All Forum Posts by: Ariou B.

Welcome to BP Ethan! Let's keep in touch. 

@Marina Flu how you looked into San Bernardino/ Palm Springs or Lancaster/Bakersfield area? They're far, but they're much closer than out of state. 

Lenders (banks) typically don't want to fund more than 80% of deals because if the investor (us) make mistake in our numbers, the lenders can get their money out before the ship sink completely. They want to see you got some skin in the game per-say. Also IMO it's good to have a good GC by your side all the time, but don't lean on them too much because after all it's your money in the deal, not his! Shop around, learn the price per SF of each material or price of each item. Go to Craigslist and find some wholesalers/manufacturers in your area. Do your own numbers. 

Lastly to answer your question, here are your options if you want to get into REI but don't have money or experience:

• Help to fund someone's deal. Partner up with your local REI, help him to fund his next deal and ask him to tag you along the entire process. Tell him you'll help him with whatever he needs for some profit (expect to get less than 50% of profit).
• Fund your own deal. Find another person at your level of experience and buy your first deal together. I prefer this one because you'll learn everything from scratch and you'll make 50% of profit if everything is equal between you guys
• You can also get some personal loan, either from friends and family or from the bank to help you with the downpayment. But it will negetivly affect your Loan To Income ratio and shoot yourself in the foot.

@Craig Garrow I think it really comes down to location, location, location. Self-storage is appealing in dense neighborhoods where there are lots of apartment buildings. 

RIP Andy :(

I knew Andy from my undergraduate classes. A very ambitious person to say the least. Unfortunately he was involved in a car accident on 1/14/2017 and lost his life. 

Follow your dream folks and live your life to the fullest because you never know when your time is up.

RIP my friend

https://www.gofundme.com/andys-funeral-services

The big thing that you're missing, based on my reading, is tax treatment. According to the Rich Dad Advisor books (as well as other talks I've heard on the topic), if you are just doing passive buy and hold, then an LLC is probably best. However, if you are doing anything "active" such as flipping or wholesaling, you want to do S-corp (alternatively you can file your LLC to have S-corp tax treatment) because you don't want to have to pay self employment tax on all the profit. You can take a reasonably salary, which is subject to self employment tax, and then disburse the remaining profits free of that tax. So you could have tax savings there.

Best to discuss each individual's situation with an accountant and/or attorney.

@Jason Malabute,

@Sam 

@Sam M. is absolutely spot on.

Here is an example:

You're trying to purchase a 4-unit building and each unit is currently being rented out for $1,500/month. Your gross salary is $120,000 year or $10,000/months.

This means your "income" for purchasing this 4-unit building can be a combination of $10,000 + (4x$1,500)x0.75 = $14,500

If you're trying to live in one then subtract 1 unit from your income.

I hope it make sense. 

Welcome to BP @Keisha Forsythe!

I started less than 3 months ago and in this short period, I was able to find a business partner, analysed dozens of deals and recently we just closed our first property! All thanks to BP! Work hard, the hardest part I believe is getting started. Good luck!

I really enjoyed browsing your website @Andre Silva, welcome to BP!

@Andy Bankston thank you for making this sheet. I'm going to update the prices based on LA county and share it with everyone. Thanks once again!