All Forum Posts by: Salvatore Lentini

@Edward Heavrin - keep in mind your ROI goes down down down the more money you put into the property. If you don't want to buy another investment property because you're too busy with work you should explore other investment opportunities that would give you potentially better ROI. You could invest passively by being a private lender (earning high interest), being a money partner (getting equity and a return for no work), investing in a syndication deal (similar to money partner but on bigger deals where you are one of many investors), buying another investment property and hiring a property management company, or investing in stocks. All of those options require little to none of your time and have more upside than just paying down your current 5 unit. But, that being said, there are the numbers on paper and then there's the psychological component.... the human behavior component. Sometimes you just need to do what YOU want to do even if it isn't "technically" the best option from a financial standpoint. It's YOUR life not mine :)

That's what I say as a real estate coach all the time!

@Damian Callaghan - this is the time that things get interesting.  You're right, these high interest rates kill deals.... at least in the way they are currently being presented.  Sellers have the choice of:

1) Keeping the price where it is

2) Lowering the price so that the monthly mortgage payment is closer to where it was 6 months ago.

3) Offering owner financing, seller 2nd, subject to, lease option

Many sellers are not aware of option 3 so it's up to you to present it to them!

I have a commercial deal I'm working on that was $8M+ just 6 months ago and now we're close to a deal where we would just wipe out the existing mortgage of $5.25M.  If I can make that happen it will have been worth the wait.  Sometimes patience is key!

@Carlos Valencia - I'm not a huge fan of investing out of state.  It can be profitable but there are a lot of potential pitfalls.  I get that CA is expensive.  Can you invest in the outskirts?  Even something that's 1.5 - 2 hours away is better than somewhere you'd have to fly to to visit and check up on.  Or invest passively in a syndication deal?  I always partner with one or two passive investors on my bigger $3-$7M properties.

@John Clevenger -

1) That the rules/laws are tilted in favor of investors.  And the bigger the deals get the more in tilts in your favor.  After a bunch of single family rentals (that I rehabbed and then held onto as rentals) I bought a 14 unit multi family.  I was able to buy it, rehab it, increase rents, refi it, pay back my private lenders and pull out $120K.  The $120K was tax free because it was a loan.  So it was like doing 4 single family flips but I got to keep the property and my tenants were paying the loan off for me.  Then 5 years later I was able to refi again and pull out $300K.  In another couple years I'll pull out money again.  So my properties early on have become my own personal banks (for down money).  And this is just an example of one of the properties I own (the 1st commercial property).

2) Everyone should be networking more.  ALL of my properties have come from networking.  It's one of the top tips I tell aspiring investors that I coach.

@Tzvi Keisar - Not only is it possible to get a DSCR loan, it's what many real estate investors use to finance their deals. Many times it's very difficult to get traditional financing on an investment property. Feel free to message me with any questions. I've built a portfolio closing in on 200 rentals and have a handful of investor friendly lenders I work with.

I started 9 years ago with an art degree, no savings and no real estate experience.  I had just moved my family into our fixer upper dream home and that same day, lost my job.  With my back against the wall, I made the leap into real estate.  I started with wholesaling, then fix & flips and then started keeping some and now I'm closing in on 200 rentals!  I started with a $60K townhouse rehab and now I'm buying $5M commercial properties.

I have 47,000 followers here on BP and I'm here to pay it forward.  What's holding you back from getting started with real estate investing?  What's one big question you have?  Don't feel bad.  I spent YEARS in Analysis Paralysis before getting my 1st investment property.

@Matthew Rice - there's no "one" way.  As an investor, I email brokers about properties they have listed (even if I'm not interested in that exact property) and sometimes it leads to coffee or lunch.  I reach out to people I know and take them out for a drink or coffee and pick their brains about networking.  You'd be surprised at the number of people you know that have people in their network that would be good people for you to know.... and your friends will usually be happy to connect you.  I asked my lawyer if she had anyone I should meet with.  I did the same with my title agent.  I'm trying to think back over the past 7 or 8 years and I think every single deal has been through networking.  Some have even come from people that were several steps removed from the original person I had a connection with.

Worth it.  Get the tax advantages now if you plan on growing your portfolio quickly.  You never know when certain tax savings tools/strategies will disappear in the future.  It's not difficult and your accountant shouldn't charge much to do it.  If your goal is long term rental the recapture is sort of irrelevant.  And you can always do a cash out refi in the future instead of selling... or sell and do a 1031 exchange.... both will avoid/delay the tax man even further.

@Michael Matesky - 1st, you should know that it's not as hard as you think it is.  What are your initial reservations or questions?  A lot of what you need to learn is best done by doing.  You're not alone though.  Many people want to invest but don't know how to get started.  Feel free to start posting specific questions on BP and you can message me.  Happy to help.

I work with lenders that don't require W2s.  I realize the original post is old but to others that may be in a similar boat, feel free to message me and I can connect you.