0053 Multiple Ways You Can Purchase Rental Properties


portable real estate investment dot-com a property investment guide to creating real estate income for properties priced under 30 thousand dollars hello this is Lisa Phelps and welcome to affordable real estate investments.com it’s where I give you honest and a practical guide to real estate investing at a price you can afford but it’s how i purchased my properties people seem to be very interested in this question and I’ve alluded to it in different ways in my previous podcast but i will give you like succinct, i have four properties right now how I got them and please remember you guys can always an easy way to look at different things as go to my website and go under different categories I’ve contractors, financing mindset strategy, and you know click financing and you can see all the methods that I’ve done and it’s categorized under that for your convenience so it should be pretty great and thank you all so much i’m glad that you’re tuning in to find out about properties under thirty thousand dollars i hope that you have found some when you’ve done your search and realize that you know there’s a whole swath of working-class neighborhoods that are perfectly nice that you can invest in and it doesn’t just there’s not just two of them it’s all over the country okay there’s tons of working-class neighborhoods and some of the information out there on real estate investing it doesn’t even talk about this it just goes straight from super high-end to a war zone and it doesn’t have to be like that and if you haven’t paid attention to the economy there’s a huge swath of working-class neighborhoods and it’s going to be a bigger swath of working-class neighborhood so getting it now and getting your foot and your stamp on a certain neighborhood will help as it starts to as this becomes more of a norm and it’s funny because i meet other real estate investors and they buy these two hundred thousand dollar rental or investment properties and it doesn’t cash flow so you know they’re just only making the payment which is fine you know and they’re looking to pay off their investment in 15 to 20 years now that’s sort of cute and it’s a strategy but maybe it’s the engineer in me that goes you know well for 15 i pay off my property in two to four years and for the next you know, 12 years, i make eight thousand dollars a month so i’m making you know over, 12 years, i can make ninety six thousand dollars, so you’re hoping for appreciation at the end of 15 to 20 years but we don’t know this economy, we’re not, we don’t know if we’re just going to go up up and up from what I’ve seen we’re only going down in the wages department so I mean so betting on that long term it has to appreciate I think we’ve all got caught up in it and you know i’m earning money off of property I own a lot sooner when I look at my working-class neighborhoods so so just understand that not only are you doing this because it’s probably more affordable for you to start at this real estate investing, there’s a lot of information that doesn’t talk about it but this is the thing that we all need to start talking about so you know you’re gonna be first and you know if you follow in my footsteps to see what I’m seeing to really lay the groundwork for 15 years out you know what you’ve done is really going to you know be seen in that macro light anyways you can get more properties doing it my way too you can do one a year and not necessarily stretch your finances but you know 10, 15 years down the road you can sell this one, keep that one, but you’ve built up a portfolio in different neighborhoods and you know, we are the future, our working class real estate investments and that’s just it so it’s a good thing that I’m glad that you guys can follow and be a part of this phenomenon and so yeah so please check me out I’m on the Windows 8 Phone podcast and I’m going to look into getting on the apple itunes podcast but you catch me there so if you just have your phone and you want to check out and hear some back podcasts and some pack episode specifically in what you’re doing you do it anywhere in the world as long as you have your cell phone and a connection to your service provider so that is made for you to make it more convenient but yes we are on Windows 8 Phone podcast who has Windows 8 Phone I do that’s why I started there so I’m also going to try to go on Android and the iphone marketplace and i’ll let you know and that happens but sometimes it’s nice to just listen to something while you’re doing something else so and that’s why i spread this video like this instead of me riding like four pages for you to read you can listen you can do what you need to do but you still get the content especially me, I’m a really auditory type learner so if I’m just listening that’s how i absorb you know I don’t even need to see anything else all right so let me get into answering your question about how i purchased my properties so, so the first property I ownd was actually in vegas and i bought it at the top of the market that’s the one I lost to foreclosure, which is why I got started on this real estate investing strategy because I knew it was a good thing to do but you know I had a foreclosure so what do you do you know you have to shift your price point that’s what you do and learn how to do it well and competently so I had house in Vegas but I got laid off my job in 2008 remembered start at that time and I found a job out in Ohio, now I found the job in Ohio when I was working there and I had to rent out the house in Vegas so of course i bought in 2006 at the top of the market. I get laid off in 2008 so I went to Ohio to find a new job and I was paying almost a thousand dollars a month to keep the other one going which is haha the hard thing to do each month but I had to do it to keep current and I had to run it out but the rent didn’t cover what I owed on the mortgage and then um while i was in Ohio’s and so it looks like i was going to be there for some time i bought a thirty-five thousand dollar condo um I learned in Ohio that you can find really nice houses in pretty good neighborhoods for 30k or less and so all of a sudden I was like oh this is opening a new world so I purchased that with a regular mortgage this was before the foreclosure so I had no issues and I had good credit at the time but after i purchased it, that’s when I got laid off again and I wasn’t working so all of a sudden I couldn’t afford to keep this new place where I was actually living versus the older place so I in vegas that i bought for it was like three hundred, four hundred thousand dollars i purchased it for 2006 by the time I foreclosed on it in 2010 it was worth 150,000. So just a massive amount of depreciation on that property for what I stupidly purchased and what it was worth but hey I was actually glad that I did it while I was young um you know I have years ahead of me so I learned the mistake learned my lessons and it actually made me better on the other end you know some people learn from their mistakes, I usually do so um I lost my job again but because the house was 35 k and you’re able to, you know afford that payment so low it’s like after taxes and everything it’s like three hundred and fifty dollars a month this is the mortgage payment so that was my first and then I finally got offered a job in DC, I rented this, I fixed this one out while unemployed and then I rented out when I left to come to DC region to get a new job and that’s when I started looking for the properties under 30k and I found them in Baltimore so that’s the easiest place to go even though i found a lot more since then and so when I went up there there was a house that was held for foreclosure for um thirteen thousand dollars I looked at the neighborhood, neighborhood looked fine i looked at crime reports i went up there and visited its a neighborhood I wouldn’t necessarily live in myself but you know it was, it checked out as far as the crime was concerned and the neighbor, neighbors were fine so I never had anything bad happened I think no one ever stole anything, I didn’t have to worry about that because it was lived in enough and i purchased that one for $13,000 I raided my 401 K so it’s just sitting there I didn’t trust in the market this is after 2006- 2008 I’m being laid off you know there’s like no security I am just done with the stock market and you know being so dependent on employers you know like someone giving me a job so I was burnt at a young age and so it has skewed things so I don’t have a lot of loyalty but it’s also i think has been a benefit because that lack of trust i have in me always having a job and job security meant i had to really hustle, so yeah I had a foreclosure but I was like I’m going to get my real estate investment property. I do not care i am not going to be dependent on everyone, so even if i do one a year by the time I’m 40. I am done I can live off the income I’m getting from it and I’ll find these houses and I’ll fix them up so that one was paid for with my 401k and as I always mentioned you know, there’s different ways you can finance the renovations that one took a little, a lot longer took me a year to do the renovations because it was only my paycheck paying for it so I had to wait a couple a month or two if that’s how much I had to save up and I live very frugally I lived in a one-bedroom apartment I rented out my living room so I’m just saying it can be done if you don’t have a lot of ego in the way and you just have a goal, no ego just a goal rent your room out for a length of time. I don’t do it anymore so you know it’s everything passes but you know that’s what I had to do to save up and get actually you know money so that I can put into the business I mean the real estate investment property and so between lines of credit and my paycheck it took a year but that done I was very happy and I rented it out for $975 a month um so then next I purchased another property this one I haven’t started fixing I’m on the fence it’s in Baltimore too and I’m a little irritated with Baltimore so I might just sell it even though it’s like right across the street from a new school that is being built I might just sell it because it’s so annoying dealing with Baltimore code enforcement it’s amazingly annoying and you know, why do I not have water turned on at this property but i’m paying forty six dollars a month, that’s Baltimore you don’t see this in other parts of the country, so keep that in mind so I don’t know if when invested I even though the rents can be good, so that one was purchased about half a year later once I well once I finished with my first one and I i titled my car so I drive a Honda Civic which are great cars for keeping their values and like you know, I know I advocate using credit but I pay everything off so the only credit I have revolving now is anything that’s being paid for by my houses so i had paid off my car as soon as possible um well what I did for this next house was like, I just I had about 10k in equity. So I used that 10k and i purchased this other property in baltimore for eleven thousand dollars so I’m always telling people pay off your car, pay off your credit card, so you can use them again you know that’s the deal not you keep them high, revolve them, you pay them off and then you use it again. you know I get these lines of credit from wells fargo, home projects pay it off, use it again, pay off, use it again. That’s the beauty of this, okay and so that’s how I purchased that third property and then it comes to my fourth property. I’m in Richmond and this one I actually got a personal loan from the credit union so my credits getting better because I had a foreclosure but I pay everything on time, so outside of that said I lost my job I’m in another place like it’s just I couldn’t afford to keep that up and keep my new place up with no job you know and it’s just not happening but you know, ever since then, you know like i said in my ‘how to get over foreclosure’ you don’t you don’t stop paying on everything, you don’t do bankruptcy, you just keep paying on everything, within a year, you’re starting to get accepted for more lines of credit, after two years, your credit score’s get up to your like 680 or so so once it gets up to there and 690 then you can get a little bit more products to you even though you have a foreclosure as long as you are not home related you don’t have as many restrictions it’s just your credit score and your debt-to-income ratio. So I got a personal loan for this last house so I purchased it for about twenty five thousand dollars and I got a personal loan for 30,000 I use some of the personal loan to pay for some of the renovations so the only thing is, at ten percent rate, but you know, I put it in perspective. I’m like hey, do I not do anything and I wait until my credit 740 and I don’t like that because I don’t know how to get my credit to that high like I you know like it’s such a it’s out of your hands, like waiting for that super top credit is like what mumble jumble else do I have to do other than pay everything off you know I paid everything off and I still have you know I can’t break 700 so I don’t like depending on how high credit score to be able to do everything so I got the personal loan at ten percent, I realized yeah it’s ten percent so it’s higher than a three percent mortgage but the thing is you know it’s sort of interesting because now it’s an unsecured loan so if I default in which I don’t plan on doing they can’t take my house because it’s a personal loan and I was able to get the house on a cheap enough price but they also have a five-year repayment schedule so like the whole payments is about six hundred and some dollars each month but you know with just the one house itself it’s paid off in five years now five years to own a property that’s paying for itself? what’s wrong with that especially if your retirement focuses okay take five years and let the house paid for itself. This is real estate investing this is buy and hold. I could flip it if I want to but I don’t like paying the capital gain tax. and I don’t like flipping because i’m in this for to replace my income not just make a lot of income that i’m paying taxes on so i’m okay with that but you know the because it’s five years and a highest interest rate you know it’s not two hundred dollars a month it’s 600 but you paid off in five years so there’s pros and cons and I’m okay with that you know, third house down and things are looking great, it’s starting to snow ball you know I’m going to pay it off faster. I’m paying it off in two years because the other house that i had in baltimore is starting to pay for itself it already paid for what credit was attached to it and is now paying for this so this works. You know it’s at such a low price so that you know it’s easy and fast to pay off all obligations that you created when you were fixing or renovating or purchasing that house so that is how I do it, its a combination between conventional mortgage and then raiding your 401k, you could title your car at these prices or you can obtain a personal loan they’re not the best but you know I don’t have the best current so I just had to do something, I’m just not someone to let things stop me, so if you’re the same, you don’t let things stop you, you’ll be straight you’ll be fine on accomplishing what you really want to accomplish in real estate investing and the last part, how do you you know I give a lot of advice go look at my website and go under financing to find out different ways to finance but a lot of the renovations were either you know we’re mostly paid for by my salary so every two weeks, I’m saving as much as possible different lines of credit and time. You know sometimes it just took time, time for this to pass, time for my credit to improve, time for me to save up money, time for me to figure something else out so that I have more money so a lot of it, is just you investing your time, investing in your time to get you some type of return or help you in your real estate investing and I don’t say that lightly so keep that in mind. So I that is it for today, thank you for tuning in and don’t forget to sign up for my newsletter and thank you so much. A lot of you guys have been liking and commenting and it’s been fun I really like talking all you guys you guys are sort of kooky its such an interesting mix of people who are watching, who watched the blog and the video blog, so it’s really fun interacting with all of you and so, thank you. Trust that you can do anything and that’s what I like to bring that you know if things aren’t perfect, how do you do it or even if you are perfect how do you navigate going into these working-class neighborhoods and getting these properties. If you’ve never done it before or if you’re new, we can learn from each other so I’d like to get this thing coming,you liking my blogs mean I keep fighting to make sure my voice is heard for other people to hear because not everyone’s perfect and I bring the non imperfect way of real estate investing, use credit cautiously but that is how it can be done I used four different products or different things that everyone has available to them and you use what you’re comfortable with and what you can get. If you guys have great credit you’re 18 times ahead of me so it’ll be even easier for you and you don’t have to do it the hard way because of my mistakes that I’ve made makes me have to do things a little harder um so yeah this is lisa phillips with affordable real estate investment.com this is where I give you an honest and practical guide to real estate investing at a price you can afford.Thank you all so so much it’s been fun and great. Thank you

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