourself that, you will not only build up the believe system that you are one, but you'll also automatically start taking the right actions, eventually leading you to becoming a millionaire. That's how the universe works, it's impossible for that not to happen once you have the believe that you are any certain label. But if you're telling yourself that you're a birddog well gloy-gee that's like telling yourself that you're not very good and that you don't know anything about the industry. It's the absolute wrong label to put on yourself. The perspective that anyone who's a REI should have is that there a multi millionaire. Because like I said you're becoming what you think about and think you are all day long. Once you develop that believe that you are something it can either be your greatest asset or your biggest weakness. So tell yourself that you're a Multi millionaire REI, not a birddog. Because you're becoming what you think of yourself as. Ya, honestly get that term bird dog completely out of your head. It's not who you are. What you are is a multi millionaire REI, who's just raising quick capital in order to fund your first real deal.

Also on a side note to all this...my thought is that I don't know an easier way for someone to reach millionaire status than REI. It's got to be the easiest way out there doesn't it? Like where else can you make six figures even seven per deal. So if you're not thinking in terms of making millions well start too. Because it's not that hard in this industry.

Ya, that's true to some degree. I guess I'm kinda conditioned by our market up here. In Edmonton our houses appreciated by 52% last year. This year so far there up 18% and everyone is predicting at least a 40% increase. Also here in Canada we haven't had the housing turn around like they're experiencing in some parts of the US. So ya do your research for sure.

But my thought is that you should never let fear hold you back from trying something new like buying an apartment. Because you can generally tell in advance how much the building is making based on the statements. So in the absolute worst case scenario which will most likely never happen, then you just sell the building and get your money out, possibly more. But chances are likely you'll never have to worry about that.

The beauty of pretty much any rental property especially apartment buildings that you get paid in so many different ways. Like just the other day I was looking at the rate of my mortgage paydown on a new apartment building I bought and it's starting at $3k per month. I didn't even factor that into the equation, let alone cash flow, and appreciation. Anyway I'm rambling....

How can you retire on 40k? That's impossible. But if you get an apartment you'd have several thousand in liquid spendable cash each month after all expense and debt servicing, to do whatever you wish with. Buying a building isn't much different than buying a house. Same steps involved basically. It's easy.

It depends how much you're putting down. If you you buy with no money down and you break even after monthly expenses then you're still ahead of the game because you have appreciation, mortgage paydown, and you're 1 rent increase away from positive cash flow. So you're return is therefore infinite.

But if you want to quickly determine what something is making then do this:

Cap Rate: is computed by taking the rental net operating income (NOI) and dividing it by either the sales price or fair market value (FMV) of the property.

Example: A property has a NOI (Net operating Income) of $55,000 and the asking price is $650,000. This yields a Capitalization rate of 8.46%

That means if you paid all cash for the building that you're ROI would be 8.46%

All I try to do is come up with the biggest mortgage(s) I can find and then determine how much cash flow is left each month after expenses and debt servicing. Using that you can quickly determine what you're real ROI is.

There all a bunch of terms that are going to be a complete waste of your time.

All you need to know out of that entire list are:

Subject to: Make your offer subject to whatever the standard realestate contract has in it. That gives you a certain amount of time to do your due diligence before you complete the deal. That mean the deal is Pending. So you can still back out, but no one else can buy it.

Foreclosure: The mortgage holder takes your property. This is what you do not want to happen.

But you're missing the most important word you can possibly learn. If you learn this you'll get filthy rich on OPM, you know OPium the stuff they make from poppies, ha ha j/k and the word is "No Money Down". That group of words will make you filthy filthy rich. "No Money Down". Study it. Basically in a nutshell that simply means a first mortgage and a second. That covers your entire purchase price and more if you want it to.

that's easy, as a downpayment on an apartment building what else.

Every 100k buys you a 1m dollar apartment building any day of the week!

You wanna see cash flow!!

Here's what I'd do if I were you....

I'd start looking for an apartment building. It doesn't necessarily have to be in your city/town. It can be anywhere in your state or anywhere in the country for that matter. I'm in western canada and I buy apartments in eastern canada all the time. So don't limit yourself if property values are too expensive where you are now.

What you're looking for is a situation where you could use that $40k as a small downpayment. The rest of the money to buy will come in the form of a first mortgage and a second.

So you need to find a seller who is willing to carry a second mortgage. Just propose that they carry like 25% of the purchase for five years, interest only with a balloon payment at the end. Then you get a conventional first at 75%. There's your 100% right there. Your $40k will come in handy to cover any closing costs and downpayments.

Finding just one small apartment say with 30 units would set you up for life with good cash flow each month even with a first and a second. Trust me it's the safest and most solid way to invest in realestate there is.

Turn your drive time each day into listening time.

Get Carlton Sheets No Money Down. Listen to that daily too and from work. You'll be an expert in no time.

Also get Dolph Deroos "Real estate investors college". Listen as you drive.

the birddog receives the least, then the project manager and investor are about on equal terf.

Do not ever do business with friends or family, unless to you losing their friendship you can put a price on. Because I absolutely positively guarantee you that you'll run into a situation where they're a disagreement and you'll end up damaging the relationship or losing it completely. Just allow your dad to do whatever he wants just so that you don't damage the relationship. Then never do business again. That's absolutely crazy in my mind. It's like playing with dynamite, and for what?