All Forum Posts by: Thomas Lee Malpass

Certainly, it's not uncommon to feel stuck in analysis paralysis, especially when starting out in real estate investing. Here are some tips to help you move forward:

1. Start Small: You don't need to jump into purchasing an entire property as your first investment. You might consider starting with something smaller, like a REIT (Real Estate Investment Trust), crowdfunding platforms, or even fractional ownerships. These options allow you to invest with significantly less capital than buying an entire property.
2. House Hacking: House hacking involves buying a small multi-unit property, like a duplex or a house with a basement apartment, and living in one unit while renting out the other(s). The income from the rent can help cover your mortgage and even provide extra cash flow.
3. Partner Up: If you lack the necessary funds, consider finding a partner who can invest with you. This can be a friend, family member, or another investor who has the capital but lacks your expertise in the real estate market.
4. Seller Financing: In some cases, the seller of a property may be willing to finance your purchase. This would involve you making payments directly to the seller over time, rather than obtaining a traditional mortgage. ***MY PERSONAL FAVORITE***
5. Lease Options: A lease option allows you to lease a property with an option to buy it in the future. This can give you time to save up money, or wait for a more favorable real estate market.
6. Wholesaling: Wholesaling involves finding a distressed property, putting it under contract, and then selling that contract to another investor for a fee. You don't actually need to purchase the property yourself, so it requires little upfront capital.
7. Educate Yourself: Keep educating yourself about real estate investing, and try to build a network of mentors and colleagues who can provide advice and potentially collaborate with you on deals.
8. Build a Good Credit Score: If you haven’t already, start working on improving your credit score. A good score will make it easier to get a loan when you're ready to invest.
9. Saving & Budgeting: Even with little to no money, developing a saving and budgeting habit is crucial. This discipline can help you accumulate enough for your initial investments and create a safety net for any unforeseen issues.

Remember, each of these strategies requires careful consideration, and there are always risks involved with investing, so you must do your due diligence. Don't be afraid to seek advice from experienced investors and professionals in the field. They can provide insights into the current market situation in Austin and help guide your investing decisions. Good luck & happy investing!

Quote from @Thomas Lee Malpass:

I need some help calculating a potential Subject-to deal. Here is the info I have so far... Sellers Loan Amount $500,000 They are currently asking $799,000 as the purchase price. 

The property is a multifamily Quadplex currently fully rented at $4200 total with some leases ending soon and rents increasing to $4800 if fully leased out. 

I am still doing due diligence on the PiTi loan payment, but the property was bought in 2020, so I assume they have a decent interest rate.  My question is what else do I need to know to calculate this deal? And if I get it under contract how could i make this deal work out? THank you so much for whoever helps me on this. 

I'm not quite clear on what you mean. A Subject To means you are taking over the existing debt. That's all. Pretty simple. But, you say they want $799,000 which is $299,000 over the existing debt. So, are they doing a carryback of $299,000 ? If so, at what rate and terms? Are they dropping the price to $500,000? That would be great, but it isn't likely. Are they allowing a Wrap? Do they need the full $299,000 at closing? Are they doing seller finance? I'm just not sure, based on what you've said so far, what you are proposing to them and what they are willing to accept.

Also, since it's a multi, you want to have the roof, heating, cooling, plumbing, electrical and sewer all inspected along with each bathroom and kitchen and the foundation.

And you want to get a trailing 12 rent roll and a copy of all lease and rental agreements and have language to deal with renter's deposits, among a few things to do.