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GOLD! STOP Paying Rent: Live For Free

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The Abundant Man

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I believe this is the one:
Thanks! That's exactly what I was looking for!
 

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KetoCarlo

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MJ is correct when he says “there is no f’ing list” but damn you came real close to it with this post! I really appreciate your advise and how deep you go into detail.

Thanks to this thread I currently have my mortgage preapproval done and I am in the process of finding a owner occupied multi family home as we speak, once I find something I’ll be sure to update here! Thanks again for the awesome advise.
 

spreng

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just found out, if you get a duplex in an area with the best public schools in major cities, people will rent one out and not even live there. Just so their kids can attend the schools.
 

ChrisJHarrington

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just found out, if you get a duplex in an area with the best public schools in major cities, people will rent one out and not even live there. Just so their kids can attend the schools.

That's a pretty nice life-hack.
 

ecommercewolf

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Great thread.

Bigger Pockets Real Estate podcast is also a goldmine of information with interviews of people that have leveraged house hacking to become successful.
 

Vegvisir

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Would like to give a big shoutout to @G_Alexander for giving me the steps/inspiration to get my first investment property under my belt. I got a very good deal on a duplex in a good part of town for only 100,500 dollars that has two units that will rent for 850 each(1700 total). My mortgage is only about 700 a month so this property cash flows very well. It does need some work but I budgeted that into the purchase price. For those of you out there thinking about taking the dive, DO IT. I now can live rent free or pay off my mortgage in about 4.5-5 years paying what i was in rent on my side plus the other units income putting it all toward the mortgage!

28015
 

Michael Burgess

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Would like to give a big shoutout to @G_Alexander for giving me the steps/inspiration to get my first investment property under my belt. I got a very good deal on a duplex in a good part of town for only 100,500 dollars that has two units that will rent for 850 each(1700 total). My mortgage is only about 700 a month so this property cash flows very well. It does need some work but I budgeted that into the purchase price. For those of you out there thinking about taking the dive, DO IT. I now can live rent free or pay off my mortgage in about 4.5-5 years paying what i was in rent on my side plus the other units income putting it all toward the mortgage!

View attachment 28015
Nice work! Good looking building :)
 
G

Guest24480

Guest
I wonder how viable this strategy is in an expensive area with the current state of the real estate market. I'm looking to house hack in the next few months but I'm weary of all the people saying not to buy in this market. I guess if the cash flow is there and the deal makes sense it shouldn't be a problem.
 

Vegvisir

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I wonder how viable this strategy is in an expensive area with the current state of the real estate market. I'm looking to house hack in the next few months but I'm weary of all the people saying not to buy in this market. I guess if the cash flow is there and the deal makes sense it shouldn't be a problem.

Yes, as you mentioned its all about finding a property that cash flows correctly. Regardless of the market you will always find situations where people have to let the property go because of different circumstances. For example the property i just picked up was owned by couple going through a divorce. Start looking now because it will take awhile to find the right deal! Good luck!
 

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G

Guest24480

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Yes, as you mentioned its all about finding a property that cash flows correctly. Regardless of the market you will always find situations where people have to let the property go because of different circumstances. For example the property i just picked up was owned by couple going through a divorce. Start looking now because it will take awhile to find the right deal! Good luck!
Glad you mentioned that. Those are definitely the types of properties I plan to look for. The bigger the barrier to entry for finding the property the better especially in a competitive market.

Yes I am going to start now just hoping to have something picked up in a few months. Planning to analyze hundreds of deals if that's what it takes.
 

Michael Burgess

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Bump on this thread!

Screen Shot 2020-07-03 at 10.40.24 AM.png

I sold my 4 unit building (see a page back for the story of buying it), and here's what I cleared after selling it - and this is AFTER I put a 2nd mortgage on it for another $30K a few months back, which I got to keep in my pocket. Bought for $156K, sold for $225K, minimal work in management or improvements.

Real estate has been the first business model I've worked with that's really given me a strong sense of traction, and has helped me to meaningfully change my life in a big way.

I turned this 4 unit apartment building (closed on it just over a year ago) into another apartment building, a farm property, a personal home in a great city, and more liquid cash then I've ever had before.

Big thanks to everyone who's started this thread and contributed to it!
 

Ronak

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Bump on this thread!

View attachment 33879

I sold my 4 unit building (see a page back for the story of buying it), and here's what I cleared after selling it - and this is AFTER I put a 2nd mortgage on it for another $30K a few months back, which I got to keep in my pocket. Bought for $156K, sold for $225K, minimal work in management or improvements.

Real estate has been the first business model I've worked with that's really given me a strong sense of traction, and has helped me to meaningfully change my life in a big way.

I turned this 4 unit apartment building (closed on it just over a year ago) into another apartment building, a farm property, a personal home in a great city, and more liquid cash then I've ever had before.

Big thanks to everyone who's started this thread and contributed to it!


Congrats! You took action, and in a relatively small time period, made some amazing progress. Magic of the forum combined with an action oriented mindset= success. Do you have a separate thread? If not, why not? Start one today to share your journey...
 

ecommercewolf

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Bump on this thread!

View attachment 33879

I sold my 4 unit building (see a page back for the story of buying it), and here's what I cleared after selling it - and this is AFTER I put a 2nd mortgage on it for another $30K a few months back, which I got to keep in my pocket. Bought for $156K, sold for $225K, minimal work in management or improvements.

Real estate has been the first business model I've worked with that's really given me a strong sense of traction, and has helped me to meaningfully change my life in a big way.

I turned this 4 unit apartment building (closed on it just over a year ago) into another apartment building, a farm property, a personal home in a great city, and more liquid cash then I've ever had before.

Big thanks to everyone who's started this thread and contributed to it!

Would love to see a thread as well. Congrats!
 

fridge

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From what I've gathered -- is it best to just look at sold properties (duplex/triplex/fourplex) and then contact all the owners in the areas you're interested in? Where I live, there's really not much for sale on the market right now (within reasonable asking price), so would it make sense to just gather out all that information and start making some calls/writing some letters inquiring about their willingness to sell the property?
 

WJK

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From what I've gathered -- is it best to just look at sold properties (duplex/triplex/fourplex) and then contact all the owners in the areas you're interested in? Where I live, there's really not much for sale on the market right now (within reasonable asking price), so would it make sense to just gather out all that information and start making some calls/writing some letters inquiring about their willingness to sell the property?
You're talking about becoming a "bird dog". That's a real art and a bunch of learned skills. Good luck.
 

Hiimmj15

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Tennessee
Fastlane brothers and sisters, I am here to show you the light should you so accept to see it. I’d like to offer some advice from my experiences and to share the wealth of living rent free.

This is not a revolutionary topic, and I am not a revolutionary human. Living rent free has been done by many. Living rent free with cash flow has also been done by many (including me). It is easy. It will likely end up costing you less than $10,000 (I only brought $5,900 to the closing table on my first property). It’s a no brainer move for those of you who are hungry and ready to forge your own path in life. Ever since I posted about my first 3-flat, members have reached out to me asking what type of financing I utilized, where I began, what books I read...this thread is a basic answer to many of those questions.

This thread is not intended to make you join the apartment investor Fastlane (although cash flow has severely addictive qualities, just ask @SteveO, @AroundTheWorld, @zen*******, @RealOG, @CashFlowDepot, etc.). No, this thread is here to help you make one simple move that can stabilize your life as your pursue whatever Fastlane you choose. Stop paying the man each month (me) and start focusing on your goals. I hope that this thread will help even JUST ONE person on here to live without the constant cloud of having a rent / mortgage payment every month.

No longer will the excuse of “I have too many bills to pay to quit my job and enter the Fastlane full time” remain valid. We are building your shelter. We are building your money tree. We are building the castle from which you will wage your war.

This thread is targeted for those of you who currently have:
  • A stream of income from your lame J.O.B., from your own business (need 2 years of 1099 history for this to work if self-employed), from your full blown Fastlane venture or from your sugar daddy/ momma (whatever) and
  • Currently do not have an FHA mortgage
We are going to learn how to purchase a duplex, 3-flat or 4-flat with as little as 3.5% down that will cash-flow and pay for itself.

Are you tired of paying your landlord your hard earned wage each month and having nothing to show for it? Do you wish you had a money tree in your backyard? Good. Let’s rock and roll.

Let’s break down what you will need to do into a simple list:

1. Contact / engage a mortgage broker
    1. Hop on Yelp! and search for the best mortgage broker in your city. Pick one who has high remarks in their reviews. Don’t get bogged down searching for the perfect mortgage broker. There are thousands in every city. Call a few and pick the one that pays attention to you (answers quickly, calls you back quickly, etc.)
    2. Obtain a mortgage pre-approval (broker will walk you through the steps) for an FHA mortgage (broker will walk you through all the documents they need you to sign)
i. An FHA mortgage is a tool that first time home buyers who will be owner-occupants (move into the property) can utilize​
ii. Broker will run your credit (FHA minimum score threshold is around 550 I think, so hopefully you are a responsible, bill-paying-son-of-a-b*tch)!​

3. Once you are pre-approved, the mortgage broker will get you the loan you need once your real estate broker (step 2) finds you the property you want. They will charge you a fee at closing (likely 1%, or 1 “point”) which can be rolled into your loan​

2. Engage a real estate broker
    1. Same thing, head to Yelp! and pick based on reviews. Call a few and tell them what you are searching for:
    2. Tell your broker you want to look for owner-occupant Freddie Mac (HomeSteps), Fannie Mae (HomePath) properties that are between 2 to 4 units (our ideal number is 3 or 4 units)
i. The reason we like Fannie and Freddie foreclosures is because owner-occupant buyers have a 14 day window to bid on these properties before investors. This restriction is intended to keep real estate investors from driving up the price of houses on the home buying citizens of America. Which is good for you, Mr. first time home-buyer!​



3. Look at some properties (criteria)
    1. Check out properties you think fit the size criteria, and that are in a good area of your city. Try to stick near big transportation hubs (trains) and try to pick an up-and-coming neighborhood (read: follow the hipsters)
i. Hipster neighborhoods are the next places that will “turn” economically in a given city, and are great spots to realize cash flow​

2. Hop on PadMapper.com (good for checking rents in an area) to see what kind of rents you can expect from the property you are looking at​
i. Example (all made up): 3 unit, Seattle with all units having 2 beds 1 bath.​
  • Rents in the area are $1,000 per unit on average (same size, quality, finishes, etc.)

3. Take the gross amount of rents and apply a safe buffer of 50% for expenses:​
i. 3 units x $1,000 = $3,000 per month gross rents x 50% = $1,500 expenses​
  • This means you keep $1,500 in your pocket (your “NOI” or Net Operating Income)

4. Figure out a buffer for your mortgage (and any possible cash flow)​
i. If you paid $200,000 for this property @ 4.25% for 30-years and 3.5% down, your monthly payment would be ~$1,500. Voila, no mortgage​
  • This doesn’t take into account that most months you will not hit 50% expenses. Some will be 0% (very cash positive), some will be 150% (cash drain) so be sure to keep reserves set aside from the good months for when the bad months come around
ii. You make your money when you BUY not when you sell​



4. Pull the trigger!
    1. I would recommend looking at 15 to 20 properties with your agent and getting a good feel for the market. You will start to recognize trends.
This whole process will only take 2 months or so and sets you up for months of lower-stress productivity. Stop subscribing to get rich quick mindset. Good things require process and take time.

If this interests you, just start calling people! Just because you talk to brokers doesn’t mean you HAVE to buy something. Good brokers will hold your hand through the whole process. If a property was recently rehabbed or isn't more than 10 years old...then use 40% for expenses when you do your quick-check math. If a property has under market rents...don't pay for what the property "COULD" be operating at. Pay what it is currently worth knowing that when you increase the rents you will cover your mortgage and realize equity appreciation. Just use common sense.

If you think you can spend your resources in a better place, or make the “jobless” leap without buying your “castle”, then please do. This thread is for people stuck in a job or who are too timid to take a leap of faith without first building a small form of support.

I did not even touch on the fact that you can utilize an FHA 203-k loan, and get rehab construction rolled up into your loan amount, or the larger fundamentals of apartment investing, but that is because I am not trying to teach you how to be a guru here, I am simply providing a path to ease your monthly financial burden.

If you are going to make this move and want to hit a home run, DO YOUR RESEARCH and take a dive down the rabbit hole. If you don’t want to spend a ton of time learning how to hit a home run, that’s alright because you must remember that singles, doubles and triples (pun intended) still put points on the board in the long-run. Just get moving NOW!

Read some apartment investing books over the course of a few weeks and then plan your path to freedom carefully. Don’t shoot in the dark, but make sure you do in fact shoot. No deal will ever be perfect. The timing will never be right. Pull the trigger now.

Note: I am not a financial advisor or a lawyer and this thread is purely an opinion that I hope you can draw from. Purchase property, or invest, at your own risk.

PS. Buy in the winter months if you want to get lower pricing and less market competition.

G
So Just wanted to make sure I have this clearly: This is a process for stabilizing oneself, not necessarily creating positive flow of income? I saw it referred to as a money tree a few times but also saw it was mentioned itd be just enough to basically cover costs of living, cancelling it out.
Is this accurate?
 

lowtek

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So Just wanted to make sure I have this clearly: This is a process for stabilizing oneself, not necessarily creating positive flow of income? I saw it referred to as a money tree a few times but also saw it was mentioned itd be just enough to basically cover costs of living, cancelling it out.
Is this accurate?
It can be either, depending on the market / loan conditions, etc. At the very least you're going to be living for very cheap or free, and in the best case you'll have some positive cash flow.
 

Hiimmj15

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Gotcha, thank you. Also, is there recommended reads for getting ready to do this? Theres always YouTube but just seeing if there is more specific stuff.
 

thechosen1

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Alright gang,
I've been trying to get started with my own space in a multifamily property. Problem is, I live in a far, far out "exurb" of the Greater Houston area and there are no multifamily properties.
In fact, my town is a company town with higher than average incomes and city council has effectively banned renters and multifamily construction in town.

I've contacted some local developers for quotes on building a 4 unit in a nearby (even smaller, more redneck) town, but they aren't responding anymore. Must think I'm not serious.

Also found a fourplex 30 minutes away but it's in a town that's even less desirable: 2000 people, no jobs or places to work, no major grocery stores or retailers, and pretty far from our business.

Any advice? Just yolo buy the land, start getting plans drawn up, hire contractors? Or keep pressing on developers? Or am I rushing into this idea too fast?
 

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Ing

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Alright gang,
I've been trying to get started with my own space in a multifamily property. Problem is, I live in a far, far out "exurb" of the Greater Houston area and there are no multifamily properties.
In fact, my town is a company town with higher than average incomes and city council has effectively banned renters and multifamily construction in town.

I've contacted some local developers for quotes on building a 4 unit in a nearby (even smaller, more redneck) town, but they aren't responding anymore. Must think I'm not serious.

Also found a fourplex 30 minutes away but it's in a town that's even less desirable: 2000 people, no jobs or places to work, no major grocery stores or retailers, and pretty far from our business.

Any advice? Just yolo buy the land, start getting plans drawn up, hire contractors? Or keep pressing on developers? Or am I rushing into this idea too fast?
You can take a house and ad some garages and rent tnem out and earn the money with them.
In better areas often garages are rare.
 

thechosen1

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You can take a house and ad some garages and rent tnem out and earn the money with them.
In better areas often garages are rare.
Good idea, but my area has plenty of garages.

You could say I'm out in the "country." Lots of acreage, farmland, horses, etc. In town we have a nice shopping center, some suburbs etc. It's actually somewhat urban in downtown, just old. We have 30,000 people in the main city but it gets pretty redneck pretty fast as you drive out.

I'd really like to do the live-in multifamily thing. Just struggling to find a lot with proper zoning to build one, or one for sale. Moving to Houston would open possibilities, but then I'd have an hour+ commute.

I guess nobody has any tips. There are seriously no multis within an hour drive!
 
Last edited:

Akshay Kumar

New Contributor
Read Millionaire Fastlane
May 10, 2020
37
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20
India
Fastlane brothers and sisters, I am here to show you the light should you so accept to see it. I’d like to offer some advice from my experiences and to share the wealth of living rent free.

This is not a revolutionary topic, and I am not a revolutionary human. Living rent free has been done by many. Living rent free with cash flow has also been done by many (including me). It is easy. It will likely end up costing you less than $10,000 (I only brought $5,900 to the closing table on my first property). It’s a no brainer move for those of you who are hungry and ready to forge your own path in life. Ever since I posted about my first 3-flat, members have reached out to me asking what type of financing I utilized, where I began, what books I read...this thread is a basic answer to many of those questions.

This thread is not intended to make you join the apartment investor Fastlane (although cash flow has severely addictive qualities, just ask @SteveO, @AroundTheWorld, @zen*******, @RealOG, @CashFlowDepot, etc.). No, this thread is here to help you make one simple move that can stabilize your life as your pursue whatever Fastlane you choose. Stop paying the man each month (me) and start focusing on your goals. I hope that this thread will help even JUST ONE person on here to live without the constant cloud of having a rent / mortgage payment every month.

No longer will the excuse of “I have too many bills to pay to quit my job and enter the Fastlane full time” remain valid. We are building your shelter. We are building your money tree. We are building the castle from which you will wage your war.

This thread is targeted for those of you who currently have:
  • A stream of income from your lame J.O.B., from your own business (need 2 years of 1099 history for this to work if self-employed), from your full blown Fastlane venture or from your sugar daddy/ momma (whatever) and
  • Currently do not have an FHA mortgage
We are going to learn how to purchase a duplex, 3-flat or 4-flat with as little as 3.5% down that will cash-flow and pay for itself.

Are you tired of paying your landlord your hard earned wage each month and having nothing to show for it? Do you wish you had a money tree in your backyard? Good. Let’s rock and roll.

Let’s break down what you will need to do into a simple list:

1. Contact / engage a mortgage broker
    1. Hop on Yelp! and search for the best mortgage broker in your city. Pick one who has high remarks in their reviews. Don’t get bogged down searching for the perfect mortgage broker. There are thousands in every city. Call a few and pick the one that pays attention to you (answers quickly, calls you back quickly, etc.)
    2. Obtain a mortgage pre-approval (broker will walk you through the steps) for an FHA mortgage (broker will walk you through all the documents they need you to sign)
i. An FHA mortgage is a tool that first time home buyers who will be owner-occupants (move into the property) can utilize​
ii. Broker will run your credit (FHA minimum score threshold is around 550 I think, so hopefully you are a responsible, bill-paying-son-of-a-b*tch)!​

3. Once you are pre-approved, the mortgage broker will get you the loan you need once your real estate broker (step 2) finds you the property you want. They will charge you a fee at closing (likely 1%, or 1 “point”) which can be rolled into your loan​

2. Engage a real estate broker
    1. Same thing, head to Yelp! and pick based on reviews. Call a few and tell them what you are searching for:
    2. Tell your broker you want to look for owner-occupant Freddie Mac (HomeSteps), Fannie Mae (HomePath) properties that are between 2 to 4 units (our ideal number is 3 or 4 units)
i. The reason we like Fannie and Freddie foreclosures is because owner-occupant buyers have a 14 day window to bid on these properties before investors. This restriction is intended to keep real estate investors from driving up the price of houses on the home buying citizens of America. Which is good for you, Mr. first time home-buyer!​



3. Look at some properties (criteria)
    1. Check out properties you think fit the size criteria, and that are in a good area of your city. Try to stick near big transportation hubs (trains) and try to pick an up-and-coming neighborhood (read: follow the hipsters)
i. Hipster neighborhoods are the next places that will “turn” economically in a given city, and are great spots to realize cash flow​

2. Hop on PadMapper.com (good for checking rents in an area) to see what kind of rents you can expect from the property you are looking at​
i. Example (all made up): 3 unit, Seattle with all units having 2 beds 1 bath.​
  • Rents in the area are $1,000 per unit on average (same size, quality, finishes, etc.)

3. Take the gross amount of rents and apply a safe buffer of 50% for expenses:​
i. 3 units x $1,000 = $3,000 per month gross rents x 50% = $1,500 expenses​
  • This means you keep $1,500 in your pocket (your “NOI” or Net Operating Income)

4. Figure out a buffer for your mortgage (and any possible cash flow)​
i. If you paid $200,000 for this property @ 4.25% for 30-years and 3.5% down, your monthly payment would be ~$1,500. Voila, no mortgage​
  • This doesn’t take into account that most months you will not hit 50% expenses. Some will be 0% (very cash positive), some will be 150% (cash drain) so be sure to keep reserves set aside from the good months for when the bad months come around
ii. You make your money when you BUY not when you sell​



4. Pull the trigger!
    1. I would recommend looking at 15 to 20 properties with your agent and getting a good feel for the market. You will start to recognize trends.
This whole process will only take 2 months or so and sets you up for months of lower-stress productivity. Stop subscribing to get rich quick mindset. Good things require process and take time.

If this interests you, just start calling people! Just because you talk to brokers doesn’t mean you HAVE to buy something. Good brokers will hold your hand through the whole process. If a property was recently rehabbed or isn't more than 10 years old...then use 40% for expenses when you do your quick-check math. If a property has under market rents...don't pay for what the property "COULD" be operating at. Pay what it is currently worth knowing that when you increase the rents you will cover your mortgage and realize equity appreciation. Just use common sense.

If you think you can spend your resources in a better place, or make the “jobless” leap without buying your “castle”, then please do. This thread is for people stuck in a job or who are too timid to take a leap of faith without first building a small form of support.

I did not even touch on the fact that you can utilize an FHA 203-k loan, and get rehab construction rolled up into your loan amount, or the larger fundamentals of apartment investing, but that is because I am not trying to teach you how to be a guru here, I am simply providing a path to ease your monthly financial burden.

If you are going to make this move and want to hit a home run, DO YOUR RESEARCH and take a dive down the rabbit hole. If you don’t want to spend a ton of time learning how to hit a home run, that’s alright because you must remember that singles, doubles and triples (pun intended) still put points on the board in the long-run. Just get moving NOW!

Read some apartment investing books over the course of a few weeks and then plan your path to freedom carefully. Don’t shoot in the dark, but make sure you do in fact shoot. No deal will ever be perfect. The timing will never be right. Pull the trigger now.

Note: I am not a financial advisor or a lawyer and this thread is purely an opinion that I hope you can draw from. Purchase property, or invest, at your own risk.

PS. Buy in the winter months if you want to get lower pricing and less market competition.

G
Sadly, this doesn't work in India. Its next to impossible finding a cash flow positive property here. The rental yields are too low compared to the EMI.
 

WJK

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Speedway Pass
Oct 9, 2017
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Need a post on this stuff, where can I find more?
When I started this post I was thinking that you were talking about my trust deed business. So I'll leave that part of the post. Bird-dogging properties is where you going out and sniff out the properties or trust deeds. It's spending hours and hours doing research and driving neighborhoods. It's trips and trips to the Building and Safety office to check on how properties can be used or converted. Also, looking up all the permits and legal work that has been done to a property. And then running down owners to make offers. It's a numbers game.
The only way I've been able to make it really work is to have the cash or a credit line so you can work with all-cash offers. I started out with partners who had the cash. Most of the deals I made were closed in around 7 days -- or as soon as the title report was ready.
About trust deed bird-dogging...
I don't know where to send you. I have developed a whole program over my 45 years of chasing deals. I start with a prospecting system to find the targeted prospects. I spend hours and hours doing research to find possible deals that meet my profile. Then I make offers to purchase the trust deeds from my prospects based upon the risk factors. Those factors are mainly the class of property, the physical condition, how seasoned the loan is, and the local RE data I obtain from belonging to the MLS system.

Before I can make offers, I at least drive-by each property. It combines my experience in selling, appraising, and investing in real estate.
 
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door123

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Would like to give a big shoutout to @G_Alexander for giving me the steps/inspiration to get my first investment property under my belt. I got a very good deal on a duplex in a good part of town for only 100,500 dollars that has two units that will rent for 850 each(1700 total). My mortgage is only about 700 a month so this property cash flows very well. It does need some work but I budgeted that into the purchase price. For those of you out there thinking about taking the dive, DO IT. I now can live rent free or pay off my mortgage in about 4.5-5 years paying what i was in rent on my side plus the other units income putting it all toward the mortgage!

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How did you source this property? Using owner-occupant Freddie Mac (HomeSteps), Fannie Mae (HomePath)?

I couldnt find a single owner occupant foreclosed multi-family in my area (Northern Cali).
 
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JordanK

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@door123 Kinda hard to find a foreclosure when your state has C0VlD laws that prevent foreclosures at the moment???
 

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