Welcome!

By registering with us, you'll be able to discuss, share and private message with other members of our community.

SignUp Now!

Looking for options on my next investment

N

nubiwan

0
Registered
Joined
Aug 20, 2009
Messages
159
Here`s my story to date:

I currently have 3 investment properties.

1) The first I bought at $140K, renovated and got appraised at the bank for $300K. An honest appraisal for this new home.

2) I financed my second and third property from the equity in number 1. I was able to mortgage my 2nd property for $110K because I was still employed at the time. My 3rd property is on a 2.5% int. credit line of $75K that I established prior to losing my job in February.

3) My total debt on all 3 properties is $275K, and my monthly income is $3K with a cashflow after bills of about $800 per month.

4) Depending on whether you speak to a bank appraiser, or real estate agent, my total property value is around $480K. For some reason in this province, appraisers highly underestimate the values in rental properties.

I currently have $40K of my own cash to put into my next deal, but would probably not get a bank loan because of my employment position. I can put my properties on the line for my next deal, which migh necessarily have to be a flip, to start building a bit of capital and investment income.

Looking for ideas on this, and thoughts on how this REIN network might be able to assist me. For thos interested, I am in Newfoundland, where the housing market has not dipped at all in this recession.

Cheers for any advice.

Nubi
 
In your shoes I would not do anything else until I found another stable good paying job. If you hit a dip in the road at this point in time you will be placing everything you have in jeopardy.
Find a job FAST.
 
QUOTE (invst4profit @ Aug 20 2009, 08:43 PM) Find a job FAST.

Great advice. I couldn`t agree more.
 
QUOTE (invst4profit @ Aug 20 2009, 08:43 PM) ...
Find a job FAST.
yes, an option, but also to sell one existing house or 2 .. pull some more equity out .. and buy-renovate-sell another one.. as you seem to be able to make money at it !

If this is what you love to do, you must come to the Red Deer REIN event and hear Ron LeGrande .. as he is addressing exactly your situation ! tight cash .. but willing to roll up your sleeves, repair properties and sell them for a quick profit !

Related posts:
5 ways to make money http://myreinspace.com/public_forums/General_Discussion/61-3347-5_ways_to_make_money.html

How to get started http://myreinspace.com/public_forums/General_Discussion/61-4391-How_to_get_started_.html
 
QUOTE (thomasbeyer2000 @ Aug 21 2009, 01:52 AM) yes, an option, but also to sell one existing house or 2 .. pull some more equity out .. and buy-renovate-sell another one.. as you seem to be able to make money at it !

If this is what you love to do, you must come to the Red Deer REIN event and hear Ron LeGrande .. as he is addressing exactly your situation ! tight cash .. but willing to roll up your sleeves, repair properties and sell them for a quick profit !

Related posts:
5 ways to make money http://myreinspace.com/public_forums/General_Discussion/61-3347-5_ways_to_make_money.html

How to get started http://myreinspace.com/public_forums/General_Discussion/61-4391-How_to_get_started_.html

Thanks for the responses all.

Forgot to mention two previous properties that I renovated making $7K and $240K on sale. These were private residences, so not really classed as investment properties.

In the last 3 years, I have built property value near $500K ($200K in equity), doing this stuff part time. I`ve been super frugal (as well as lucky) when selecting the properties I bought, and made sure the terms and conditions got me into houses at bargain basement prices.

If I take my last home as one example. I paid $55K, I paid for an appraisal that came in at $75K as is, then spent under $20K in renos, and had an agent look at the place 3 months later, and tell me it is worth $130-140K. I think $120K is an honest figure. Regardless, equity of $45-50K. I have considered selling it, but my general plan is to have around 10-20 units when I retire as retirement income. I was also concerned about the capital gain I would trigger disposing of the property.

So, on paper, in a little under 3 months, I have made myself $50K. All because I knocked on two doors, and asked a neighbour who owned an old run down house. If I can duplicate that effort 3 or 4 times a year, then why would I want to look for a 9-5 job, when what I`d really like to do is find partner(s) to help find more investment properties and do what I love doing?

The fact is, that I have access to cash from friends, and can use the properties I now have as collateral with them, if I need to. I just thought there might be some other alternatives for me to consider. Hope I do not come across as facetious here, but get a job was pobably the most obvious answer to myself, and I was rather hoping to hear something a little more `inventive`.

Thomas, I must go and read that thread on getting started. Perhaps you can tell me a little more about that thing in Red Deear and how it might help me on the East Coast. One of the reasons I did not join this site a few years back was it`s Alberta focus, and relevance to the local small market.

Again, thanks all.

Tony
 
Nope no other suggestions from me.
My thinking is that although you may have value on paper you can not eat paper. Well I suppose you can but it`s not healthy.
You need more positive cash flow. In the mean time you need a job to help you through the financial tough times otherwise the bank could end up with your hard earned "value on paper".
The proper way to build wealth, in my opinion, is to have a good solid income that you gradually replace with investment income. Once your investment income is high enough to replace your work income completely you can drop the 9 to 5.
Not till you reach that level of security with investment income, which tends to fluctuate, would I personally give up my day job.
From that point on the sky is the limit. In the mean time you may be investing on borrowed time.
Definitely get a job.
 
Good advice here. A job is key...

One other option is to partner with someone that can qualify for a mortgage. You provide the capital and they provide the mortgage qualification.
We have partnered with people is this same position. They provide the capital and we provide the investment and mortgage qualification...
 
Fliping properties is a job, as is building investment portfolio. Many years must pass before that effort turns into passive income. No kidding.
If this is what you love to do, than find yourself some good JV partners to provide money and mortgages and you go flipping to generate cash. Some of it you keep, some you re-invest. The possibilities are endless. from what I hear you should do well in that part of the world.
 
QUOTE (GaryMcGowan @ Aug 21 2009, 05:26 PM) Good advice here. A job is key...

One other option is to partner with someone that can qualify for a mortgage. You provide the capital and they provide the mortgage qualification.
We have partnered with people is this same position. They provide the capital and we provide the investment and mortgage qualification...

I guess my question is that if I theoretically find myself a property that cost up to $100K, that needs $25K of reno work, and I have $30-40K that I can put into it, how do I go about finding JV`s to partner? What do they want to see from me? What kind of return or split would a JV want to see if I complete my reno in say 3-6 months?

Finally, (joint Ventures) are we talking hard money lenders here or is that just something you hear about in the US?
 
QUOTE (TodorYordanov @ Aug 21 2009, 06:53 PM) Fliping properties is a job, as is building investment portfolio. Many years must pass before that effort turns into passive income. No kidding.
If this is what you love to do, than find yourself some good JV partners to provide money and mortgages and you go flipping to generate cash. Some of it you keep, some you re-invest. The possibilities are endless. from what I hear you should do well in that part of the world.

thanks Todor,

The market here perhaps plateaued for 6 months but has returned strong as ever in the last 30-60 days. To be fair, I consider housing prices here bordering on the ludicrous. But driven by the promise of offshore oil, the forecast is for it to continue on up. Housing starts increasing all the time.

I am interested to see if you have any clients / contacts here. Or, if there might be any interest in doing so.

Tony
 
I think a good solution to the question you ask can be found by clicking here.

Joint Venturing is a very good way to build your Real Estate portfolio by teaming up with someone who has something that you are missing. Read the link above and you can find out more. This is exclusively how I have built my portfolio, and you will find many people on this site who have done the same.
 
QUOTE (nubiwan @ Aug 21 2009, 07:16 PM) I guess my question is that if I theoretically find myself a property that cost up to $100K, that needs $25K of reno work, and I have $30-40K that I can put into it, how do I go about finding JV`s to partner? What do they want to see from me? What kind of return or split would a JV want to see if I complete my reno in say 3-6 months?

Finally, (joint Ventures) are we talking hard money lenders here or is that just something you hear about in the US?

Very hard questions to answer specifically. Also you will find that the JV arrangement changes as you build more trust and reputation, the scope and scale of the project changes, etc. etc. But most importantly always think WIN-WIN. You can`t go wrong with that. Second - don`t sell yourself short.
Search for what what Thomas Beyer has to say on this subject in some of his previous posts.
The JV package that Russell suggests is the GOLD.
 
QUOTE (RussellWestcott @ Aug 21 2009, 08:55 PM) I think a good solution to the question you ask can be found by clicking here.

Joint Venturing is a very good way to build your Real Estate portfolio by teaming up with someone who has something that you are missing. Read the link above and you can find out more. This is exclusively how I have built my portfolio, and you will find many people on this site who have done the same.

Any chance I can get a printed copy of the book instead of having to read it onscreen. I realize your need for security and copyright, but not being able to print this limits my own access to it. Simply like to read things in bed.

Tks
Tony
 
You need to attend one of Ron LeGrand`s events. I personally did this back in 2003, I gave up my day job, I have personally transacted on well over 150 properties, and I have never looked back. QUOTE (nubiwan @ Aug 20 2009, 08:26 PM) Here`s my story to date:

I currently have 3 investment properties.

1) The first I bought at $140K, renovated and got appraised at the bank for $300K. An honest appraisal for this new home.

2) I financed my second and third property from the equity in number 1. I was able to mortgage my 2nd property for $110K because I was still employed at the time. My 3rd property is on a 2.5% int. credit line of $75K that I established prior to losing my job in February.

3) My total debt on all 3 properties is $275K, and my monthly income is $3K with a cashflow after bills of about $800 per month.

4) Depending on whether you speak to a bank appraiser, or real estate agent, my total property value is around $480K. For some reason in this province, appraisers highly underestimate the values in rental properties.

I currently have $40K of my own cash to put into my next deal, but would probably not get a bank loan because of my employment position. I can put my properties on the line for my next deal, which migh necessarily have to be a flip, to start building a bit of capital and investment income.

Looking for ideas on this, and thoughts on how this REIN network might be able to assist me. For thos interested, I am in Newfoundland, where the housing market has not dipped at all in this recession.

Cheers for any advice.

Nubi
 
Hi Nubi,
It sounds to me like you need a creative broker to work with. There`s always a way - it`s just finding it! What about a JV, with someone who is low on cash but would be good for a mortgage?




QUOTE (nubiwan @ Aug 20 2009, 08:26 PM) Here`s my story to date:

I currently have 3 investment properties.

1) The first I bought at $140K, renovated and got appraised at the bank for $300K. An honest appraisal for this new home.

2) I financed my second and third property from the equity in number 1. I was able to mortgage my 2nd property for $110K because I was still employed at the time. My 3rd property is on a 2.5% int. credit line of $75K that I established prior to losing my job in February.

3) My total debt on all 3 properties is $275K, and my monthly income is $3K with a cashflow after bills of about $800 per month.

4) Depending on whether you speak to a bank appraiser, or real estate agent, my total property value is around $480K. For some reason in this province, appraisers highly underestimate the values in rental properties.

I currently have $40K of my own cash to put into my next deal, but would probably not get a bank loan because of my employment position. I can put my properties on the line for my next deal, which migh necessarily have to be a flip, to start building a bit of capital and investment income.

Looking for ideas on this, and thoughts on how this REIN network might be able to assist me. For thos interested, I am in Newfoundland, where the housing market has not dipped at all in this recession.

Cheers for any advice.

Nubi
 
QUOTE (joannelson @ Aug 31 2009, 12:39 PM) Hi Nubi,
It sounds to me like you need a creative broker to work with. There`s always a way - it`s just finding it! What about a JV, with someone who is low on cash but would be good for a mortgage?

How can someone be low on cash but good for a mortgage? You mean co-signing a loan? Bit lost.
 
QUOTE (nubiwan @ Oct 13 2009, 07:56 PM) How can someone be low on cash but good for a mortgage? You mean co-signing a loan? Bit lost.

I`m very green on the subject, but I would assume it would be someone with a steady work history in one industry.

If you have a big lump of money and no job, lenders are going to assume your 40k will eventually dwindle down to nothing, whereas this co-signer may have less money, but has steady work, and therefore would be able to pay the rest off with their wages.


I`ll toss my own question in on this thread.. can`t you register yourself as a business, earning what you`re earning, and thus lenders will see a positive cash flow?

Again, I`m very new to real estate investing, but I hope what I`ve said makes sense.
 
You must log in or register to reply here.
Back
Top Bottom