I just leave my current job, which I worked for 12 years and a place made me very frustrated. Unfortunatelly that is also my only job since I immigrated to US. As a computer technician without much knowledge on business and real estate investmement I did hesitate if I could become an full time investor. My wife is a strong beliver though. She suggests me post a message in this forum to get some help.
My current financial situation is:
I rent a home after I sold my mortgage piad off condo last year.
I have several huandred thousand current asset.
I have credit score around 750.
I live in Massachusetts.
My questions are:
Does traditional mortgage company still want to lend me money for investment while I’m out of job and no any business record at all?
What kind of business entity (LLC or business permit ) has to be formed before I can start the deals?
Is it leagal to use my rental home as company’s mailing address?
Where can I find useful information of Mortgage company and accountant in Massachusetts.
It sounds to me like you “jumped the gun” a little early. How do you plan to invest in real estate without much knowledge in that area? I think you’ll find it easier to get financing if you have an income. Lenders want to know you can pay the loan if things wrong. I suggest you find a job that you like for now. Then invest some time studying real estate investing before you invest (and likely lose) a large amount of money. There are plenty of good books. Here are some that are very helpful.
“The Millionare Real Estate Investor” by Gary Keller.
“1 Minute to Rental Property Riches” by Michael Rossi (Propertmanager).
" The ABC’s of Real Estate Investing" by Ken McKelroy.
You’ll find these books your local bookstore. Good luck.
Why don’t you sign up for a course to become a Real Estate agent? Go visit your local Realtors to find out how to do this in your area.
You have great computer skills and are bilingual in English and Chinese so you will have ready-made customers for your skills when you become licensed. You will learn everything about real estate in your area by becoming a licensed agent. You have enough cash to live on while you change careers.
Once you start earning commissions from selling, you will need a track record of income in order to qualify for a mortgage. Then you will have the knowledge and the new career and you can begin investing in homes.
Good luck to you! You will find that when you study and work at something you like work will seem like play. Life is too short to have a job you hate.
I think you have what it takes to be a big success.
Thank you for all the input and encouragement. I currently live in Newton, Massachusetts. BLL,where can I find the local groups you mentioned for seeking more help?
To enter into the real estate market and decide to become an investor is not an overnight decision for us. I work in the same company for 12 years. I helped build and expand a small computer LAN, developed software system to streamline business process, and did maintenances. I worked six days a week and very often 7 days a week. Unfortunately when system getting stable they let me feel I’m useless and start assign me other unrelated and ridiculous jobs. While hard working is not a problem for me, an aimless and no progress life did hurt me a lot–
Leaving the job is sooner or later. We figured out we want to succeed in RE investing. We attended seminars, read books and bought some Guru’s courses. Our goal is to buy as many as apartment/multi-family houses as we can and hold for rental income. But the progress is way too slow – I was tied down to this job. It’s impossible for me to go out, talk to people, and do a deal. That is why even there are some risks and sacrifice out there, I have to leave it now.
If finding a job is the only choice for financing for income property. I will do it. But before I jump into it, I need to find out if there are more options/creaive way in financing support. And, some questions to be
clarified by you the expereinced investors:
For today’s market, the lenders/banks will not give out the loan simply based on the income property that can generate positive cash flow? Or, even it can be acquired below 65-70% ARV? No matter you have reserve in your bank account? or credit score?
How about seeking hard money first and then refinance from conventional bank?
I think you should continue to work full time until you’ve acquired enough properties ( and rental income) to pay for everything your job pays for. That includes health insurance. Then you can think about quitting your job. I think you’ll need the job in order get the financing for the properties. Perhaps you can find a job you like for now. You may have a hard time refinancing out of a hard money loan without regular (stated) income. You may find a selle willing to do an owner finance or a lease option. As far as the Guru seminars, don’t spend large amounts of money for them. You can get the same type of advice from books, this website, and other successful investors in your area. Good luck.
That is a tough area. Home prices are very expensive, but it sounds like you have the cash for a downpayment. Luckily, the tenant pool is a higher class who doesn’t know how to work the system like low income tenants do. Just make sure you know the laws before you rent to your first tenant. There are no accommodations made for inexperience. You are held to the same standard as large property managers and given the same penalties for violations. Some of which can put a newbie out of business. If you are totally green, you are at least 1 year way from learning the information you need to know to avoid problems. The safest option is to buy a duplex and live in one half. You are exempt from most of the punitive rental laws as long as you don’t own any other rental property.
There is a landlord convention in Las Vegas hosted by MrLandord.com that you may find very helpful. The real value is speaking with local LLs after the seminars, not in the guru material. Some of them are from your area.
There are three LL associations close to you. The Boston Landlord Association with a focus of East Boston, Chelsea, Winthrop and Revere, which are all lower income areas with a different tenant pool than Newton. The state association chapter, Boston Renal Property Owners Association, is inactive and looking for officers. The only support they offer at this time is the monthly newsletter and access to the web site. SPOA is based in Cambridge and very active politically.
There are two RIEAs near you. The Boston Area REIA pushes too many seminars and products for my taste. I don’t know why they call it Boston area. They meet in Waltham and the officers and advisers are from NH and CT. Few of the member are active in Boston. A little north is the Mass REAI. Most members invest in the North Shore from Lynn to Haverill and parts of southern NH. Like other REIAs, the focus is real estate investing outside of the rental business.
It will be tough without a job and a record of stable income. The only full time investors I know getting mortgages now are the ones who have been full time for at least 10 years. If you are going to get a job, do it now. There are rumors of massive layoffs coming in the financial sector. I tend to believe them because tech professionals in the financial sector are jumping ship before the ax falls. Another option is to start your own IT practice and focus on small business. Most don’t have an IT staff.
Based on your posts, I would go with a limited partnership and transfer the bulk of your non-RE assets out of your estate.
No, unless you store your business records there.
Your local REIA is the best place to find people who work with investors.
Thank you for all your time and those great informations and advices. That helps me a lots. One thing that’s for sure: I will keep on learning, educating and networking in RE world–where is the ultimate goal. For now, have a full time job, and be a part-time investor first.
Speaking of job, does anyone have any good suggestions that come to your mind when you talk about a job that is highly RE investment related, besides the realtors/brokers? The jobs that will still keep you staying in the area of RE— you are working and still learning. (p.s. any opinions about Property Locators?)
Build a list of private money lenders for your financing. Don’t worry about traditional forms right now. My partner and I have private lenders from $25,000-$10mil for residential and small commercial. Great source of financing.
Business entity - Personally I would do an S-corp for wholesales and short sales. S-Corp is a great money funneling strategy and you avoid S.E. tax. With regards to holding property I would do an LLC, LP, FLP, SMLLC…of course this depends on what type of company and structure you are doing and with whom you are investing.
I would not recommend using your rental home.
I would seek out very qualified accountants. Those who know how to work in real estate investments to maximize your profits, minimize your loss. Depreciation, deductions and all the great perks of being an investor.
Hi, here is an article that will show you how to make money in real estate with just what you have now. You are ahead of most new investors in that you have a stash of cash. You have obviously began your education in real estate, so that you will appreciate this information. The conventional wisdom of having a job, getting a bank mortgage (why do you have to get a new one? There are plenty of people in this market that would Pay you to take theirs!) etc.
I helped build and expand a small computer LAN, developed software system to streamline business process, and did maintenances. I worked six days a week and very often 7 days a week
.
Hard work, persistence, and a strong drive to succeed are 90% of being successful! The rest is learning/understanding the business and having the discipline to do things right.
I would strongly suggest that you get another full time job (or do consulting in the IT business) to generate steady income. You will need to work VERY HARD for a few years as you work and build your real estate business. As your real estate business grows, you can taper off your work (or consulting) until your real estate business will support you. I would also strongly suggest that you protect the cash that you have now.
Finally, you need to do whatever it takes to meet and make friends with the SUCCESSFUL real estate investors in your area. Your local REIA will be a great start.
ChengHuang,
For a job that is investing-related, there is working with a bank or mortgage company making investment loans. You will learn everything about loans. Your IT experience should be very valuable to a commercial lender.