Hey all as the topic shows Im new to REI and I was searching around for info and reading several books when this site caught my eye. Im sure as hell it did too because this place seems amazing.
Well here's my story. I've currently been a Loan Officer in Minnesota for almost a year now, so Im somewhat familier with how some stuff works, but there is no end to gaining knowledge, and thats what Im here for.
About 3 months ago I purchased my own home (Im currently 22) and trust me it was not from massive amounts of money I've been recieving at work. What I did was I bought my boss' house at under market price because he wanted to get rid of it. Then I had one of my appraisers get me a nice appraisal of the property and was able to get a nice lump sum of money from a home equity loan to pay my monthly mortgage payments :D But currently a friend and I have decided to invest in different properties. Im not that kind of guy that wants to get rich overnight or anything, but a well layed out plan is always nice. Currently we're negotiating on a deal which would give us about $600-800 a month in positive cashflow for a fourplex. Thats after expenses and even property management fee's. I talked to a few somewhat experienced investors and they said the deal was pretty much a no brainer. The neighborhood definately isnt the greatest, but with the property management company dealing with things I think I should be fine, shouldnt I? So please any advice or anything I need to look for before sealing the deal would be appreciated. I'm also a pretty big fan of Robert Kiyosaki and I've been focusing on his books more than anyone elses so far.
Thanks Everyone! 8)
Nothing wrong with getting rich slow. My first mistake as a landlord was thinking that the tenants would appreciated lice stuff and take care of the property. I installed grass cloth wallpaper in the living room and nice paper in the kit and bath too and a ceiling fan in the bedrooms too. After i had to evict them I went in and wa totally depressed that all the paper was ruined and the fans were all hanging fro mthe wires and a trailer of trash left behind for me to haul off. Being a landlord is not for the weak hearted. Do not lease to friends either.
Having a property manager helps but cuts into the budget. I have always heard to make your money going in by buying right, below market about 20% and less if possible. This will help your ability to suffer thru vacancies. It is not near as easy as a lot of books and tapes say it is. I have lost a fortune twice and am bouncing back a third time and am still thrilled about REI. Watch and see how far I bounce back this time. The only field I know where the sky is the limit and I am shooting past the moon this time.
Thanks for the reply Ted.
Being a Loan Officer has helped me realize many things that may have taken me months or even years to learn otherwise. Fortunately I can do my own loans and my best friend is a realtor so I can get kick back on the realtor commissions too. I’ve been reading quite a few books and we all know nothing is more educational than experience. You being one of the most experienced here probably has alot to say when it comes to investing which I actually would love to hear. When I look on MLS and see a 2.65 million dollar 30 unit apartment investment that gives you a positive cashflow of $210,000 yearly after all expenses, I just drool. Because we all know that to purchase commercial property you need at least 20% or at best case scenario 10% down. Coming up with that initial money is the tough part. So please if you Ted or anyone else has any experience or any idea’s for me that I can follow up on would be great. Like I mentioned earlier, I’ve been reading through mostly Rich Dad books.
Edit: Another question I had was that since I’m looking into buying multiple investment properties with my friend, what the best legal and business route is. I mean do I create an LLC and if so what benefits does it have tax-wise and security-wise.
Feel free to comment or give an opinion everyone.
Hey good deal with the house from the boss a nice job benefit!!
I would work on establishing your lines of credit through a bank or other lending institution and make sure your credit is good to go…you being a lender know about that…
The consensus is create a LLC for long term hold and do a C-Corp for quick flipping your properties…
I personally believe in the power of land trusts and am working on a deal where I am doing a equity/credit share on a property but am assisting an investor put the property in a land trust by brokering to the guy who will do it and learn from the whole process while protecting myself and the other investors at the same time win/win/win…
I know of a international investors club which is endorsed by Dolf De Roos where they invest worldwide in commericial type projects and is open to member of the club only… It costs like 5 grand to join but who know if you can buy shares of a property you may make some good money… Iam thinking about it hey Ted does it sound like a legit deal I think it is but if I get the contract in writing that members can buy shares of their condo conversion projects then it may be legal and binding… Any thoughts to member on this type of deal sorry to digress on this post.
I am not familar with Dolf De Ross or any international club. There would have to be a whole lot of benefits for me to write a $5000 check to join any club. I would do some serious investigating. Maybe some other members here have some input.