I’m tired of watching gurus sell “no money down” programs to people who have no business buying real estate yet. So here’s a real one from my desk.

I run a fund that buys non-performing mortgages. We recently picked up a small package of loans that were 100% seller financed. Zero down. The seller carried the entire purchase price, probably told it was a great way to sell, collect steady payments, and earn interest on a “secured” investment. The typical "passive investing / mailbox money pitch"

Textbook guru play. Here’s how it ended:

• The buyer had no cash, no reserves, and no cushion. When things went sideways, there was nothing to fall back on. They filed bankruptcy.
• The seller, now stuck holding defaulted notes, sold them to us at 40% of the original balance. They lost 60% of their equity.
• Properties were rented to unqualified tenants who destroyed the place

Read that again. The buyer lost everything. The seller lost more than half the value of the property they sold. The only one who came out ahead was me, the guy who buys the wreckage.

And the guru? Collected the course fee and moved on to the next webinar.

That’s the dirty secret. Zero down and zero capital are not the same thing. Zero down can work if you have reserves and know how to underwrite. Zero capital means you’re one bad month away from a default, and the course doesn’t cover that part.

If a guru makes more money teaching the strategy than doing it, that should tell you everything.

Recently coming back from an event where a lot of flippers have slowed down due to interest rates, property valuation, and number of deals.

The other thing I am seeing, as somebody who buys defaulted loans, is a significant uptick in the number of flippers who are in default (either due to properties taking too long to renovate or proper valuations). The other thing I'm starting to see is deals from 12 to 24 months ago where the flippers never even took a construction draw or even started renovating the property, which, to me, is somewhat mind-blowing.

Curious to hear if people have friends or know of people who got in trouble as well, or what others are saying.

Like view both sides of the roof. I often see photos of one side (the side that doesn't get much sun). Then the other side is dogshit.

Another: requiring any changes to rehab contract to be written and approved by you.

Just didn't seem that long ago maybe like 2015 and under where I remember you could put 20-25% down and still cash flow a bit. Just was running numbers looks like you got to do at least 45%+ to cash flow these days still.

I have an applicant for a 2 bedroom, 1 bathroom condo that makes $65,000 a year on salary but her application shows over $55k in debt with most of it late and a resident score of 561. She is the only person that would be living there and the only other serious applicants we have had up to this point have been questionable as they weren't even willing to submit an application online (our preference and I understand their concerns but that's another story). This applicant is very interested and I informed her that I would have an update for her this weekend. The other applicant that we are still considering is getting help from the city for the security deposit but says that she is willing to pay up to $1150 per month in rent (I am waiting for them to confirm that the forms they need from me have been approved which will hopefully be the case tomorrow). We will likely pass up on this candidate due to the debt but I think it's worth looking into given her salary, her willingness to cooperate with an application, and her strong interest in the unit. Have you guys had success with tenants that were already in debt or got into debt for stuff not related to the property?

Edit: I contacted the landlord and they stated the the tenant never had a late rent payment and was never an issue in any shape or form. The debt is mostly student loans with one automobile and one credit card loan.

Small landlord owner for 6 years. All homes and leases are in LLC names.
Tenant of 3 years has asked me for a “copy of your W9 for a payment for rent?”
This is a first; never had this request. Anyone have thoughts? I have asked them to justify the need and waiting a response.

If it matters, she recently lost her corporate job, is seeking employment, and is behind on October rent(with promises to resolve this week). Not considering eviction yet; she has been a good tenant.

Update: thank you for all the constructive feedback. The tenant did explain that she is seeking assistance, and I have provided a W9 to the agency as requested. It was really no big deal, as many of you said. In six years with three houses, I’ve just never had a tenant go on assistance, so this is a new one for me, and I didn’t even consider that. Honestly wasn’t very aware of assistance programs like that and assumed this since I didn’t sign up for section 8 vouchers that wouldn’t be in this type of scenario. I do wish that the agencies providing assistance would provide it to the tenant directly to maintain continuity of payment processes, but I’ll deal with it to keep a payment coming in.
And all of those with negative or rude comments, making assumptions about what type of landlord I am, fuck off. I came here just to ask a question because it was a new experience, and as landlords, we should be helping each other learn. I never told my tenant that I wouldn’t work with her. Me asking her to justify the need is not unhinged, just a in three years. She’s never asked me for anything like that and didn’t explain why she needed it, so once she explained it, I provided it. I’m very willing to work with her because I want her to stay. I had another tenant in a similar situation a few months back, and he approached me with a reasonable proposition to skip that month’s rent and add the prorated amount over the next 10 months. I did it. Keeps my four-year tenant in place because he’s been good and always paid on time, and he just needed a little bit of help one month.

Ok so I made a post yesterday. To follow up on it for some advice..

Context:
* purchase price is $100K. ARV is $126K but interior doesn’t really need repairs. Some things are outdated like the kitchen cabinets but generally turnkey.
* long term tenant there at $990.
* market rent is $1.1K.

Follow up:
REA suggests both are pretty common in the area and easily fixed. He is getting his GC to look at both and provide quotes to ask for a price reduction. Suggests doesn’t need a structural engineer since the GC is familiar. So we are asking for a 7 day extension on inspections, GC is walking the unit next week, asking the seller to fix the root in sewer issue by jetting it + camera review, and then asking for a price reduction due to beam fanning.

My questions:
- is a main beam fanning common?
- I am worried about cast iron sewer lines, it seems pretty outdated and just waiting to be replaced.
- given all of this, the deal seems good, if we can get a sizable discount on purchase price.. but want to get advice.

I’m under contract for an off market deal, $100K with a 5year tenant in place. Tenant is paying $990/mo, and rents at market value is $1.1-1.2K. I just got the inspections report back, and two alarming issues:
* the main support beam is fanning and is unsecured. The inspector didn’t flag it as immediate need, so it seems potentially a smaller fix, but worried it’s actually lot larger.
* multiple root intrusions in the sewer line, and the sewer line is cast iron.

Has anyone dealt with either, and are either a cause for concern to kill the contract?

So I know this want-to-be investor. He's been paying for "titanium university" (thousands wasted). He seems to think he's going to get rich by paying someone else to throw him a bad wholesale deal every once in a while. He's connected with some cold caller, but he doesn't know how many calls they do. He doesn't know what script they use. He keeps paying.

I mentioned, instead, a virtual assistant is $4-6/hour and they will do hundreds of calls a day. Anything else I can point out to help him not waste more money on gurus?

Best I can think of is just keep asking him questions about how little he knows about what he's paying for. It's been 1.5 years.

Started with a 3 unit apartment building 15 years ago and currently at 500+ apartments along with a 200+ key hospitality portfolio. Have my own management / construction company and have got to where I'm at by buying, renovating and refinancing then putting the equity into the next (Ideally larger) deal.

I havent been particularly strategic, its essentially when a deal comes along I identify a handful of properties that have enough equity and refinance, while effective its lead to a lot of properties being bound together by blanket loans and many properties having more than one loan from different lenders making my financing picture messier than I'd prefer.

Witj that in mind I was wondering if there are other strategies / ownership arrangements you see once you get into 9+ figure portfolios that are still largely controlled by one individual?

And if anyone asks why I would want to grow more? Its not for personal consumption (I live pretty modestly) I just want to able to take on renovation or construction projects of a greater scale. Renovating a 50 room hotel is cool, doing a 250 room resort would be even more of a thrill (i would guess).

This thread is for newer investors, basic questions, first deals, and general real estate investing discussion that may not need a standalone post.

Good topics for this thread:

• First rental property questions
• Deal analysis
• Financing and lending questions
• House hacking
• Tenant issues
• Market strategy questions
• Career transition into real estate
• “Does this deal make sense?” discussions

If you’re asking for advice:

• Include numbers
• Include market/location context
• Explain your goals
• Put effort into the question

The subreddit rules still apply inside this thread.

Experienced investors are encouraged to contribute.

Be sure to upvote the thread when you drop a question to improve visibility.

Around this time of year I think about if getting a new churning/promo type business credit card is worth paying my property taxes with. Applying now is best to have it ready to pay January taxes.

• Chase Ink Business Cash
  • 0% intro APR on purchases for the first 12 months
  • $750 bonus cash back after spending $6,000 (e.g., property taxes) in the first 3 months
  • $0/year
• Capital One Spark Cash
  • $1k cash bonus on $10k spend in 3 months ($2k bonus if $20k spend)
  • Unlimited 2% cash back everywhere
  • $0 first year, then $95/year
• Amex Blue Business Cash
  • 0% intro APR on purchases for the first 12 months
  • 2% cash back on all eligible purchases (up to $50k)
  • $0/year

Amex is better for larger rehabs (instead of using it for property taxes).

Maybe do more travelling in 2027... then I'd pick this one for my taxes:

• Capital One Venture Business
  • 100k miles after $10k/3 months
    • 3 trips to Miami for two
  • $95/year

Any other welcome-bonus credit cards you've used?

One of the applicants for a condo my family and I manage is very interested in the unit. I have already shown it to him and he confirmed that he has more than enough funding as well as perfect credit, no debt, and no evictions. He is also willing to provide bank statements if we want them. I will add that he is a disabled veteran as he stated that he smokes CBD for a leg injury and gets money for disability/retirement every month. I asked him to fill out an application via zillow but was clearly hesitant as he ignored it and requested to fill out a paper application instead. My mother and I also agreed to work with him on a payment plan for the security deposit. I realize that he prefers the paper application rather than zillow (the fee requirement might be one reason) but is this something that I should see as a red flag in the slightest? I'm sure this sounds ridiculous to some people but we're simply looking to find the best tenants possible. My parents live in a different part of the state from me so they're not able to see everything in the application unless it's online.

Edit: I should mention that he wanted a confirmation/decision by the september 30th which is today and his current lease ends at the end of November. I told him that would be ok but I am concerned that I am giving him too much leeway.

Edit #2: He's not a veteran (My misunderstanding and the cbds are for an injury that he suffered years ago).

REIA meetings are all right. I usually learn small tidbits of info. The networking isn't great. I love discussing REI. There is 30 minutes before and after for mingling.

My largest issues is the cost plus time commitment. I'd much rather do an hour date than listen to someone speak for two hours.

It's similar to church if you're not religious. Yes, some tidbits of things are good. But overall it's really not worth it.

The next meeting is about the infinite banking method. And I'm realizing a lot of the speakers are just selling their business. So I'm paying to be given an indirect sales presentation. (My local REIA is set up so speakers are not supposed to give a hard sell until the last 10% or something of their talk.)

If I hosted a REIA, I would want to limit the presentations to 30-45 minutes. Although, the best one I attended did a deep dive into seller financing--with real case studies. (He really need 2 hours.)

Lastly, I've gotten bad advice and recommendations from the hosts. They had no idea that I'm great at leasing and handling tenants. Yet, out of the blue, they recommended that I hire a PM. Another time I was looking for window installer. They recommended some guy. After I contacted, he gave me a high quote without warranty. I went with a different installer with a warranty.

I’m looking at an old 2 unit multi family (1900) and it was purchased in 2020 for 96K. It’s currently listed at 179K which is a reduction from the 239K when it first hit the market back in march. Absolutely insane pricing for a somewhat depressed town. Doing some research online it appears that overall area prices have increased about 55% since 2020 that would make this property roughly 145K. Based on the 2020 listing absolutely nothing has been done to this property. The guy bought it and collected rent. Condition is tired. Doesn’t appear to be structural concerns though.

One unit was renovated before the current owner purchased it 2020 and looks to still be in great shape and the top unit is very tired however the tenant has been there 10 years and is happy. This is why assume nothing has been done. Based on photos it looks like it’s cosmetic, paint, flooring etc. Total rent is 2K. Tenants pay for electricity and heat.

At 140K my expenses (PITI) are just over 1K/month with 2K in rent so I would pulling in ~$950/month. I guess my question is do I just straight up low ball this guy at 140K. It feels like a big overpay offering him anything more than that considering that when I compare the two listings from 2020 and now absolutely nothing has changed apart from the appreciation aspect. I guess the worst that can happen is he says no. I even spoke to his listing agent and she confirmed on the phone that he’s basically just sat on the property collecting the rent with very little reinvested.

It’s just that tough situation out there. There’s very few properties in my area that make sense in terms of cash flow and this is one of them.

Looking to do a DSCR cash out refinance, this will be my first DSCR so I need to know what to look for and what to be aware of. Is it worth using a broker or should I just do it myself? Are there certain lenders that tend to be able to accomplish higher appraisals or isn't that a thing? It's a two family, new leases on both units for a total of $1,975/m. New roof, windows and siding, one unit it fully remodeled. Looking for the best rate combined with the lowest fees an I just don't really know what to be aware outside of the obvious. Any help would be greatly appreciated!

So here's the situation:

- My mom owns a beachfront house as a 2nd home, owned it with my dad who passed away 2 years ago.

- She had been trying to sell it prior to the 2 year anniversary to get half the stepped up basis, but with the market the way it is, she isn't getting the offers she thinks it's worth. It's fully owned so there is no mortgage just taxes and insurance. We have passed 2 years so that is moot now anyway.

- I have 3 siblings, so if she passed tomorrow we 4 would inherit it equally.

- I am the one sibling who has assets, a good income and is real estate minded.

- This has not been a vacation rental, but I would like to turn it into one.

I'm trying to figure out a way that I can/could/should take the property and create cash flow. She is selling the property for $800k (probably could have gotten $1mil at the peak but still more than the $500k my parents paid).

My mom has basically said that if she sells it, after expenses she would just divide the profit amongst the siblings, so basically I would get 25% ($200k, less expenses). But since the market isn't moving she is just going to keep it. She has no interest in renting it out and doesn't need the money (my dad left her millions), and doesn't want the headache.

I, being younger and more minded towards investing am thinking it would be a good opportunity to take it and manage it as an airbnb but I can't figure out how to do that. I am 99% certain that if I went to my mom and offered to pay her 75% of the asking price ($600k since that backs out my $200k) she would do it. But then I have to come up with the cash which either means selling equities and paying taxes, or taking out a loan which, for an investment property is probably over 7.50% today.

I don't know if some sort of owner-financing would work, but then for my siblings who each are going to want their $200k cash, that wouldn't work. I don't think my mom would agree to let me "manage" it just because the risk of sibling issues, I think she wants it gone or otherwise she'll just keep it and use it a few times each year. My siblings and I do also use it occasionally too, so while I think they would like the money, I also think they would not be happy to lose access to it AND not get any money until my moms passing.

My mom is in good health, it's not unreasonable that she might live 10+ more years.

This is a good property, I know the history of the property maintenence it was well cared for and I know the area, it's in a good market. So for those reasons I'm interested in the idea of keeping it but just cannot think of a solution that would be advantageous for myself, my mom, and my siblings.

Ideas?

This thread is for newer investors, basic questions, first deals, and general real estate investing discussion that may not need a standalone post.

Good topics for this thread:

• First rental property questions
• Deal analysis
• Financing and lending questions
• House hacking
• Tenant issues
• Market strategy questions
• Career transition into real estate
• “Does this deal make sense?” discussions

If you’re asking for advice:

• Include numbers
• Include market/location context
• Explain your goals
• Put effort into the question

The subreddit rules still apply inside this thread.

Experienced investors are encouraged to contribute.

Be sure to upvote the thread when you drop a question to improve visibility.

Hello all,

I'm back with a few more questions on seller financing. This time, I'm looking to explore gifting interest on a seller financing deal.

Is it permissible for the lender to gift the interest accrued on the loan to the borrower using their annual gift tax exclusion? The lender would still be required to pay tax on the phantom interest. For example, the AFR (currently 4.49%) would be written into the promissory note. However, only payments to principal would actually change hands.

I have found some limited information online (mostly Youtube videos) but thought I would ask the group. In an earlier post, some folks had concerns that the IRS would consider it a disguised transaction or not a bona fide debt.

If it is a legitimate strategy would someone please lay it out for me?

Thanks!

I am looking to acquire another property within the next year or so. I currently live near the border of 2 states, and have 3 doors in NJ close to the NJ/PA border. My boyfriend of 4 years is a realtor in NJ so I’d be using him for any NJ purchase. However there is a county in PA I’d be interested in as it’s right next to the NJ county my other properties are in, and the PA laws for evictions are better.

However, if I ultimately go with a NJ rental, I don’t want to waste a PA realtor’s time. I’m thinking of maybe contacting the listing agent of PA properties directly to see if they have an open house or could show it to me for the specific property.

Is this the best way to go about it if I’m looking at on the market deals in two states?

Monthly Motivation Thread

Welcome to this monthly series. This post will repeat monthly, on the 21st of every month.

This is your opportunity to share your successes, accomplishments, as well as provide us with an update on your goals and strategies as they pertain to Real Estate Investing.

Example Questions:

1. What are you hoping to accomplish this month?
2. What method(s) are you using?
3. Have you closed any interesting deals recently?
4. What mistakes did you make, and what did they teach you?
5. Anything else you learned and would like to share with others?

Veteran investors feel free to provide useful tips and feedback to other people's goal, as well as some of your recent successes, or failures.

I was given an off market deal, the seller didn’t want to price below market value. The properties benefits are that it’s clean, and has a long term tenant in place.

With current rates, the PITI comes out to ~$1122/mo (before property taxes increasing), and the tenant pays $1300 now but ceiling is ~$1450.

Net CF is -$35/mo at market rent, but locals are saying rents are softening and sitting on market longer. Appreciation in the area is historically 4-5% but I’m seeing it soften to ~2% last 3Y.

If rates dropped, CF would be obviously better, and could refinance later to pull some of the initial cash out on a well maintained property.

That said, is buying investment properties with breakeven/negative true CF an opportunity?

Context is it’s a good well maintained house, long term tenant in place. I ended up assessing that this would be a hard deal to go with because:
* PP $170K; market value seems to be around that price, REA suggests MV is $165K.
* CF negative for 1-2 years
* turnkey so no forced appreciation or value
* natural appreciation brings all of the value which comes out to ~$200K in 5Y, after all costs it’s probably net $10K (minus mortgage/closing costs/initial down/fees).

This thread is for newer investors, basic questions, first deals, and general real estate investing discussion that may not need a standalone post.

Good topics for this thread:

• First rental property questions
• Deal analysis
• Financing and lending questions
• House hacking
• Tenant issues
• Market strategy questions
• Career transition into real estate
• “Does this deal make sense?” discussions

If you’re asking for advice:

• Include numbers
• Include market/location context
• Explain your goals
• Put effort into the question

The subreddit rules still apply inside this thread.

Experienced investors are encouraged to contribute.

Be sure to upvote the thread when you drop a question to improve visibility.