All Forum Posts by: Cynthia Hartley

@Chris Eaker. BP is a forum for guidance, not one where people seek to be chastised. An experienced investor may have considered this from the beginning. However, since I am still learning as I go, it is not a question I thought to ask until now. I can pay for the reno on my own, but I want to consider my other options as well. Thanks for your input.

Hi BP members.

I just purchased a SF investment property in DC. My plan is to completely gut the house and have everything new - electrical, mechanical, etc. Will a hard money lender finance for rehab only? I know they typically lend for a 6 month period, so I plan to pay for all the drawings and permits myself since those can take a lot of time. Then once I have the required permits, I would like to use hard money to finance the rest of the renovation.

Welcome @Account Closed. Glad you decided to join.

I would recommend that you take out a HELOC on the condo rather than refi. HELOC fees are less costly and the money can be tapped into again and again as it gets paid down. Besides, you only pay on the amount of the HELOC you use. If you have a HELOC for $200K, but only use $100K, you only make payments for the $100K.

Reserve a portion of the HELOC to put 20% down on your new residence so as to avoid PMI. If you have any credit card debt, use the HELOC to consolidate your credit card debt (don't acquire any more debt), which will increase your credit score and reduce the interest rate on your new home.

Then, if you have additional money from the HELOC, you could acquire another property.

@Clay CondolI think it is good that you trusted your gut. I had a similar story in which the seller kept skirting answers to basic questions. A investor I knew had called me because he knew that I was interested in buying a property in B'more. He was asking $30K and said it had a tenant who was paying $700/month. He said he wanted to sell because he and his wife just had a baby and driving to B'more was a hassle. When I asked him how long he had owned the property he would not say. When I asked how long the tenant had been living in the property he said that he did not know. He could not even tell me the address of the property at first. Over several phone calls, I kept asking the question and would get different and vague answers. The long and short of it is this guy was not forthcoming with critical information. If someone is not honest and straightforward, walk away. 

@Peter Rowell @Joel Barron. I would not give up on Albany so quickly. I would invest in Albany if it weren't so far from DC. A duplex in the high $100s is not bad. My sister, @Missy H., invests in Albany and is doing well. Feel free to reach out to her. I am sure she will be able to provide some insight. 

Hi @Kenny Kagawa, 

Being on BP is a great first step. There are scores of resources here from which you can learn. Just look under the education tab. Also, listen to the BP podcasts. I listen to them when I am driving to work, at the gym, working in the garden. I listen to them at 1.5X speed on my iPhone so that I can listen to more in less time. I've listened to almost all of the podcasts twice and when I'm done, I will start over and listen to them a 3rd time. I am always learning something new, even if I've heard the episode before. 

Also, figure out what type of property you are interested in? I just bought a SFH in DC and plan to convert the basement to an accessory apartment. There are few, if any, multifamily units in DC. On the other hand, my sister just bought a duplex since Albany has a ton of those. It's easy to get distracted when you try to look at everything.

Keep in mind that just because you live in Murrieta, doesn't mean you have to invest in Murrieta. Look in areas that are within a two hour drive from your house. I live in DC and invest in DC and Baltimore. My sister lives in Bloomfield, NJ and invests in Albany. On our respective drives, we listen to BP podcasts :-).  

Based on my own experience, a key factor is patience. Take time to learn your market. Look on various realtor websites such as Redfin, Zip, Realtor.com, etc. to see what prices are like for the type of property you like in different areas you like. Use the various BP calculators to analyze the properties. You should soon get a sense of what a financially sound investment looks like. Then, when you find a property, you can pull the trigger with confidence. 

Those are just some basic thoughts. There is certainly a lot more that goes into investing such as financing, finding a RE agent (preferably one who is an investor and works with other investors), etc.

Good luck. 

@Elizabeth Blauwiekel @Sam Valme I have a really great contractor that I like. I have used him for years. I always think his prices are high until I get other estimates that are always higher. More importantly, he is always on time, his work is outstanding, and he is just around a great guy. I almost hesitate to give his name, because I am preparing to use him on a rehab, but he has done right by me so many times, it is only fair that I share him. I can't post his contact info outside the Marketplace, so message me and I will give you his contact info.

@Jason Cash As a first step, I would recommend that you find a real estate agent that has experience working with investors and has a few investment properties her/himself. Have them send you listings based on criteria that interests you - SFH, duplexes, small multiplexes, etc. Start looking at those properties to see what condition they are in at a certain price point. Don't forget to run the numbers on the relevant BP calculators. This will give you a good idea of where the market is for a particular type of property in an area in which you are interested. Then when you find a good deal, you will recognize it and act accordingly.

With regard to your credit score, glad to know you are working to fix that. One thing that I did that really helped me A LOT was to consolidate my cc bill under a HELOC. My score shot up over 100 points. Moreover, the interest on the HELOC is tax deductible.

If you don't own your own home, you may want to consider making that purchase your first investment. There are tons of tax benefits to be had as a home owner and it beats the heck out of paying rent. 

Hi @Jason Cash. I would have to agree with @Marcia Maynard. Focus on improving your credit. With poor credit your chances of getting access to cash is limited and the interest you will pay, if you were to get a loan, would be very high. I learned this the hard way. Fortunately, my credit is now stellar.

That said, the answer as to how one should invest in real estate really depends on their individual interest and situation. Ask yourself what is your end goal and figure out what you need to do to get there. I have no experience wholesaling. However, it could be a viable option for you as a means of generating income to pay down your debt and increasing your FICO score. Additionally, wholesaling is great way to become adept at evaluating good deals so that when you are ready to invest in your own property, evaluating a deal will be second nature for you.

Some people wholesale and that is all they do. Some start wholesaling and move into flipping or buy and hold. Others, like me, jump right into buy and hold while others jump into flipping. Figure out what you want to do and ask yourself is it feasible to do it at this point in time. If it is not feasible, ask yourself what action can you take that is feasible and start from there. Good luck!