I just took about $25k and used it for a down payment, closing costs, and slight rehab on a duplex that I am living in. I used a conventional loan and just rented the other unit out for $900. My mortgage is $995 and I’m hoping to save some money and buy another home sometime in the fall.
I used $20,000 to do my first house hack back in august, I’ve already saved up another $15,000 for the next property where I’ll mostly buy out of town where homes are significantly cheaper
Perfect timing. I rented out my condo based on knowledge from your books and podcast as I started digital nomading. I saved $30k this year and plan to buy another property when I return to the US this December. Then back to travel until ready for the next property. Love this video and all your content.
If i had 30k. I would seller financing, purchase pre-foreclose houses. Then lease option them to a new buyer. I love the idea of saving others from foreclosure. You can help so many people this way.
I love you Brandon! You are the best Real Estate mentor I have had. You give great advice and you have our best interest in mind. I appreciate everything you do! AGAIN, thank you for doing what you do!
This is literally me right now. There is no good rentals in the town I live in so I was thinking about taking out an FHA Construction loan to fund the cost of the land and construction of a fourplex. Not sure how much the bank will lend me but I know in new Hampshire I think the max for this type of loan is 640k. It's so confusing though. I think I need to talk to a realtor to find the land, take out a contract on that land so it is reserved long enough for me to get land consultant to help me determine what are my options with that land, then take it to the permit tech, then going to a civil engineer, then going to an architect , then going to a construction lender with the blue prints to get the FHA Construction Loan, then get a general contractor to work with the architect to get the project done correctly, then I move in, rent out the other 3 for a year and then go to a refinance lender to do it all over again. i think anyway
Hey Brandon. PLEASE!!!! Do separate lengthy videos on these two separate subjects: FHO Loan Video & 203K Loan Videos. It could help a lot!!! We need these. Thanks.
I plan to buy my first property in the summer of 2019 (I'll be 20 years old). My goal is to save as much as I can by then (hopefully around $30k) and put a 20% down payment on a house at or around $100k. Although I like your idea of BRRR and the FHA loan. Time to build some credit.
joshua grasser here’s how it worked out: it didn’t at all. This dude was only 20 years old at the time and actually thought a house was only $100k 😂 that’s a dream world, i would own tons of property’s if that was the case.
Henry Cruz ok where at? I’d love ACTUALLY look at the details. Your the biggest fucking lier out there. Bought it for how much?? Did you even need a downpayment?? What area? What do you do for a living? I’d honestly be stunned if you answered everything honestly and hooked me up with your Realtor
About the refinance...1. How do you get houses to appraise so high after cosmetic or slightly more invasive than cosmetic upgrades? 2. With that said how do you get the bank to agree to refinance/cash back 100% of the owed amount? 3. Lastly, how is the property still cash flowing after you refinance for such a high amount. It seems like that extra 30k you are taking out will totally or nearly soak up your entire monthly upside.
Great video! Something I am currently debating to do with my 30k is to go directly to the owner who only wants to do a cash only buy, offer them the 30k up front. If there is much left over, Ill ask them to carry the note till the last remainder is paid off.
For sure would get a duplex/tri. Rent 1-2sides out while living in one. Take all positive cash and throw it back in to the property. "Appliances, Floors, landscape." Refinance or pull equity loan, and get another duplex/tri. Eventually sell them as a package deal, throw that cash into a 50+ apartment complex. Woot! =D Victory!
Hey Brandon, you often mention as part of the things you might do in some situations like in this video and in others that you might try to partner with someone.Everyone knows someone who has extra dough, but what everyone may not know is how to speak to the person with the extra money for the purpose of getting them to go into a deal with you, especially if you are new at the game. So, how would you or what are some good pitches or techniques you have used or have heard others using that helps them to begin the conversation with a friend or a family member who may be interested in investing with you as a partner?
That's because this dude bought his 24 unit rental property directly from someone in his CHURCH. Most people will never get a deal like that. He totally lucked out.
I agree. Brandon maybe start role playing the situation and this would really help increase the newbie in learning the process. I am very excited to get started and saving as we speak but no where near 30k more like 3K LOL. A role play to help increase my plan would be greatly appreciated. Your channel is excellent but if you put in to show then newbie exactly how to work this out or to properly speak to investors it would be a great learning experience. Thanks again for what all you do. Brian
I'm starting out with about $100k in cash and another $40k in credit cards that I can use for the rehab. I'm planning to move to Tucson at the end of next month and start pounding on the BRRRR strategy to build up my rental empire. If I buy in the right places, my properties should about double in value in the next 4 years (sans a full market crash). That's my plan!
@TriCk Yep, that's the plan. Except I have a buddy that will do the majority of the rehab since I'm still working a full-time job. I'll put as much of my time into it as I can, but it'll cost me a lot less having him help me out and paying him than to hire a contractor. And I trust him more. I figure when I lose this job (either by them noticing my apathy for the company or me finally singing "take this job and shove it" as I skip out the door) then I can start working on the houses full time. But my primary job is going to be acquiring them.
@TriCk _"So, if you’re not lying about having $100k in cash."_ -- This is kind of hilarious. Why would I "lie" about such a thing? I happened to have bought my house 5 years ago in Portland OR for $200k (I was smart enough to buy a short sale that needed some work), spent about $50k fixing it up over the last couple of years and a realtor just did a walk-through and told me she could list it for $450k. I happened to have bought at right about the bottom of the market and right now it's the top of the market. Washinton County is a really hot market right now. As soon as I sell, I'll pay off all my debt and still have about $100k left over, along with about $40k in credit card availability. Why would that be hard to believe? Seriously, if you know nothing about market cycles, you should look into it.
Hello Brandon. How did you get the $100k loan from the bank? They'd have needed a collateral in the form of your property but they'd have done due diligence on you to see if you can repay it. You'd likely have had to get a chartered surveyor for a credible valuation and even then, you'd be covered for $50k by the extra equity in your home but not quite for the remainder which would be covered by your other income streams. Banks are however pernickety and want to know why you want to borrow. How did you motivate your loan request to the bank?
In my market, a SFR selling for $30k would sell for $80k if it were modified to be a duplex, because the people elect to assign the value of a duplex based upon potential max rent, unlike banks at 5+ units commercial. Thus, the best payoff is in turning SFRs to duplexes.
You should check with your bank about putting a HELOC on that rental property for as much of the $150,000 as you can. That way, when you pay off the house, you can go back to the well and access the cash for future projects and you don't have to pay interest on money you don't use.
Great video! Over the past 3 yrs, I've been able to save 30k so that I can invest In the real state. I've been leaving in P.A.for about a year now and will be looking to purchase a multi-unit property to house hack, come springtime of 2019. Thanks for the advice
@@zackfair5408 After Repair Value, or the value of the property after you put work into it (paint, new flooring, maybe even big ticket items like roof, etc.)
The numbers from BP are just mind blowing from where I am. I spent ~2 years looking on my first and at least a year on my 2nd with help from family looking and both were a wreck for ~100k. I remember a house from 1920-1930 for 50k 3 years ago needed all new HVAC, trash to look at, and under a damn bridge. WTF kind of house do you get in these areas for 100k with a 20k investment and value at 150k??? I can't imagine Utah being such a drastic change from even the deep south apart from a totally wrecked economy...
The real estate industry is one of the most 'who you know is more important than what you know' based industries out there. Deals like he's talking about are possible, but require casting a very wide net, advertising the fact that you buy houses to everyone you ever meet constantly, sending out millions of letters asking to buy random people's houses, placing illegal signs everywhere, etc until enough people respond that you actually find a deal. If you're trying to hit up the MLS/Craigslist/FacebookMarketplace/etc to find a deal, you'll have to be EXTREMELY lucky to find a deal like he's talking about as all the high-dollar investors are looking there as well and can offer the seller more money than you can and can offer it as a cash deal with no financing, with a much quicker close AND probably have a close friendship with all the local real estate agents and as such probably got a chance to buy the property before it even got listed on the MLS.
I am looking to begin investing in real estate with a small amount like 30k off my profits from my forex and crypto investments, it has been a hella ride this year raking in profits and trading close to 100 BTC this year on coinbase
was with the help of a lady Helen sims Duerr she is a professional trader and regulated in the U S she has been my financial manager for a year now. I started with 50k euros and grew my portfolio gradually, I am forever grateful to this lady
If you didn't get this answered yet: this comes a lot down to choice. Most (not all) investors will advise you to hold your rental properties under your LLC or other business entity. In that scenario you tell the banks you have an business entity you want to carry it under. If your business entity doesn't have tax / income history, they will likely ask you to personally guarantee the loan which will then bring your personal finances into play. If you hold the property in your personal name, then obviously it's all personal information at that point.
So, in your example you need to come up with $70k to $100k cash to buy that property first; right? It’s not the 20% down anymore because you are not taking it to the bank after you purchase; rehab and rent it out?
if you live within 30 miles of Portland, Oregon houses will START at $250,000. and that's for a 800 square foot one that was built in the 1930's or 1920's and nothing special. never buy a property unless you are putting 20% down to avoid mortgage insurance, also If you buy a house, make sure your payments for example if it is $1,200 a month, that you can rent it out for $1,500 a month. To cover yourself for vacancy or repairs. God bless
Sorry, but that response doesn't really mean anything though I'm sure some investors think it sounds clever. The fact of the matter is low cost houses like that are in low income/high crime areas with constant issues, they are not filled with high income college educated professionals. If they were they would cost much more...I know because my own properties that were sub 300K were nothing but constant trailer trash tenants, and it makes sense, that's what low end properties relative to the area attract.
If i think its a fine neighborhood, and you think its a warzone, then you shouldnt invest in it and you should leave it for people like me who are comfortable with it. Honestly, some people think any low income neighborhood is a warzone, and in that case, stay out of that price range. Now, just because you didnt like your experience, points more to you and your skills - I have 2000+ investors in my sub30k mastermind group killing it EVERY DAY. And, there are people who are going to watch this video, and they should know an alternative exist with that hard earned $30,000 - and that finally we are started to teach people how to be successful in it, not just write off neighborhoods and price range for investments.
after reading the comments im like com on guys, with 30k, you cant expect much. 30k just gets you started, which means you wont make any profit at all, the point is to learn. you will be learning the process, building relationships with lenders and networking etc. once you've got some time in, and a little more cash now you can move up to the 6 figure properties.
How long do you have to wait to refinance? What about the seasoning period... sure you wouldn’t have to wait 6months to a year before that was possible?
Ironically enough I have $29,000 right now and I’m going to buy $180k property for 140 and rent it out for 1500 a month. I’ll have that 40 K in equity when I refinance
I'm new to REI and when going to the internet for research it seems like I find a lot of things that seem to possibly be "scams." I don't feel that way about your videos. It's refreshing! Thank you for the content! Any other resources you could recommend? Particularly, how to tell if my local market is a good value? I live in Syracuse NY.
Syracuse is a great place to invest. I know several people who held portfolios of 100+ units and did very well on the exit. They have an over abundance of property management teams over there. Pair up with someone at a REI meeting and see who they use and trust for some pointers on who is good in the area for management. You can make some really decent money up there per month.
I actually have $30,000 in real estate. How can I use that to put a down payment on an investment property? And this is my first property so I don't have rental property history.
Wouldn’t you have $44,000 to play with in the end? $70,000 loan to buy the property with a 20% down payment ($14,000) leaving just $56,000 to pay on the loan? Meaning when you take out a bank loan of $100,000 to pay the $70,000 loan ($54,000 left) that should leave you $44,000 not just $30,000?
Brandon PLEASE help me with Private lending. Who can I trust and how do I do research to find Private lenders. By the way I love your podcast!! Keep them coming.
Hey Jeff! Have you heard of our most recent publishing "Finding & Funding Great Deals" by Anson Young?! Check it out! - www.biggerpockets.com/store/finding-and-funding-ultimate Also, check out this article on finding private money: www.biggerpockets.com/renewsblog/2014/08/15/everyone-knows-people-money-invest/
Great video! I have not started real estate investing. I have a job and a couple of other simple investments that allows me to do my taxes myself easily. My question is how do I transition from that smoothly into a more complex tax preparation and filing including real estate transactions. I am not financially savvy and keeping track of accounts and taxes scares me keeping me from starting in real estate investing.
HEY BRANDON I LIVE IN NEW YORK AND I KNOW THAT EVERYTHING HERE IS EXPENSIVE BUT WHAT ABOUT IF I HAVE MY OWN HOME IMPROVEMENT CONSTRUCTION COMPANY I KNOW HOW FIX PRETTY MUCH EVERYTHING IN THE HOUSE, SOO... WHAT IS YOUR ADVICE IN HOW INVEST 30, 40 OR 50 THOUSAND DOLLARS WITH AN EXCELLENT CREDIT AND OWN A GENERAL CONSTRUCTION COMPANY, IN INVESTING IN REAL ESTATE? WHERE SHOULD I GO AND WHAT SHOULD I DO? PLEASE LET ME KNOW THANK YOU SOOOOOOOOOO MUCH.....
Im selling a lot in a HOA. What do I do when the buyer moves on-site and stops paying ? Once I have sent the proper notice how do I proceed with removing them, ? Lot is in Texas.and remains in my name until lot is paid in full.
If you refinance aren’t you just taking out a new mortgage on the property for its current value and then walking away with the difference. And by doing that wouldn’t your mortgage go up?
Brandon, i like the BRRR strategy, and I want to protect myself from lawsuits, slip and falls. I'll have to put my properties in a LLC, do i transfer the deed of my property before i refiance or after I refinance?
Awesome and great information, but if you get an FHA loan you must live in the property right? And I guess I you get a hard money lender you have to have the rent amount to be greater than the interest rate plus expenses
I got $30K to buy a two bedroom house that needs full renovation but they are selling the house for $95K the house needs around $45K to do the remodeling, I put an offer of $60K cash and they are not to disappointed about my offer,this will be my first investment on real estate, I want the house for rent and once the house is remodeled can worth around $145K .Any body has an advice on my investment??
Thank you for your education there's a trick but you don't have very good explanation . How you purchased a house for $100,000 and renovate it with few thousand dollar then it suddenly become a $150,000 value property in your bank appraisal
How do you determine the details with the private lender? For example if they let you borrow the $70k to buy the property at what percentage do you pay that money back?
Yes it was a good video, my problem is that I have additional income check beside my reg pay check. I have an mortgage as my only debt. Im trying to get into investment property (Duplex, Triplex and Quads) but i don't have a good or big downpayment any ideas? I don't mind starting small either....i prefer 30-80k properties.
I love and respect you guys for the awesome job you are doing to educate us but why you keep on making it seems so easy to refinance? First there are conditions that you must meet, such as your income level, your credit rating and also your debt level. You dont just say u have a property for $150,000 and the bank the bank tell you they can give you $100k. It does not work like that otherwise many more of us would be doing it. In Most cases they may give you 75% of the value of the property provided that you have good income and and good credit. Please be sure to cover these because you will come of as not being authentic on the subject. Thank u.
Stephen Williams Please keep in mind that this is about what Brandon would do with 30k. So for him refinancing would be easy. This is not a full walkthrough of every worst case scenario for someone else although he does address various scenarios. Otherwise the video would be too long and the point would be lost.
Awesome video. This is almost exactly my sitch. I'm pretty new (first deal still to come), at RE investing. Need to find a partner and a mentir and a ...! Thanks for all illumination B-turn.
Hi Brandon Thank you.... I have been watching and dialing in to the content to learn the ropes around re investing. It looks like your from the Seattle area..'''' very cool.. maybe well end up linking up through a deal someday.. Ill be watching and checking in. thanks. this model is what im planning to do in the foreseeable future. Seattle market may require a larger down amt?.. 60k? would that be a better amount for acquisition around east side of Seattle like Renton Kent ?? where would you say i should be looking?? I live in Juanita Kirkland area. If your familiar with area. thanks and i will continue to tune in!!. Cheers Ryan
hmmm...notice he didn't mention he would do wholesailing? I've thought about doing that investment type, but I feel unsteady about that type of investing. Seems like there is a lot of gurus out there selling information products on wholesailing. That fact, makes me weary about doing wholesailing. If anyone successfully does wholesailing as a business...please chime in.
Question: In the deal you outlined, what benefits the hard money lender giving you $70k and in a few months getting that exact amount back? Was there no interest?
What does the investor gain by putting in 70k just to get his 70k back? (Because you said you are only refinancing 100k) and apparently you own the property? (B/c you’re collecting rents)?
Jacob Farnsworth You are basically getting a cash flowing rental property in essence with no money down,. That’s the end game of a BRRRR project so you can rinse and repeat. This way, you can buy several houses per year as opposed to the traditional route of putting your $30k down, then taking years to save enough for another 20% down payment and getting property #2.
How's it going!? So, I am just starting to do research on real estate investing... I have quite a special situation with my work... and I don't even live in the US right now because of it... so, anyway I plan to spend the next year doing heavy research into this topic and I would love to know what you think about where I should start to build a good foundation of knowledge. I watched the interview with your mentor as well... I have a mentor so it sorta caught my eye.. anyway thanks for the great video!
+Steven Blancher Hey Steven, BiggerPockets.com is the worlds leader in real estate investing knowledge and information. Hop on the site, listen to our Podcast (#1 Podcast on iTunes for REI), read our blogs, connect with users, and SO much more.
The key is that that $100k is earmarked primarily to pay off the other loan. He most likely never sees that full $100k, the majority of it is paid directly by the lender to the previous lender with the balance being paid to him.
Branden, your example of BRRR and asking bank for 100k would be more than most banks LTV on investment property, right? Banks typically do up to 75% of the value, unless I missed something??
I know you can get a house at a heavily discounted price if paying cash in full and buying something a bank wouldn't give a mortgage on....but your suggesting to buy with an fha loan and hold a mortgage. How are you finding properties like this with so much meat on the bone?
This might be a dumb question but With cash out refinance do you only pay for the cash that was taken out or do you pay for what the property is worth?
lets say u cant find a private lender. u go to the bank with 20k they give u 80 u buy a house for 100k. if the price goes up u ask for another 100k loan with the equity. but how much will the bank actually lend u i mean like will they give u enought for 5 houses in a year?
Am I to understand that he has $100k in equity in his appraised home of $150k? So he basically bought the house ($70k) with "cash" provided from his private lender, then put in $30k of his own? Is that how he is leveraging his home to get the $100k loan from the bank? If that's the case, the biggest obstacle seems to be acquiring the right home, at the right price and rehabbing it to make it worth more...everything else should fall into place
just one thing: rental properties don't really appreciate - they're the most valuable when they are fresh & new. After that, the value starts to decline, and after a while YOU have to work at making it valuable again by refreshing it. Appreciation means that the value goes up all by itself without doing anything, like an original Van Gogh, or a mint condition Corvette.
Well you're partly right. The property does appreciate in value but a lot of that appreciation value is spent in upkeep and maintenance of the property. For example I buy a $200,000 house and now it's worth $230,000 3 years later but I spent $20,000 in year 3 on some needed renovations and improvements. However I was able to raise the rent by $300 a month because the house is much nicer than it was before the maintenance and improvements were made.
anyone can answer this... I Live and work in NY and for the future of my family I would like to invest in another state. My question is which state????????
If you house hacking you can rent it out while you're living there. Which can cover your mortgage and 4 plexs can easily cashflow with you living for free.
is it smart to buy property in another state? i am in california - cant afford a mail box with $30k - let alone a house...maybe buy in iowa or other places...how do i keep track of repairs contractors, etc?
I just took about $25k and used it for a down payment, closing costs, and slight rehab on a duplex that I am living in. I used a conventional loan and just rented the other unit out for $900. My mortgage is $995 and I’m hoping to save some money and buy another home sometime in the fall.
Joe Schmo in which city is your location, and how good was your credit ?
good!!!!
That's how you handle business ✊🏾
Your mortgage is 990 and you're taking in 995? Negative cash flow isn't good
@knowledge is power building equity with negative cash flow?
I used $20,000 to do my first house hack back in august, I’ve already saved up another $15,000 for the next property where I’ll mostly buy out of town where homes are significantly cheaper
how’s that going?
My wife and I just bought a 2,200 sq.ft. Duplex for $30,000. Will be renting the 3 bedroom for $800 and the 1 bedroom side for $600. Super excited!
Jake Rogers which city?
How is it going?
Where?
wow what location is that? PA
How’d that go?
Perfect timing. I rented out my condo based on knowledge from your books and podcast as I started digital nomading. I saved $30k this year and plan to buy another property when I return to the US this December. Then back to travel until ready for the next property. Love this video and all your content.
If i had 30k.
I would seller financing, purchase pre-foreclose houses. Then lease option them to a new buyer.
I love the idea of saving others from foreclosure. You can help so many people this way.
I love you Brandon! You are the best Real Estate mentor I have had. You give great advice and you have our best interest in mind. I appreciate everything you do! AGAIN, thank you for doing what you do!
This is literally me right now. There is no good rentals in the town I live in so I was thinking about taking out an FHA Construction loan to fund the cost of the land and construction of a fourplex. Not sure how much the bank will lend me but I know in new Hampshire I think the max for this type of loan is 640k. It's so confusing though. I think I need to talk to a realtor to find the land, take out a contract on that land so it is reserved long enough for me to get land consultant to help me determine what are my options with that land, then take it to the permit tech, then going to a civil engineer, then going to an architect , then going to a construction lender with the blue prints to get the FHA Construction Loan, then get a general contractor to work with the architect to get the project done correctly, then I move in, rent out the other 3 for a year and then go to a refinance lender to do it all over again. i think anyway
Hey Brandon. PLEASE!!!! Do separate lengthy videos on these two separate subjects: FHO Loan Video & 203K Loan Videos. It could help a lot!!! We need these. Thanks.
I plan to buy my first property in the summer of 2019 (I'll be 20 years old). My goal is to save as much as I can by then (hopefully around $30k) and put a 20% down payment on a house at or around $100k. Although I like your idea of BRRR and the FHA loan. Time to build some credit.
I have the same goal as you! Goodluck man!
How'd that work out
joshua grasser here’s how it worked out: it didn’t at all. This dude was only 20 years old at the time and actually thought a house was only $100k 😂 that’s a dream world, i would own tons of property’s if that was the case.
@@tylergable2445 I bought my first house last year at 21 for a $155k so it is possible. You sound like a hater
Henry Cruz ok where at? I’d love ACTUALLY look at the details. Your the biggest fucking lier out there. Bought it for how much?? Did you even need a downpayment?? What area? What do you do for a living? I’d honestly be stunned if you answered everything honestly and hooked me up with your Realtor
About the refinance...1. How do you get houses to appraise so high after cosmetic or slightly more invasive than cosmetic upgrades? 2. With that said how do you get the bank to agree to refinance/cash back 100% of the owed amount? 3. Lastly, how is the property still cash flowing after you refinance for such a high amount. It seems like that extra 30k you are taking out will totally or nearly soak up your entire monthly upside.
Great video!
Something I am currently debating to do with my 30k is to go directly to the owner who only wants to do a cash only buy, offer them the 30k up front. If there is much left over, Ill ask them to carry the note till the last remainder is paid off.
For sure would get a duplex/tri. Rent 1-2sides out while living in one. Take all positive cash and throw it back in to the property. "Appliances, Floors, landscape." Refinance or pull equity loan, and get another duplex/tri. Eventually sell them as a package deal, throw that cash into a 50+ apartment complex. Woot! =D Victory!
Hey Brandon, you often mention as part of the things you might do in some situations like in this video and in others that you might try to partner with someone.Everyone knows someone who has extra dough, but what everyone may not know is how to speak to the person with the extra money for the purpose of getting them to go into a deal with you, especially if you are new at the game. So, how would you or what are some good pitches or techniques you have used or have heard others using that helps them to begin the conversation with a friend or a family member who may be interested in investing with you as a partner?
That's because this dude bought his 24 unit rental property directly from someone in his CHURCH. Most people will never get a deal like that. He totally lucked out.
@@DerekMcDow we call that a blessing in the church world lol :)
I agree. Brandon maybe start role playing the situation and this would really help increase the newbie in learning the process. I am very excited to get started and saving as we speak but no where near 30k more like 3K LOL. A role play to help increase my plan would be greatly appreciated. Your channel is excellent but if you put in to show then newbie exactly how to work this out or to properly speak to investors it would be a great learning experience. Thanks again for what all you do. Brian
That's why we all should go church now and then! Depending on your church...church folk have money! @@justinjames7801
Fi d a good deal. Let the numbers talk
You may have just changed my life. Great Content Great Video
Let us know how it goes brother
How’s that life changing coming along?
Lenders just aren't loving the refinance piece or require a long seasoning period. Haven't asked around in a while so will do.
What makes you say that banks don't like refinancing realestate? Keen to know your view..
I'm starting out with about $100k in cash and another $40k in credit cards that I can use for the rehab. I'm planning to move to Tucson at the end of next month and start pounding on the BRRRR strategy to build up my rental empire. If I buy in the right places, my properties should about double in value in the next 4 years (sans a full market crash). That's my plan!
@TriCk Yep, that's the plan. Except I have a buddy that will do the majority of the rehab since I'm still working a full-time job. I'll put as much of my time into it as I can, but it'll cost me a lot less having him help me out and paying him than to hire a contractor. And I trust him more. I figure when I lose this job (either by them noticing my apathy for the company or me finally singing "take this job and shove it" as I skip out the door) then I can start working on the houses full time. But my primary job is going to be acquiring them.
@TriCk _"So, if you’re not lying about having $100k in cash."_ -- This is kind of hilarious. Why would I "lie" about such a thing? I happened to have bought my house 5 years ago in Portland OR for $200k (I was smart enough to buy a short sale that needed some work), spent about $50k fixing it up over the last couple of years and a realtor just did a walk-through and told me she could list it for $450k. I happened to have bought at right about the bottom of the market and right now it's the top of the market. Washinton County is a really hot market right now. As soon as I sell, I'll pay off all my debt and still have about $100k left over, along with about $40k in credit card availability. Why would that be hard to believe? Seriously, if you know nothing about market cycles, you should look into it.
Hello Brandon. How did you get the $100k loan from the bank? They'd have needed a collateral in the form of your property but they'd have done due diligence on you to see if you can repay it. You'd likely have had to get a chartered surveyor for a credible valuation and even then, you'd be covered for $50k by the extra equity in your home but not quite for the remainder which would be covered by your other income streams. Banks are however pernickety and want to know why you want to borrow. How did you motivate your loan request to the bank?
Greatest UA-cam Channel ever created 🙏🏾 blessing in disguise!
In my market, a SFR selling for $30k would sell for $80k if it were modified to be a duplex, because the people elect to assign the value of a duplex based upon potential max rent, unlike banks at 5+ units commercial. Thus, the best payoff is in turning SFRs to duplexes.
I've got a little under 30k and this was so informative and helpful! Thank you!!
You should check with your bank about putting a HELOC on that rental property for as much of the $150,000 as you can. That way, when you pay off the house, you can go back to the well and access the cash for future projects and you don't have to pay interest on money you don't use.
Kevbox2008 normally can do HELOCS on primary residences only
Kevbox2008 it's a great tool though
Great video! Over the past 3 yrs, I've been able to save 30k so that I can invest In the real state. I've been leaving in P.A.for about a year now and will be looking to purchase a multi-unit property to house hack, come springtime of 2019. Thanks for the advice
o yes !!! good idea!
In pa also. Where you at?
I live outside of Philadelphia and fairly new to investing. I have been in real estate as a realtor for the last 15 years too
How'd that go
In Florida, when you do a refi, you must wait 6 months to get the full ARV or you will refi on the original purchase price
what is ARV?
@@zackfair5408 After Repair Value, or the value of the property after you put work into it (paint, new flooring, maybe even big ticket items like roof, etc.)
@@kchachalove thanks.
@@zackfair5408 Happy to help!
The numbers from BP are just mind blowing from where I am. I spent ~2 years looking on my first and at least a year on my 2nd with help from family looking and both were a wreck for ~100k. I remember a house from 1920-1930 for 50k 3 years ago needed all new HVAC, trash to look at, and under a damn bridge. WTF kind of house do you get in these areas for 100k with a 20k investment and value at 150k??? I can't imagine Utah being such a drastic change from even the deep south apart from a totally wrecked economy...
The real estate industry is one of the most 'who you know is more important than what you know' based industries out there. Deals like he's talking about are possible, but require casting a very wide net, advertising the fact that you buy houses to everyone you ever meet constantly, sending out millions of letters asking to buy random people's houses, placing illegal signs everywhere, etc until enough people respond that you actually find a deal. If you're trying to hit up the MLS/Craigslist/FacebookMarketplace/etc to find a deal, you'll have to be EXTREMELY lucky to find a deal like he's talking about as all the high-dollar investors are looking there as well and can offer the seller more money than you can and can offer it as a cash deal with no financing, with a much quicker close AND probably have a close friendship with all the local real estate agents and as such probably got a chance to buy the property before it even got listed on the MLS.
Awesome video, this is exactly my situation right now. Thanks!!!!
This is GOLD. Great advice! Plenty of options here that will be within very shortly.
I am looking to begin investing in real estate with a small amount like 30k off my profits from my forex and crypto investments, it has been a hella ride this year raking in profits and trading close to 100 BTC this year on coinbase
could simply ask google it converts to more than 700k euros do the math in your currency
was with the help of a lady Helen sims Duerr she is a professional trader and regulated in the U S she has been my financial manager for a year now. I started with 50k euros and grew my portfolio gradually, I am forever grateful to this lady
you can reach her at her website and leave her a message helensimsduerr. me or email her directly (hello @ helensimsduerr. me) she will reply
its okay, just email her and mention Gunther im sure she will quickly attend to you. she is so professional and transparent
LOL FAKE AS COMMENT
Are you asking for the loan using your name, credit and income as leverage or via your business name/LLC?
If you didn't get this answered yet: this comes a lot down to choice. Most (not all) investors will advise you to hold your rental properties under your LLC or other business entity. In that scenario you tell the banks you have an business entity you want to carry it under. If your business entity doesn't have tax / income history, they will likely ask you to personally guarantee the loan which will then bring your personal finances into play. If you hold the property in your personal name, then obviously it's all personal information at that point.
So, in your example you need to come up with $70k to $100k cash to buy that property first; right? It’s not the 20% down anymore because you are not taking it to the bank after you purchase; rehab and rent it out?
if you live within 30 miles of Portland, Oregon houses will START at $250,000. and that's for a 800 square foot one that was built in the 1930's or 1920's and nothing special. never buy a property unless you are putting 20% down to avoid mortgage insurance, also If you buy a house, make sure your payments for example if it is $1,200 a month, that you can rent it out for $1,500 a month. To cover yourself for vacancy or repairs.
God bless
nice advice!!
Or...purchase a sub30k rental property in the right market/neighborhood and get $800 -$1140 in cash flow....Just saying.
AffordableREI your so smart at this
Aren't those usually in war zones?
For some investors, yes, for other investors, far from it.
Sorry, but that response doesn't really mean anything though I'm sure some investors think it sounds clever. The fact of the matter is low cost houses like that are in low income/high crime areas with constant issues, they are not filled with high income college educated professionals. If they were they would cost much more...I know because my own properties that were sub 300K were nothing but constant trailer trash tenants, and it makes sense, that's what low end properties relative to the area attract.
If i think its a fine neighborhood, and you think its a warzone, then you shouldnt invest in it and you should leave it for people like me who are comfortable with it. Honestly, some people think any low income neighborhood is a warzone, and in that case, stay out of that price range. Now, just because you didnt like your experience, points more to you and your skills - I have 2000+ investors in my sub30k mastermind group killing it EVERY DAY. And, there are people who are going to watch this video, and they should know an alternative exist with that hard earned $30,000 - and that finally we are started to teach people how to be successful in it, not just write off neighborhoods and price range for investments.
after reading the comments im like com on guys, with 30k, you cant expect much. 30k just gets you started, which means you wont make any profit at all, the point is to learn. you will be learning the process, building relationships with lenders and networking etc. once you've got some time in, and a little more cash now you can move up to the 6 figure properties.
How long do you have to wait to refinance? What about the seasoning period... sure you wouldn’t have to wait 6months to a year before that was possible?
Ironically enough I have $29,000 right now and I’m going to buy $180k property for 140 and rent it out for 1500 a month. I’ll have that 40 K in equity when I refinance
Hey Tyler what area are you purchasing in?
Thank you
I'm new to REI and when going to the internet for research it seems like I find a lot of things that seem to possibly be "scams." I don't feel that way about your videos. It's refreshing! Thank you for the content! Any other resources you could recommend? Particularly, how to tell if my local market is a good value? I live in Syracuse NY.
Check out Clayton Morris too. Very knowledgeable
Syracuse is a great place to invest. I know several people who held portfolios of 100+ units and did very well on the exit. They have an over abundance of property management teams over there. Pair up with someone at a REI meeting and see who they use and trust for some pointers on who is good in the area for management. You can make some really decent money up there per month.
@@trizzle4442 uh i'm guessing you haven't heard some recent things about morris invest
What about the yearly Tax on property? Where do u fiq..that in on rental? Thank you
This was a informative video Brandon.
#4 for a beginner - Great content - subscribed.
I actually have $30,000 in real estate. How can I use that to put a down payment on an investment property? And this is my first property so I don't have rental property history.
Wouldn’t you have $44,000 to play with in the end? $70,000 loan to buy the property with a 20% down payment ($14,000) leaving just $56,000 to pay on the loan? Meaning when you take out a bank loan of $100,000 to pay the $70,000 loan ($54,000 left) that should leave you $44,000 not just $30,000?
Buy it, Rehab it, Rent it, Refinance it, Repeat. Noted.
Brandon PLEASE help me with Private lending. Who can I trust and how do I do research to find Private lenders. By the way I love your podcast!! Keep them coming.
Hey Jeff! Have you heard of our most recent publishing "Finding & Funding Great Deals" by Anson Young?! Check it out! - www.biggerpockets.com/store/finding-and-funding-ultimate
Also, check out this article on finding private money: www.biggerpockets.com/renewsblog/2014/08/15/everyone-knows-people-money-invest/
Great video! I have not started real estate investing. I have a job and a couple of other simple investments that allows me to do my taxes myself easily. My question is how do I transition from that smoothly into a more complex tax preparation and filing including real estate transactions. I am not financially savvy and keeping track of accounts and taxes scares me keeping me from starting in real estate investing.
Problem is that even though you have 30k down no lender will lend unless you have an income to support the loan.
HEY BRANDON I LIVE IN NEW YORK AND I KNOW THAT EVERYTHING HERE IS EXPENSIVE BUT WHAT ABOUT IF I HAVE MY OWN HOME IMPROVEMENT CONSTRUCTION COMPANY I KNOW HOW FIX PRETTY MUCH EVERYTHING IN THE HOUSE, SOO... WHAT IS YOUR ADVICE IN HOW INVEST 30, 40 OR 50 THOUSAND DOLLARS WITH AN EXCELLENT CREDIT AND OWN A GENERAL CONSTRUCTION COMPANY, IN INVESTING IN REAL ESTATE? WHERE SHOULD I GO AND WHAT SHOULD I DO? PLEASE LET ME KNOW THANK YOU SOOOOOOOOOO MUCH.....
Im selling a lot in a HOA. What do I do when the buyer moves on-site and stops paying ? Once I have sent the proper notice how do I proceed with removing them, ? Lot is in Texas.and remains in my name until lot is paid in full.
If you refinance aren’t you just taking out a new mortgage on the property for its current value and then walking away with the difference. And by doing that wouldn’t your mortgage go up?
This was great! just getting start so this puts some things into perspective.
Brandon, i like the BRRR strategy, and I want to protect myself from lawsuits, slip and falls. I'll have to put my properties in a LLC, do i transfer the deed of my property before i refiance or after I refinance?
thats a good question, hoping he'll get back to you.
Join BiggerPockets and ask in the forum. There are also a lot of resources there and he has free webinars on the regular. Good luck.
Awesome and great information, but if you get an FHA loan you must live in the property right? And I guess I you get a hard money lender you have to have the rent amount to be greater than the interest rate plus expenses
Thanks for the video
My Wife and i are currently searching for our investment with a house hack, in Peekskill NY. Using about $45-50k!
I got $30K to buy a two bedroom house that needs full renovation but they are selling the house for $95K the house needs around $45K to do the remodeling, I put an offer of $60K cash and they are not to disappointed about my offer,this will be my first investment on real estate, I want the house for rent and once the house is remodeled can worth around $145K .Any body has an advice on my investment??
Thank you for your education there's a trick but you don't have very good explanation . How you purchased a house for $100,000 and renovate it with few thousand dollar then it suddenly become a $150,000 value property in your bank appraisal
How do you determine the details with the private lender? For example if they let you borrow the $70k to buy the property at what percentage do you pay that money back?
Yes it was a good video, my problem is that I have additional income check beside my reg pay check. I have an mortgage as my only debt. Im trying to get into investment property (Duplex, Triplex and Quads) but i don't have a good or big downpayment any ideas? I don't mind starting small either....i prefer 30-80k properties.
I love and respect you guys for the awesome job you are doing to educate us but why you keep on making it seems so easy to refinance? First there are conditions that you must meet, such as your income level, your credit rating and also your debt level. You dont just say u have a property for $150,000 and the bank the bank tell you they can give you $100k. It does not work like that otherwise many more of us would be doing it. In Most cases they may give you 75% of the value of the property provided that you have good income and and good credit. Please be sure to cover these because you will come of as not being authentic on the subject. Thank u.
Stephen Williams Please keep in mind that this is about what Brandon would do with 30k. So for him refinancing would be easy. This is not a full walkthrough of every worst case scenario for someone else although he does address various scenarios. Otherwise the video would be too long and the point would be lost.
Awesome video. This is almost exactly my sitch. I'm pretty new (first deal still to come), at RE investing. Need to find a partner and a mentir and a ...! Thanks for all illumination B-turn.
Hi Brandon Thank you.... I have been watching and dialing in to the content to learn the ropes around re investing. It looks like your from the Seattle area..'''' very cool.. maybe well end up linking up through a deal someday.. Ill be watching and checking in. thanks. this model is what im planning to do in the foreseeable future. Seattle market may require a larger down amt?.. 60k? would that be a better amount for acquisition around east side of Seattle like Renton Kent ?? where would you say i should be looking?? I live in Juanita Kirkland area. If your familiar with area. thanks and i will continue to tune in!!.
Cheers
Ryan
Thanks BP
hmmm...notice he didn't mention he would do wholesailing? I've thought about doing that investment type, but I feel unsteady about that type of investing. Seems like there is a lot of gurus out there selling information products on wholesailing. That fact, makes me weary about doing wholesailing. If anyone successfully does wholesailing as a business...please chime in.
Check into a local real estate club and ask how you can help a wholesaler. Work part time for them in exchange to learn the business
How do you gauge how much you should charge for rent
Wow you rock , I must make sure i listen all your videos.
yes stev he really good this man brilliant!!!!!!!!!!!!
Hi Brandon What are you favorite cities to buy in?
The only question I have is when you mentioned the BRRRR Method, did you give back only the $70,000 the lender lent you or did you give him more?
@Shaquan Williams Many hard money lenders/ private loans require you to pay interest each month until the loan is due.
Great info, thanks!
Thanks
I would probably go the brrrr strategy!
Question: In the deal you outlined, what benefits the hard money lender giving you $70k and in a few months getting that exact amount back? Was there no interest?
hard money loans are going to typically be like double what a typical mortgage rate will be, so expect to pay 8%+ for a short term loan
What does the investor gain by putting in 70k just to get his 70k back? (Because you said you are only refinancing 100k) and apparently you own the property? (B/c you’re collecting rents)?
Jacob Farnsworth You are basically getting a cash flowing rental property in essence with no money down,. That’s the end game of a BRRRR project so you can rinse and repeat. This way, you can buy several houses per year as opposed to the traditional route of putting your $30k down, then taking years to save enough for another 20% down payment and getting property #2.
How's it going!? So, I am just starting to do research on real estate investing... I have quite a special situation with my work... and I don't even live in the US right now because of it... so, anyway I plan to spend the next year doing heavy research into this topic and I would love to know what you think about where I should start to build a good foundation of knowledge. I watched the interview with your mentor as well... I have a mentor so it sorta caught my eye.. anyway thanks for the great video!
+Steven Blancher Hey Steven, BiggerPockets.com is the worlds leader in real estate investing knowledge and information. Hop on the site, listen to our Podcast (#1 Podcast on iTunes for REI), read our blogs, connect with users, and SO much more.
Brandon,
I'm not able to wrap my mind around how you can borrow $100k on a property worth $150k when you still owe $100k. Thanks, Dean
@@stldweller you explained well
@@stldweller
Thanks. Yeah, I went back and watched again after I commented. I followed Brandon closer the second time around. Thanks again.
The key is that that $100k is earmarked primarily to pay off the other loan. He most likely never sees that full $100k, the majority of it is paid directly by the lender to the previous lender with the balance being paid to him.
Branden, your example of BRRR and asking bank for 100k would be more than most banks LTV on investment property, right? Banks typically do up to 75% of the value, unless I missed something??
his new value after rehab was $150K. So $100K would be a $66% LTV, no?
Great video on how to use savings tactfully!!
great video as always love your thinking
I would like to try the flip method and keep it up till I could keep one of the flips and flip some more.
I know you can get a house at a heavily discounted price if paying cash in full and buying something a bank wouldn't give a mortgage on....but your suggesting to buy with an fha loan and hold a mortgage. How are you finding properties like this with so much meat on the bone?
Thanks!
This might be a dumb question but With cash out refinance do you only pay for the cash that was taken out or do you pay for what the property is worth?
lets say u cant find a private lender. u go to the bank with 20k they give u 80 u buy a house for 100k. if the price goes up u ask for another 100k loan with the equity. but how much will the bank actually lend u i mean like will they give u enought for 5 houses in a year?
would be cool if you had a whiteboard you wrote on while talking about numbers
Then this clip must be 2x longer. Anybody with normal math knowledge can understand this easily without really need to see a whiteboard.
Appreciate the Info.
With 30k you can't do nothing in L.A. Area. There is no $100,000 dollars house anymore. The chips house is start from $ 400,000 in bad area
hyeeagle that's what he just said
Then your only option is to get out of the LA area and move to someplace like Kansas City and start investing there.
That’s a democratic city for you!!!!!
@@tonyrawhouser1373 lousy democrats and their free markets..or something
Naw 300s in a bad area look again.
Don't you (the borrower) have to live in the home with an FHA loan?
awesome video thank you
Am I to understand that he has $100k in equity in his appraised home of $150k? So he basically bought the house ($70k) with "cash" provided from his private lender, then put in $30k of his own? Is that how he is leveraging his home to get the $100k loan from the bank? If that's the case, the biggest obstacle seems to be acquiring the right home, at the right price and rehabbing it to make it worth more...everything else should fall into place
Are there "seasoning" requirements for the refi from the lender?
What is an SHA loan ? And a 203 k loan ?
The loan at the bank is a personal loan ? Or a heloc type ?
What is house hacking? And the brrrr strategy better explained pls
Trying to start with just *$3k!*
just one thing: rental properties don't really appreciate - they're the most valuable when they are fresh & new. After that, the value starts to decline, and after a while YOU have to work at making it valuable again by refreshing it. Appreciation means that the value goes up all by itself without doing anything, like an original Van Gogh, or a mint condition Corvette.
Dorothee P. - Not true! It depends on the city. I have a rental that more than doubled in value over the last 10 years from 205k to 450k.
That's why you keep renting out
Well you're partly right. The property does appreciate in value but a lot of that appreciation value is spent in upkeep and maintenance of the property. For example I buy a $200,000 house and now it's worth $230,000 3 years later but I spent $20,000 in year 3 on some needed renovations and improvements. However I was able to raise the rent by $300 a month because the house is much nicer than it was before the maintenance and improvements were made.
anyone can answer this... I Live and work in NY and for the future of my family I would like to invest in another state. My question is which state????????
@Brandon, What is the equivalent mortgage of FHA in Canada during current times?
Great info thank you !
👂👂 the good stuff
FHA loans may require you to live in the house for the first 2 years before renting it out.so idk if this is the best route
If you house hacking you can rent it out while you're living there. Which can cover your mortgage and 4 plexs can easily cashflow with you living for free.
Oy3
is it smart to buy property in another state? i am in california - cant afford a mail box with $30k - let alone a house...maybe buy in iowa or other places...how do i keep track of repairs contractors, etc?
good question !!!!! gmmmm..... very good question. if make sense long distance to do business i dont think sa..