All Forum Posts by: Jacob St. Martin

Hello Damian, 

I think this is a constant struggle for people outside of the 9-5 world. The reality is that when you leave a 9-5 job your obligation and expectation for the day is done. As an entrepreneur, there is not such a clean off button. 

What I can recommend is that if you are feeling overwhelmed by your total load of responsibility than it may be time for you to start outsourcing. Likely your first step will be hiring a virtual assistant to take care of simple tasks that you might not need to be doing yourself.

Also, if your goal is to become a full time investor, what is stopping you? What steps do you need to take and are you willing to take a short term pay cut to make it happen?

 I am saying that your monthly heloc cost looks way too high if you look at the total amount borrow and your rate your monthly payment should be much lower on the heloc. 

 Unfortunately if you are planning on doing anything with the property other than living in it or having a residential rental a residential loan is not going to work here. You would probably have to lie to the bank to even get a residential loan and then if they caught wind of what you were doing they would probably just call your loan. If you are trying to make it a place of business I would recommend looking into either an SBA loan or a commercial loan, or private lending.

Hey Stephanie, 

If I am being totally honest I think you should hire a property manager. They will take 8-10% but will save you a lot of the headache of navigating these questions from another country. If you are set on self managing though, here are answers to your questions:

- Most of the time in the U.S. it is just first month's rent and security deposit, I believe that this is actually determined by laws that vary from state to state. There are also state laws dictatig the maximum quantity of the security deposit and how it is to be collected and stored.  

- There are certain requirements for the lease that vary from state to state. BP has lease templates for every state which are good, I personally use one from eforms. I always do one year leases and ask my tenant to renew a new one year lease. I don't do month to month but a lot of landlords do.

Feel free to reach out if you have any other questions!

If it is a single unit 2 bed/2 bath you can definitely get a residential loan. Here is most likely what is going on:

The city changed the zoning districts and they upzoned this area from residential to commercial/multifamily because they need higher density housing. The previous owner then saw an  opportunity to sell it for more than it was worth before because a developer can turn it into a much larger asset and make a lot of money. 

In this scenario the property as a residential property is normally a terrible deal because they are basically selling it as commercial land so you might want to look into that. If you are a developer and plan to tear down the house and do something else with the property then you wont be able to get a residential loan because you are going to tear down the bank's collateral and then do something else which is definitely against the rules. 

Hello Gyn, 

Congrats on taking the first steps to buying an RV park! 

1. You definitely want an agent who is located in the area that you want to buy. If you find an absolute rockstar agent they may be able to help you look in other areas but you are going to be better contacting an agent in each area that you are looking. Additionally, you need an agent who specifies in this type of asset. A residential agent is not going to be useful for you here. 

2. A good agent should be able to walk you through the types of lending for this type of asset and who guide you to who they typically work with. It doesn't hurt to do some research on your own though. For this type of property you are going to find that the lending terms aren't going to change a ton from place to place. It is going to be a DSCR loan (debt service coverage ratio). This means that they are going to look at the ratio of the Net Operating Income (NOI, or income - expenses) divided by the monthly debt service (your monthly payment). They want this ration to be 1.1 or higher typically. They will probably only lend 65-70% of the purchase price but this will depend on the lender.

If you have more questions feel free to reach out via a private message!

Hey Michael, congrats on getting started on analyzing deals! Analyzing as many deals as possible is the best way to get practice and move toward your first property. Here are my thoughts:

- Most of your analysis looks really good!

- You missed utilities in your holding costs

- For your first rehab you should plan on a little more than 6 months, just in case

- You might want to double check your tax number as taxes in NY can be pretty high

- The biggest area where mistakes are made for new investors when it comes to flips and BRRRRs are in the ARV and the rehab cost. On the rehab cost build in a margin of at least 10k but ideally more like 20k and verify with a contractor. For the rehab you will want to compile a list of comps and talk to an agent and get their opinion. An error in either of these numbers can put you under water really fast

Feel free to reach out if you want any more help! 

Hello Mast, 

It is great to see some people from outside the U.S. getting involved in BP! I will note that some of the information on here will be different for you especially when it comes to loan products and requirements so that is something to keep in mind. 

When it comes to deal analysis you can go to the tools tab and look at the calculators on the left side. Those are easy to use and can get you started. Often times you might want a more detailed analysis which I typically do in a spread sheet. For this you may want to learn more about the specifics of deal analysis and that is where I would probably recommend books like The Book on Rental Property Investment by Brandon Turner.

For raising capital there may be regulations in the UK that differ from the U.S. so it would probably be best to consult with a real estate attorney. In the U.S. the primary ways that you can raise money are by joint venturing with someone, syndicating, or starting a fund. They each have their own strengths and weaknesses and it will depend on the deal which will be right for you. 

If you would like to talk more in depth I would be happy to help, feel free to reach out to me via private message.  

Hello Cody, this seems like a great opportunity. It will probably not positively cash flow while you are living in it (unless you make some changes that I will get to in a sec) but it would still be a win because you would be paying down a mortgage rather than renting and I imagine your monthly housing cost might end up lower, AND you will now benefit from appreciation. House hacking is an amazing strategy and is how I got my start in real estate. 

Here are a couple strategies to increase the cashflow to maybe cover the whole payment:

1. House hack the main house too. Rent out the other bedrooms to friends or other people

2. Do short term or mid term rentals in the ADUs instead of month to month leases. You will need to furnish them and check with local regulations to see if this is legal but if you can you will make a lot more money this way. 

3. Live in one of the ADUs instead of the main house because the main house will rent for more (and then STR or MTR the main house).

If you want to discuss any of these details feel free to reach out to me in a private message!

Hello David, 

It sounds like you are in a great scenario where you have built a solid portfolio! I think by far the most important question here is what do you want to do/what are your goals?

Is $75,000 enough for you? If yes, does this still leave you room to save for new properties? If no, how much do you need?

Do you want real estate to be a job or do you want it to become more passive while you pursue other things in life? 

If you want it to be a job then what are your greatest skills in real estate and what is it that you enjoy about it? I would probably recommend that you pull some of your capital and use it in active investments that will grow your equity very quickly like flips, BRRRRs, value add multifamily, etc. 

If you don't then you might want to just coast or even convert your equity into even more passive investments like syndications or partnering with investors who want to put in the work but need capital partners (like me!).  

If you want to discuss these things in more detail I would be glad to work through them with you, feel free to message me.