OfflineHello,
It's nice to be back on DG chatting with all of you again. Today's topic is Financing Buy and Hold properties for beginners. This post is meant to help me in what I am trying to do Right Now, but hopefully it can become a resource for those in a similar position in the future.
For many, Buying and Holding is the Holy Grail of Real Estate Investing. My questions are based on what is possible for those who haven't had any exposure to the process and have financial hurdles to overcome, but want to begin B&H-ing sooner rather than later. The goal is not to correct these financial problems (Yet!) but instead how to work around them.
Since this is my forum topic I'll focus on my own interests: 2-4 unit multi family homes in North NJ. Homes that will be acquired through private sellers and Banks as REO properties. The goal is passive Monthly Income.
"My Position" is similar to a lot of the people coming to DG.com in recent months. I'm a younger person, I have No credit, no money, and I'm unemployed. I'm between a rock and a hard place. But knowing others in the same position have done it before me, tells me that it Can Be Done. And I'm willing to bet someone on here knows how.
Granted I can only think of three ways to finance a the deal, get a bank to finance their own REO, use private $ to buy then a local bank no seasoning refi, or owner finance if applicable.
With that in mind my questions are as follows:
1. Will these techniques work for me given my situation?
2. What other strategies are there that could work?
3. If so, what kind of hoops will I have to jump through to use them or to refi a property?
4. If I form an LLC and buy property in it's name, will "they" still look at me personally, or will they just look at the business taking my personal finances out of the equation?
5. When looking at REOs without an agent of your own, and the bank not having one of their own, how do you tour the property and gather all the info needed to make a sound decision?
I'm sure a lot of other beginners are wondering the same thing and looking forward to hearing what the community will come up with.
Thank you very much,
MattNJ
If only I could remember I put a post up on the forums.
These are Five questions you MUST have answers for before each deal you are planning to buy and hold.
1. How will I finance the property?
2. Am I prepared to hold for an extended period?
3. How will I manage the property?
4. Do I have 6 months of cash reserves for each property to cover vacancies and maintenance?
5. What is the property actually worth and how much up front repair and maintenance costs is there?
Michael Mangham
M D Home Acquisitions LLC
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
Thank you Mike, I always appreciate your input.I'm trying to answer Number One with this forum post.
If only I could remember I put a post up on the forums.
Take my idea for what it's worth (I'm a newbie), but perhaps you can find someone who just wants out, and all you have to do is take over their payments. I think there's a way to do that with or without the bank knowing-Don't take my word for it. Of course, it probably won't be the particular property you're looking at right now, but it may be an option.
I would imagine that a FSBO would probably be easier to lock up and take over. Totalviewrealestate.com has some videos that can give you ideas. Greg Murphy with his lease option may be a good route for you to look into. Instead of making money in the front by passing it to someone else, just make a little in middle, build some credit and go from there. Greg goes into this well in Gain the Edge 10, but has some info. on total view.
Let me know if you'd like me to delve deeper into this.
Good luck
Check this thread for a fourth approach...the equity partner
http://www.deangraziosi.com/real-estate-forums/everything-else/90475/cas...
Thank you very much for trying to help. I'm grateful for every reply. You never know where your next epiphany will come from.
If I could find someone who has enough equity and would be willing to let me do that instead of just selling the property outright, without having to rehab a lot, then by all means that is a very viable option and I would jump on it, although the likelihood of Me personally finding such a smokin deal is not great, but I would try it none the less if I found it. So good idea, it's just the stars would have to align just right for me to pull this one off.
I've talked to home owners that fit the Lease option bill but that adds a whole new layer of complexity that I just don't feel ready for. Lease options are great, but a more advanced technique from what I've been taught.
If only I could remember I put a post up on the forums.
Wow ok, I like this very much, thank you. These are the kinds of things I would like to learn. I may just be sending you a pm with a proposal in it.
How many deals can be done like this?
If only I could remember I put a post up on the forums.
09/15/11
A short while back there was a [highlight about the Illinois couple that bought a home for $750,000. I've been trying to find out about this couple and review their article/video. They were sitting with Dean in his office? I think their names were something like Lupkinsi??? Not sure
Any one out there that can help me find this source?
Help
I think you're talking about Joe and Stacey Jurek. Joe's username is "IndianaJoe".
If only I could remember I put a post up on the forums.