All Forum Posts by: Ronnie Galindo

Hello BP!

I have been doing a direct mail marketing campaign and got someone calling me. She owns two acres in St. Helena with two residences on the property. The only reason she is willing to sell is that it is far from her current living situation and she has a hard time maintaining it. She knows the property is old (built in the 1920s) and needs some love. It caught by eye due to not being landscaped like the other homes, old run down fence that needs replacing, along with exterior paint needing updating. I have not been inside nor around the property yet due to them being rented (one tenant is long term and the other is just over a year and both are month to month), just the initial contact.

With that said, I am NOT a wholesaler. I do not have an RE license to wholesale thus why I am looking for a partner. There are not many comps around the area with this much land but the ones that have sold around this property are mostly above 1 million and the home next door (on 1/3 acre) is worth around 2 million. I have not talked price with her nor do I know more specifics (like square footage) of the properties yet. I do not have enough capital to acquire this property alone nor do I have the experience with a flip so I would be looking for someone to lean on for this endeavor.

Anyone on BP willing to do this JV and make some money?

@William Bartling, You have a good plan going! I also am using my VA loan on my primary. When I last spoke with my Mortgage broker, he told me as long as I refinance into a conventional, I could use my VA loan again. The problem being that you will have to come to the table with the closing costs and any down payment (if the home is over 80% LTV). Further, in order to get a good interest rate, you will need to have a signed lease for your current home to show how much the rent will be paid and how much profit (hopefully) you are getting to off-set that loan so they don't see it as a current debt when getting the new loan. Lastly, you will have to pay the VA fee again when you buy your next property but hey thats the cost of using the VA loan right? Good luck!

@Tim Lazor, Become a pro member here on BP and use the Insights page to review all the metadata that they have compiled. It shows you how the markets out there are doing and will give you a lot of information to help pick a market. My wife and I sat down and just really looked at population growth and jobs in the area after checking the 1% rule for a lot of places. We knew our entry (median sales price) had to be lower due to less capital to start with. So we picked Columbus and Houston. Also in the Webinar archives, there is a video on picking your market (I think page 6). Check it out and overall just figure out what you'd like, cashflow, appreciation, both? Once you start picking your parameters, it will start to get easier. Good luck and don't hesitate to reach out! 

@Matt Caresco and @Erik B., I had the hardest time picking as well. My wife and I went back and fourth on markets and finally decided with the help from BP. So what we did is since Matt, you are a pro member, we went to the webinar archives and watched the video "how to use BP to select your market." It showed us how to use BP insights to see everything thats going on with markets. Then we ran numbers on pop growth and job growth as well as vacancies and median house prices (had to be affordable for us). We are playing it safe and looking at Houston and Columbus where the entry point is lower so we can get into the market with far less than here in the Bay Area. Overall, it will depend as well on what your goals are. If you want just appreciation then there are markets for that, if you want straight cash flow, there are markets for that as well. You can get both too! just depends. You don't necessarily need people you know personally on the ground there (it does help tremendously though). By doing what @Remington Lyman suggested from David Greene's book, developing your Core 4 will be the money maker. If you have not read David Greene's book on out of state investing, buy it and take the time to read it! Its great and will be helpful. Lastly, reach out to people, network, and just jump in. We learn well from positive experiences but learn best for the negative ones. Make mistakes, learn from them, and never give up!

@Aemon Gariety, it all depends on what type of home you want, what kind of equity you are looking for (strictly cash flow or appreciation or both!), and overall how much money you'd like to spend. I would read David Greene's book Out of State investing (which @Remington Lyman is referring to Greene's article for the core 4). I would also highly recommend getting a PRO membership because then you can watch the webinar on picking a market as well as using the calculators to analyze deals (trust me, you will analyze A LOT of deals). Columbus (as the Reafco guys have said) is a great market with both cash flow and appreciation. But don't take anyone's word for it, analyze it and figure out if it will work for you. 

Good luck and don't be afraid to connect with people here! 

@Nathan Adams, I agree with @Jonathan Styer. An appraiser in my experience does not look for permitted work. They just look at the overall condition of the home, Sq ft, and comps around the area to then place a value on the home. After the appraiser has placed the value, then the lender can see how much they will refinance for and what your terms look like. Some lenders don't even re-appraise, just all depends on what you are trying to do. 

Go forward and get that money! Good luck!

@Jasone LaBrone, great job! If you are thinking about moving (and want to keep this home as a rental) then I would look into a re-finance. Since it seems you have some reserves and have some equity, I would look to turn this into a conventional so you can use the FHA again on another property. See how much you would have to pay for the re-fi and see how much the mortgage would be after its all said and done. Then see if it makes sense as a rental (use BP Calculators). If it all makes sense, pull that plug and get you another property with the FHA loan after the Re-fi. If it doesn't make sense as a rental, maybe sell it and scale up to a bigger (more units) property and house hack that! Good luck!

@Damien Pulvino I can understand your conundrum. I too was in it until I picked Columbus as my spot (and key the ReefCo gents). Columbus is a great starting point (median sales price of $208kish) where you can get a SFR or Multi for under $200k, fix it up and then gain some equity or profit, depending on your exit strategy. Columbus is also gaining in population and job growth so there is that too. Ultimately its up to you on what you want to do and then build that core 4 but for a lot it is Columbus. Good luck and don't hesitate to reach out!

@Alex Tang, in short, it depends. As @Nathan Gesner said, they knew it was unfenced when they rented the place. A lot of times, tenants want to ask for things, not even thinking of the cost because it's not their money. So question is, do you want to keep this tenant? Has this been a long time tenant that pays on time? Of has this tenant been the one that always seems to have a request/problem?

If you want to keep them and believe they will be long term thus saving you turn over money, then I say put a fence in and keep the cash flow coming. If they are becoming an issue/headache, then tell them no and they will inevitably move out or figure it out with their dog. Good luck! 

Thank you @Yolanda Washington. I will check them out!

@David Song. I will let you know if I find a deal. Since I am not authorized to wholesale I will be looking for a partner. If you are up for that, then I will keep you in mind when I find something. I just sent out 127 mailers and will continue to add to my leads list as I drive for dollars. If anything comes my way, I will let you know!