All Forum Posts by: Eric B.

Look in rural areas well away from i5 in the sound.  I'm doing more like 1% but I like my nieche. :)

  Take a map and draw a two hour drive circle from your place and start working the edges in towards the center.  You will find plenty.  It anit sexy but the 2% play is all about cash flow.

If the above fails there is always detroit...

Time to change your approach!

Hi Chris!

A big south King and Pierce County welcome.  I'm also interested in getting involved in the south end.  I could throw a rock and hit Bellevue but certain times of day I could drive to Olympia and back faster.  Let me know what you find and I would love to crash the party!

Eric

Hi Brian,

Welcome!

1.  Multifamily units are in style right now.. time to adapt your strategy.

2.  Much of the massive list of disclosures are government mandated forms that they are required to send you.  The massive list of info that they need from you is also apart of the "conforming"  mortgage market as Fannie Mae and Freddie Mac require that info to purchase the loan on the open market (which don't forget is why mortgage rates are so low).   Now those two are so huge in the market that even many of the portfolio lenders that do not sell their loans to those guys follow along in a broad attempt to meet their own underwriting standards.

All that is to say....If you want their money then  you have to play by their rules! as annoying and stupid as they seem.

Alternates are money partners, hard money, finding investors, and there are some online crowd funding options.  MY opinion is that most of these will cost you for the convenience of not going through traditional mortgage underwriting.

Personally, I bite the bullet, have found a mortgage broker that I don't mind working with, and look at it as input cost for me to boost my returns.

I'm sure other people will have all kinds of other creative financing ideas.

Good luck!

Eric

Welcome!  I'm in your area frequently.  I would love to unlock the secret to renting to off base personell.  There are alot of opportunities in lalewood and alot to learn about screening the right tenants.  Readup and listen to the podcasts but most of all set a deadline and pull the trigger.  The best way to learn is by doing.  Plenty of people here that can help if you have a problem or a question.

Good luck!

Hi Dell!  

Thanks for the response.  Well the awnser to question one is infinity but that is obviously not very usefull. I'm sure there is some way to put a dollar value on the risk of all financing and then use that.  But again not helpful.  I guess I did not provide enough information....But having never done a flip I'm not really sure how to parse my question.

I'm trying to take an orbital view on this and ask myself the question: what is the best use of my money?

Comparing economic value of flipping to my longer term strategy is where my 25% annual return number comes from.  Now with what I am doing I dont run a 25% return in the first year and I am happy to beat 10% profit with closing fixup carry cost ect in my first year.  However in the out years, the return looks more like 25% before apprication.  I'm happy to ignore this as the hastle and risk in flipping and hardwork in the way i would do it  have to be accounted for.

So let me throw out a hypothetical:

Purchase price 150,000

Downpayment 30,000

Closing 5,000

Fixup cost 30,000

Sale price 250,000

Carry cost 10,000

Sales tax and associated fees.  20,0000

Time to flip 12 months (just to make it easy)

Capital into property total 75,000

Profit 35,000

Return on investment (35k/75k) =46%

This is an example that I passed on this year but might consider next year.  This is half of the return that I would like to see. But quite a bit above the 25% that my money could do in my current strategy.  Thoughts?

Socially ran into the managing broker at one of the local realestate office.  He thought beating a 25% cash on cash return that we are gettibg in buy and hold with flipping locally would be hard to do.  That suprised me.   I know all markets are local and everyones approach is different.  I would do alot of work on a flip myself but my carry cost would also be greater.  I just wouldn't be much interested in a flip if I couldn't doubble my money.  What do you think?

Do you want it enough to sell the car?  That car loan is dumb at your financial level.  It aint sexy but that's how people build wealth.  Some of the poorest neighborhoods have some of the nicest cars while some of richer neighborhoods have some of the oldest crappiest cars you will ever see.  Time to change your thinking.  Read 'stop acting rich'. The first chapter is free as a sample on kindle app and it summarizes the whole book its all you need.  Change your thinking and you will look up in 10 years with a different life.  Good luck!

As always a bunch of valid on point posts. Consider my case, I have the skills and capital at this time to do a rehab, but not the time or team (and I don't have a full time job!) Next year my youngest starts full time school so we plan on doing a rehab and hold or flip at that time.  Be very careful of "turn key" all houses have issues and will need upkeep attention.  Keep a maintence long and get on some kind of maintence check and expectected repairs schedule just like for a car.  I purchased a turnkey light house off of mls this year and ended up doing a bunch more time and work into it than I had planned so be careful especially if you are new to rehabing.  Good Luck!

Salem is a nice stable market with attractive price to rents in the core but houses are older.  I may do one as a trial, we spend a fair amount of time in salem.... The guys have had a fair number of investors on the blog that invest in the Vancouver/Longview areas. I do all my buy and hold investing 45 minutes to an hour drive  away from my home.  Its not too far and i dont have a daily commute so it doesnt bother me at all.  And i drive that far to mow lawns (yard guys are stupid expensive in seattle area).  If you take the annual cash flow and divide by the time you spend traveling to units it makes it feel better.  That being said if the market is telling you to flip or do something else do it!  Dont do buy and hold just cuz somebody told you too or because you see people doing that here.  As my econ prof said "The supply and demand lines don't lie"