All Forum Posts by: Ryan D

i've heard of the carry back idea, but not sure how that works. does the seller basically lend me a portion of the purchase price? for example i purchase for 50K and get 25K from the bank and 25K from the seller? then i basically have 2 mortgage payments? i win because i save money up front and the seller wins by unloading the property, yet still making $$ each month?

Wanted to ask if anyone has any ideas for how I can finance a duplex.

In a nutshell: I've got excellent credit (750) and 20K of savings. I figured I'd be in a good position to pick up a duplex down the street, but have realized going the conventional route is not going to work. Reason being, after all is said and done I would be left with basically no reserves. The property has a lot of nice updates but also still needs about 5K of work. The owners are desperate and asking me to bring any offer to the table. The current asking price is 70K, but if I could get it for 55K it would cash flow quite well. The main thing I'm worried about is having no reserves, as the property needs some work and is currently vacant. I'd like to buy and hold.

Has anyone heard of taking out a conventional loan and then basically refinancing within the first couple months to recoup your down payment? I heard about this strategy from David Campbell (Hassle Free Cash Flow Investing). Does anyone follow him? What about owner financing? How does that work?

I'm just trying to brainstorm. Any input is welcome!

Hey guys a couple other quick questions... Anyone have a general rule of thumb for estimating misc. expenses throughout the year? Maybe a certain percentage of the sales price? Also, when determining NOI, one should figure the vacancy rate into that, correct? Any feedback would be appreciated. Thanks again.

Great feedback, thanks all! Steve, I've been playing around with Zilpy and that's a pretty cool site. I'll definitely keep that bookmarked. I was kicking around the idea of joining a local RE investment club and that's sounding like a better idea every day. I'm also working on putting my investment objectives into writing. That way I can be sure to stick to a plan. I was looking at a 10-15% cash on cash return, CAP rate of 7 or higher and a GRM of 9 or lower. It seems like those numbers jive with what you guys are saying. Granted, it seems all these fancy equations won't apply to my duplex, it'd still be nice to have them as reference. Thanks again all, happy investing!

I'm looking to purchase a duplex in an area not far from my home. Seeing as I'm somewhat familiar with the location, I know what rents should be. I also know of several websites such as "Rentometer" and "RentSlicer" which help to further nail down the average rents for an area.

That being said, how do I find the average vacancy rate and cap rate for a specific area? Do I need to call local property management companies? And will they even provide this information to a random caller such as myself? Are there websites out there that will help with my research?

Bryan, thanks for the link to the other thread. It's very helpful. My apologies for starting the debate all over again, but you guys have been a great help. As mentioned I think I ultimately need to sit down with an adviser to discuss my specifics.

So yeah the general consensus seems to be avoid whole life eh? Why do finance people push it so much? Is that what they make the most comission on?

Bryan... No I don't have kids, but I was exploring my options for future "creative financing" AKA being my own bank. Something that could help me finance/improve property in the future while also providing a death benefit to my future family. Seemed like it might be a good idea to lock something in now while I'm young. However, everyone's feedback has started to change my opinion on that. Has anyone heard of these guys? http://www.paradigmlife.net/ This is where I got the idea to look into whole life not so much as an investment but a savings account with a death benefit. I heard about them on "The Real Estate Guys" podcast.

Tim/Charles... first off, thanks for the feedback.

Tim, it seems to me like based on your description that term insurance would serve the same purpose? And from my research term insurance is quite a bit cheaper than whole life.

Charles, from what research I've done it seems like you're right on with your summary but I've been told interest rates are around 3-4% (tax free). My purpose for using whole life would basically be a glorified savings account. I'd deposit RE cash flow into it and down the road draw from it (tax free) to make improvements to real estate, acquire new real estate, etc. Any thoughts on that? Of course if Congress passes new laws, that could cause a problem.

I'm wondering if anyone has any advice/opinions on using whole life insurance to supplement my real estate investments. I'm currently 25 and am debating on whether or not I should set up a policy now while I'm "young". I would fund until I turn 65 and after which the policy would still continue to grow (DB and CV) Also, I would be able to take out cash value at any time (tax free) which could help grow my real estate investments. I was thinking about setting aside $100 per month. I've heard a lot of talk about this lately and am having trouble filtering the good advice from the bad. AKA the advice people selling life insurance are giving. One of my mentors had a whole life policy at one time but canceled it after a few years and now only has term he swears that whole life is a scam. Anyone else have thoughts/words of wisdom?

Hey all thanks for the great feedback/article. It seems like my best bet for a deal like this is going to be work with the bank who owns the property for the loan and come up with most if not all the money myself. I've got a call into the agent, hopefully I can get some details from him.