All Forum Posts by: Stephen Morales

Hello,

I am looking to build relationships with good wholesalers for fix and flips and BRRRR, especially in the St. Louis, MO area. Any recommendations would be appreciated. Who have you had good experiences with? Thanks.

Good morning, 

Recently decided im going to seriously invest in real estate. Have done 1 flip in the past, so my experience is minimal. Look forward to meeting, learning and growing with the community, as well as helping out wherever i can. I am extremely handy and can fix almost anything that has to do with real estate so if you have any questions or need advice on cheap and good ways to fix something on your properties feel free to reach out!

My background. I spent 14 years in the Army and currently manage businesses in Michigan. Looking forward to working with the community!

I think I am looking for validation of my understanding of the status quo. My intended market is central-south NJ, which is pretty competitive and can be high dollar real estate. 

I've been looking on Zillow/Redfin and came to the conclusion that any of the listings there are "too late". Seems like too many middlemen are on the deal by the time it hits the MLS. Like stock pickers on CNBC - too late. While I've found some deals that appear do-able, the numbers never make sense. Often times I even see destroyed homes (perfect for a flip) that sell almost as much as remodeled homes. Impossible to find any sort of margin. Best case, maybe 1-2% CoC.

As I learn, I am coming to the conclusion that all the good flip deals are done through private sales. I signed up for PropStream and learned about skip tracing. Slowly starting to realize that this how it all happens. Like all these properties I see only where people sell a property for $700k which was purchased for $300k just 6 months prior. Text/call/email 1,000 property owners and hope to find one that will give in and take cash to just exit no questions asked. That this is really knocking on doors and selling type of business. 

Is that the real game here? Am I seeing things clearly? Is there room for a person like me who likes building and working in spreadsheets? 

if you think wholesaling is an easy business and that it'll make you thousand's and thousand's every month your mistaken my word to every brave entrepreneur get ready because it's not gonna be an easy game at all don't let these wholesaling guru's 

make you think other than that before learning anything about wholesaling real estate learn how to find those really distressed homeowner's because that's what you need to think about if i was you i'd go straight to the source COUNTY RECORD'S and good luck to any brave entrepreneur out there 

reach out if you need any help when is come's to lead generation and wholesaling!

Hello Bigger Pockets Friends,

My name is Micah Glenn, and I am thrilled to be a part of this vibrant community! I am eager to connect with real estate professionals who specialize in wholesaling. I am very enthusiastic about learning and am looking for guidance and mentorship on how to dive into my first deal successfully.

I believe that learning from experienced individuals like yourselves is invaluable, and I am keen to absorb as much knowledge as possible to kickstart my journey in the real estate world.

Thank you for welcoming me into this community, and I look forward to connecting with you all!

Warm regards,

Micah Glenn

I just found myself in a strange situation and maybe a wonderful opportunity. I am 22 and I have zero experience in owning rental property. I have been saving up money to finally make my first move into real estate, but the thing holding me back at this point is 2 years of w-2 in order to get an FHA loan. I have 20k saved on my own over the course of my life, mostly through random short jobs and never spending money.

Tonight I went to a local real estate meetup and met cool people, talked about a few different things, but when I got home I told my Grandma about how I want to be a landlord, and do a House hack. I told her about how since most of my income until the past few months has been saved through my life with no w-2, I can't start my dreams for another couple years through FHA means. Suddenly she didn't hesitate to say she would loan me 100k, or anything for that matter. I asked what rate and she just threw out 5%, with a balloon on the end for the full loan, but really she said "whatever would make it a great deal for you" (I don't want to just take advantage either, but a good deal is a good deal. She said she doesn't care to make lots of money anyway and its just sitting there.)

I thought It would be sweet to do a BRRRR on a 100k property and pay the 5% a month plus the balloon back in full in that two year window, but I was like there's no way I can even find a 1 bed 1 bath HOUSE for 100k in my area, and looking on Zillow/realtor I was right. They are only mobile homes on rented land, and I don't think I want to get into all of that mess, especially with a BRRRR and as my first deal. It scares me.

Anyways, my main questions are based upon a hypothetical. I believe I can find some pretty nice multifamily units in my area for 350-500k. Is it possible for me to do something like take a 20-30k loan (at 5% interest) from my grandma combined with my own 20k in savings (40-50k total) to use for an FHA down payment, closing costs, and needed repairs plus have cash in reserves? How would a bank (or wherever I get an FHA loan from) react to this? Remember I still don't have 2 years of w-2 but does having her cover the costs make a difference?

For extra details: Her loan would probably end up being a 5% interest rate for 2 or 3 years and a 20-30k balloon at the end of the 2 or 3 years. She really is letting me set the terms if I do this, and if I take a 30k or even 20k loan from her it could potentially only add 100-180$ to my monthly costs each month for running the property. I could easily work my w-2 jobs over a couple years and save that 20-30k to pay the balloon back. My savings rate is about $2200-2500 a month, and I also think with a solid deal on something from a tri to a five plex, maybe I could get decent cashflow to help me even more prepare for that balloon, heck even pay the balloon a year early if the terms allowed it in our contract.

Please respond with any additional questions if you need them to help answer mine. I hope this made sense to read. My apologies for any confusion.

Quote from @Matt Menard:

Hi Ethan,

If you are interested in investing, I have a great team who is currently raising money for a 452 door complex. You do not want to be a landlord and need to look bigger. This would be a great first step to getting you there. Reach out if you have any questions. 

Matt be very cautious of post like this.. you dont want to start out in some massive syndication with people hitting you up on the internet.. Just sayin.. 

I think you can have your grandmother lend you down payment for a house hack FHA there in ID  go with that to start.. get some experience handling one tenant and a place to live by far your best way to start you have decades to work at this.

@Drew Mullin I know the owner, Nick; he's a solid guy. I would say that cold calling, in general, has been in decline over the last year. If you can have him do text blasts for you then I would go that route. You might not get much traction with his cold calling services. His service is for beginners to get you started, so the goal is to use his service to gain momentum and then potentially build out your own cold calling or texting team.

Thanks for the info Stephen! @Stephen Morales

Evan, talking to my ledner, he said for a situation like this, I would need to use a commercial loan. Is that the type of financing you used as well? @Evan Alterman

Hey Cliff, ARV is tricky because there are no comps in the area that can be used. So from what I understand, you calculate the ARV for each house based on comps for a single house with similar square footage, beds, and bath. Then and add the two together as a max value. My lender was telling me that due to the difficulties with financing properties like these (can't use a conventional loan for this according to him), properties like this usually sell at a discount. I think it would be wise to have an extra buffer, so if you usually buy at 70% ARV, maybe buy something like this at 60% or so. So that should be considered when calculating the ARV for the whole property because some people just won't buy with a commercial loan. @Cliff Benner

Does anyone else have a better method for calculating ARV?