All Forum Posts by: Santiago Montana

@Oleg Enik Kudos to you for your entrepreneurship. I wish I had started thinking about investing when I was your age. The first thing I would recommend to you is to put yourself in the lender’s shoes.

A lender’s primary responsibility is to manage risk. A good lender evaluates a borrower’s risk of defaulting on his/her obligations. If you are seeking to get financing, your primary role is to demonstrate that you have given lots of thoughts to your risk profile, and that you are capable of mitigating the risk of default. In other words, think of the areas where your profile poses a risk to a lender’s assets – and ensure that you are capable of mitigating those risks. Always look at your financial standing and represent yourself truthfully.

As a young investor, your risk profile is obviously most vulnerable in the following areas:

1. You don’t have much experience investing in real estate.
2. You don’t have a long credit history.
3. You don’t have many assets to back you up in case that your real estate investment doesn’t work out.

We were all young once and we all had to start from scratch. If I were you, I would focus on strengthening your position and credibility by creating a portfolio that demonstrates the following:

• Show that you are credit-worthy. Build your credit score responsibly. It takes a while to build a good credit sore, so be patient. (I’ve found that great investors are very patient.)
• Show that you have studied the market: Make a business plan that shows your target property’s income statement. If you are planning to rent the property, show the property’s potential revenue, expenses, taxes, etc.
• Show that you have analyzed your financial health. Calculate your Liquidity Ratios / Leverage Ratios / Coverage Ratios / Profitability Ratios. There are great books on real estate finance. Here are some ratios that are useful for real estate financing

• Net income return on investment
• Cash return on investment
• Total return on investment
• Net operating income
• Debt service coverage ratio
• Turnover ratio
• Operating ratio
• Break-even ratio

• Show that you have professional experience: create a resume to show that you have profited from your education. Show your accomplishments; if you’ve gotten academic distinctions, if you’ve done internships, or if you have worked or volunteered and gained professional experience, be sure to add these skills to your bio.
• Show that you have enough liquidity / assets / income to afford a real estate investment. The goal here is a) to demonstrate a history of income, and b) to demonstrate that you have assets (financial or physical), which may back your investment. If you don’t have enough capital, keep saving, strengthen your income and work on sharpening all the other bullets above.

If you are 20 years old and your risk profile isn’t great, your job today might be to build capital earn trust and build relationships with professionals that may want to do business with you in the future. it is always good to plant the seeds network with professionals in advance. If you think that you’ve analyzed your finances thoroughly, pick the phone and call lenders. Tell them who you are, ask questions and let the lenders ask questions. You might get rejected and your credit score might show that you are seeking to borrow capital – but you might also gain experience or advice for the future.

Good luck,

Hi everybody! I’m new to real estate investments and I’m keen to learn the trade a bit better. I like the idea of long-term investments in residential properties. I also like the idea of flipping houses, but I have no experience and little time.

I used to work in web marketing and for the last 6 years I’ve been working in finance.If there is anyone seeking websites / marketing materials / financial plans, let me know! I’d be interested in trading my skills in order to learn the real estate trade a bit better.

I’m interested in investing near my residence, but the prices are very high. I’m contemplating Fort Lauderdale because I have an acquaintance that does real estate investing there.

Nice to meet you all!