All Forum Posts by: Salvatore Lentini

If you'd like to go further down the rabbit hole...They are the preferred lender/sister company of New Western Acquisitions.  How does everyone feel about them?

@Dakota Cochran - there are 2 different schools of thought on cashflow, equity, LTV. Some like to pay off their debt as quickly as possible, others like to leverage as much as possible and then there are those in between that leverage but not to the max. I personally believe in that last strategy. I leverage my properties so that they still cashflow well. Not as much as they could but I don't leverage to the point of where they are break even every month. I also make sure to have a decent amount of reserves on hand for the unexpected. But, I take the cash outs to expand my portfolio. I end up with more rentals which in the end helps diversify my portfolio (property type and area) and increase my cashflow. So I would say cash out, but only if you have plans to invest that money in something else that will produce more cashflow. And make sure you don't decrease your cashflow on the 1st property so much that any little unexpected issue will cause you to go cashflow negative.

@Stephen Jones - is there "value add" in the deal? If so you could do a Master Lease with Option. It's sort of like Rent to Own. You pay them an agreed upon amount each month (rent) but you run the property as if it's you're own. And you're not just renting. You have an interest in the property...you control it because you have the "option". You collect the rents, pay the bills etc. If you're improving the place and getting rents up then after a certain amount of time you can purchase it for a lower LTV (because it will be worth more) and you'd have to come up with less down money. Of course you'd need to find out before hand if your lender and seller would be on board with that plan.

@Shannon Glanton - Welcome!  You are 100% right.  The internet is a blessing and a curse.  All the information you could possibly need is out there somewhere but it becomes information overload and contributes to the analysis paralysis you're experiencing.  I experienced it as well.  You just have to go step by step.  You'll be much better served if you ask specific questions.  Feel free to message me.  I've coached a lot of beginners over the past few years and I'd be happy to point you in the right direction.  The one thing I'd say that should help make it feel less overwhelming... there is no "one" right way to start investing.  There are lots of right ways.  The biggest, most helpful thing you can do is pick one that best suits you and get started.  You'll learn 100x more by doing one deal than you can from reading 100 books.  Ok, that might be a bit of an exaggeration but you get what I mean :)

@Dwayne Saxton - in this environment it's tough because there's such a low amount of inventory that it's a seller's market.  Meaning, it's harder to find motivated sellers (because most sellers know how in demand houses are now).  That's the downside.  The upside is, if you can find a property and get it under contract your wholesale fee can be huge.  Much bigger than in a normal environment.  Happy to answer any specific questions you have via message.

@Bassel Tabbara - Welcome to real estate investing.  Message me with specific questions and I'd be happy to help point you in the right direction.  And by "right" I mean the best direction for you as there are many "right" ways to invest in real estate.

@Jonathan Crain - welcome.  Let me know if you have any questions.  Love helping out new investors.

@Andrey Zohrabyan - I always recommend starting out as close to where you live as possible.  I know that's hard in high priced property areas like CA but even if it means a drive of an hour or two that's better than having an out of state investment that you'd have to fly to get to.  Not worth it unless it's a large multifamily especially when first starting out.

@James Brewer - it's called a CELOC as opposed to HELOC (C = commercial, H = home). They're not very common and the LTVs are lower so usually there's not enough equity to pull it off. You're better off focusing on adding value (through increased rents and decreased expenses) and then just doing a cash out refi. Use the cash out to pay off the HELOC. Just be sure to add padding to your numbers and timeline. The property may not appraise for what you hope and there are fees to factor in. It's not as simple as it seems to buy, refi and get ALL your money back. Numbers on paper don't always match real world transactions. It can be done but don't assume it's easy and that it will happen every time.

@James Brewer - At this point in my career I'm always in favor of more doors, less buildings.  But make sure you learn to walk before you run.  Why two 4plexes or an 8 unit instead of just one 4plex to start with?  More importantly, what's your plan to get your money out of the property and back into your bank account?  If you're looking to scale quickly (and it sounds like you are) you need to figure out how you're going to have the extra capital laying around to keep buying and buying.