My dream is to finish grad school and start a collection of rental properties, is this possible?

Question

I'm going to finish school in the near future. For the past 2 years I have formulated ways to borrow money from lender's that don't credit checks (by then end of school I'll have 30k in loans and TONS of medical bills), just to buy cheap houses.. rehab fast and rent to college students.

How can I do this without having a stellar income? Hard money lenders are few and far that will deal in WV. I'd really like to start/raise our family here. Low crime, excellent schooling and it's very diverse because of the university.

I've met these people that own 100s of rental homes and live in palace's. How do these people start off?

Answer 1

Owing just one or two rental houses is a pain. But that is where you start. Look for a long time and figure out the market. Buy your first one or two with big positive cash flows (the rent has to take care of the payments, taxes, insurance, repairs, and vacancies).

The rest are much easier. When you own ten rent houses and one is vacant you don't really even stress out but when you have one and it is vacant you go nuts.

Answer 2

I started off by finding a friend of my sister's that would owner finance. She charged higher interest but you gotta do what you gotta do to get started. People that do those types of loans often expect you to fail and not be able to pay for a variety of reasons and you lose your down payment and all the work you have put in. Be very careful what you do and really sit down and figure out all the angles. Often you do not make a lot of cash on rentals but are in it for the equity and write off against your other income. It is hard work and requires some back up cash for big repairs and emergencies and don't forget all insurance-that includes liability insurance. When you rent and have people on leases-get very good leases-then that income is considered so that you may borrow because you now have higher income. You just parlay it. If it was simple, everyone would be doing it and living in palaces, so there must be a catch. Rental property is one hassle after another and very time consuming plus you have to deal with irate and unreasonable tenants and the loss when your apartment gets torn up. Most people get out of it right after they get into it. To have any cash flow at all, you really need to be able to do a lot of repairs yourself and have enough rental units per loan so that cash is left over after the mortgage, insurance, taxes, repairs, upkeep, and a slush fund for big repairs like roofs, A/C and heating, vacancies and who knows what else will come up-especially if you are buying older property. Some banks will loan you rehab money but since I have moved to this location-that has become a problem so a bigger city is better for that. I like it but it can make you want to kill. . .
And something I just figured out-my sister now works for an attorney that handles a lot of real estate. They are aware of clients that will make loans on property. Can't hurt to contact real estate lawyers and ask.

Answer 3

There is a program specifically for entrepreneurial minded people like yourself at www.restructureyourmortgage.com
Best of luck.