All Forum Posts by: Timothy Robinson

Looking for creative financing options like wrap around mortgage to solve Seller's anxiety about bank foreclosure being triggered by credit union if she were to sell to myself and they find out by insurance or escrow etc. that a new owner is on title or property has been sold, even if the credit union is receiving payments by myself or original owner on time for example ( unlikely they will start any foreclosure- also in California it takes up to 4 months to foreclose). Owner/ seller is concerned I will not be able to refinance mortgage within 36 months if my name is on the title, and mortgage is in original owner name if we do a wrap around mortgage or seller financing? Respectfully request your experiences and creativity in solving the owner's concern. I developed a rapport and connection with the seller and working legal and financial solutions for our mutual benefit in the purchase of the property. She is a motivated seller ( out of town owner) who does not want to deal with renters, repairs or the property mortgage and other carrying cost. She is receptive to my taking over those payments but her mortgage is not assumable? Is wrap around loan our only option?

Hello, there is a YouTube video where a real estate investor gives a lecture to college students. He talked about how he started investing in the state of Tennessee with no money down getting into buying SFR and then renting out rooms to college students who do not prefer to live in a college dorm. Their parents co-sign and ensure the rent payments . He got his first through seller financing. He talked about applying lease options or rent to purchase contracts with owner or seller ; which then can be assigned or subleased to another tenant or tenant buyer who give a Down payment above your earnest money down payment. Monthly rent payments for a few years . Equity above what you promised to pay . You found a buyer and renter. At closing you payoff the original seller/owner. The new buyer pays you off the balance of the of the equity subtracted from the amount of rent ( preferably amortized). Recommend using the $5000 ( skin in the game) as a down payment on a lease option or rent to buy deal that you analyze will bring a positive cash flow after all cost and expenses to get your first rental home under contract. Highly Recommend going through a title company or real estate lawyer ( preferably one who is experienced with doing these deals or contracts). Start with one deal as a test or learning experience or introduction into real estate law, financing, insurance, taxes, dealing with tenants, management company , and contractors, structuring positive cash flow deals, etc. if all of this is too soon or time consuming; recommend around your college town to check out rentals- ask the owner will they be willing to sell to you under a lease purchase contract if you give them a down payment ( suggest using a RE lawyer or title company). Or if you find a rental , ensure your lease allows you to sublet, or how many people can live in the property or home under the lease. You can rent to room mates or do the air bnb, etc. Another option is to use crowdfunding sources . Not only can you use them to fund your real estate deals; you can fund deals through them. Realtyshares and other real estate crowdfunding companies give you access to real estate investing and cash flow, etc. Third option is to use the $5000 to fund a REIT (Real estate investment trust) where you go through a stock broker or discount broker such E-trade, Schwab, Ameritrade etc. after researching management fees and dividend income payments or payout ( monthly) . You buy 1000 shares of say REIT FHA INC. it pays out 25 cents per share monthly= $250 per month or $3000 gross dividend income per year before taxes are subtracted. More income to add to your future Real estate investing strategies- buy rent and hold, fix and flip, etc. There are other miscellaneous real estate investments such as real estate ETFs, etc. Whatever decision you make- make it an informed decision. Research all above options thoroughly- ask the tough questions . Know the risks and rewards of each. I find investing in real estate to be much like doing a 1000 piece puzzle. What pieces makes the frame or outer border, what pieces makeup the middle etc. until you see the bigger or whole picture . Good luck!

Hello, Congrats on your choosing to take your first steps in becoming a REI. True, some markets like San Diego are expensive. Especially, if you decide to buy in San Diego neighborhoods near high demand or popular areas such as beaches, entertainment, tourism, etc. Highly recommend driving around or checking out deals on Zillow, Redfin, Trulia , Craigslist, rentometer and other apps or sites to find deals from For sale by owners ( FSBO: some are motivated, some Distress), Government ( FHA, HUD, VA, etc.), Banks (Real estate owned: REO, etc.). Read and post value added questions or information to BP , Reddit and other real estate blogs and forums. At your local library, kindle, etc. read as many or all real estate investing books then take or record notes. To not lose money, have a negative cash flow, be underwater in your mortgage (owe more on your mortgage than the property market value ) analyze at least 10 properties cash on cash, ROI (return on investment), Internal rate of return (IRR), capitalization rate (cap rate), rent to value, debt coverage (DCR), Gross rent multiplier (GRM) are some ratios used in property analysis of SFR or MF rental investments. You will need to gather assumptions or facts on property management fees (10% typical average), vacancy rate, down payment or skin in the game (typically 20% for conventional bank mortgages or 25% hard money lenders), purchase costs ( could be more or less than asking price), rehab costs/expenses( estimated costs of repairs in your area on common repairs/ fix up costs to make Rental habitability, security, safety within or above state and local landlord/ tenant laws/codes). Closing or purchase cost for your area ( everything from appraisal, origination fees, real estate broker/agent fees [3% to 6%], title search and insurance, and more). There are many ways to acquire financing or funds/ capital etc. you need: hard money lenders, traditional banks ( investors pay more in interest than owner occupant status home buyers), partners, family and friends, retirement funds ( maybe Roth), private lenders, mortgage brokers, crowd funding, seller financing, savings, rents/ dividends/ interest and other income, etc. I believe in paying yourself first. Every paycheck (earned income) or other income- take minimum of 10% of the top - automatically if you prefer towards savings or money market account or Bank CD, mutual fund, index fund, ETF , Government treasury bond etc. Think about property taxes ( after year one of purchase: prepare for California supplemental property tax) . San Diego and California ( maybe 1.5% of purchase price into your calculations). Of course you will need the right hazard insurance added to your calculations ( hopefully no flood or earthquake; etc.). I used BP property analyzer and a free deal check app to do my preliminary ball park on whether a property will have a positive cash flow. Do not forget to use the above and other sources like tenants, property managers, real estate agents, etc. to get an idea of what maximum rental income the rental will bring in month to month. You tube has a lot of videos on real estate investing and property analysts: google or go to you tube; then type in rental property analysis or single family rental property analyzer or analysis. Good luck!