How do I know if a rental I want to buy is a good deal?

There are different ways to define what is a “good deal” for a rental but key components will be cash flow, equity and the ability to obtain long term financing. An objective analysis of a prospective rental is critical and should take all of these factors into account. The Plan to Profit in Real Estate seminar will cover all major elements of cash flow, a comparison of various long-term strategies for buy-and-hold investors, a review of financing options and an excel-based analysis tool that every participant will receive after the event.

How do I find a good deal on a rental?

In today’s hot real estate market it can be quite challenging to find a good deal on a rental property. That is one reason the analysis step is so critical – it’s easy to find bad deals! We will discuss various sources for rental properties, how to use data for your local market to determine which neighborhoods are most likely to have cash-flowing rentals and things to look out for in a property that can cost you money in the long run.

I want to use the BRRRR method but how exactly does that work?

Buy-and-hold investors have been using this method for decades without having a catchy name for it. In recent years the folks at Bigger Pockets have popularized the term “BRRRR” meaning Buy, Rehab, Rent, Refinance, Repeat. (Thanks Brandon!) We will do a brief overview of this process and a deeper dive on the two steps (Buy and Refinance) that depend on some form of funding to complete. We will review various options for funding the initial purchase and go into detail on what is necessary for future refinancing. It’s essential to know BEFORE you buy a rental what type of long-term finance options you will have and how quickly you will be able to refinance.

Should I manage my rental myself or use a property manager?

Since this will ultimately be your choice to make it’s important to understand what is involved in doing property management so you can decide which aspects (if any) you want to tackle yourself and which are better handled by someone else. In the analysis phase we will look at cash flow with and without payments to a third-party property manager with a goal to ensure that you can afford to hire out those services if you decide to go that route in the future.

What do I need to do to get someone to lend me money for a flip?

To prepare your “funding package” for a prospective lender you need to develop an analysis of the deal including the scope of the rehab, an estimate of the rehab costs, the planned timeline and the projected profit taking into account all anticipated costs. We will review each of these critical elements that determine if your potential flip has a good chance of success. In addition, you need to include your background and experience. We will also discuss what to include if you are a newer investor with limited personal experience.

How does the “private money lending” process work?

Whether you are planning to borrow from a private money lender or become a private money lender it’s essential to understand the process. In the Plan to Profit in Real Estate seminar we will explain the process including the typical documents used and actions you should always take to mitigate risk. We will also discuss what questions a borrower should ask a lender and what questions a lender should ask a borrower.

How do I set up a self-directed retirement account and use it to invest in real estate?

The first step is understanding what types of retirement accounts can be “self-directed” and the role of the custodian. Just as critical is understanding the rules about disqualified parties and prohibited transactions. We will touch on each of these areas as part of your education related to using an IRA, HSA or Solo 401(k) for investing in real estate. We will also go over use of leverage in retirement accounts, whether it makes sense to own property in a retirement account and why a Solo 401(k) may be better than a ROTH IRA.