buying rental property | The Kwak Brothers

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Time and time again, I see people choosing to focus either a mortgage or an investment but not both at the same time. But which option is better to start with? In this article, I will show you how you can invest AND pay off your mortgage without the diminishing effects of either process. I want to show you that it’s possible to pay off your mortgage and invest simultaneously. More often than not, such a decision often depends on your financial situation. While many people believe that paying off money is best since it saves on your interest payments, others may want to invest their extra

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Older Posts

September 1, 2020

Buying Rental Property: How I Find the SECRET Opportunities

Buying Rental Property: How I Find the SECRET Opportunities “Daniel……..How do I find real estate deals?” This is a question that I receive the most when I am coaching, giving presentations on real estate investing, or just talking amongst my friends. Now I came up with a quick analogy and I’ll use dating as an example. Now when I say dating, I’m not talking about the “one night stand” type dating, I am talking about looking for a soul mate, someone to spend the rest of your life with. It current times, we have several dating apps available to us BUT is that the best way to find that soul mate? Option 2, you have a friend, that knows you well and has another friend that she knows well too. She sets you two up on a date and BOOM fireworks! Well, I’ve translated this idea into buying rental property. So I believe when it comes to buying rental property, deals are not FOUND…….they are CREATED. In the world of real estate investing there are so many ways to get a deal, but the majority of deals…..are NOT good deals to begin with. But let’s define what a good deal is: 1. I am alone with the seller without having to deal with any type of competition. 2. Genuine real estate problems that I want to solve for them. 3. The seller is willing to collaborate, willing to listen, and really make a good deal. When buying rental properties, many investors will use varying software, sometimes they will reach out to their real estate broker friends, or they will frequent sites like zillow, redfin, craigslist to try and find properties. And that’s A LOT like trying to find the right, life-long partner on one of these dating apps. Going this route when trying to find deals, you will spend a lot of time sifting through some of the bad apples, unfortunately, as opposed to utilizing your friend, who knows you very well. Now that we got the analogies out of the way, let’s talk about HOW I actually find Secret Investment opportunities when buying rental property. I look for local property managers and I build a relationship with them. Who better to have insight on when a property owner is looking to sell? Or better yet, who better to have the insight on how the building is performing financially, vacancy rate, maintenance issues……the list goes on. Buying rental property
September 1, 2020

Buying Rental Properties – The “NO Credit” Strategy

Buying Rental Properties – The “NO Credit” Strategy! There is this illusion of buying rental properties that you need a large sum of money, your credit needs to be high, or prove to the bank that you have a decent net worth to secure a loan. All of which are true! It would require you to get a job, work for a very long time, build up your credit, and save money up for a down payment, which would take years to do. Another way is to use other people’s money (OPM) for buying rental properties, even that would require you to have assets to prove your worth! BUT thankfully, there are ways around the bank for buying rental properties and it’s been a very powerful strategy for us buying rental properties with NO CREDIT. OWNER FINANCING also known as SELLER FINANCING, it’s where the Owner of the rental property you are buying plays the role of the bank. There are several benefits of owner financing for both buyer and seller when buying rental properties. This way, you don’t have to work a job for several years and save a ridiculous amount of money! (benefits of buying rental properties)… Also if you heard of using other people’s money (opm), you would still need to work with a bank to secure a loan, the bank will still want to see your financials to prove your worthiness of the loan since you are the managing partner making it harder when buying rental properties. A huge benefit of seller financing, as you the buyer, you don’t need that great of a credit score, you have nothing to prove to a bank (again great for buying rental properties). Now you are probably wondering if a bank puts you through underwriting to mitigate the risk of lending to you, wouldn’t a property owner do the same when buying their rental property? Yes, but it doesn’t need to involve your credit! In fact, it would be more enticing for the seller to have some type of collateral if you default. For example, if you defaulted on the loan, the seller could take the property back! Now that’s one major form of collateral when buying rental properties!
July 8, 2020

Buying Rental Property: PROVEN Way to Analyzing the Deal

Buying Rental Property THE RIGHT WAY when analyzing deals and running numbers! In this video, we’re going to talk about how to properly break down the numbers when buying rental property. In the recent years, I have gone to several real estate investing seminars (spoke at a few too), real estate investing meetups, and just about any kind of gathering geared towards buying rental property. But one of the things that really makes me scratch my head when attending these seminars/meetups, is the way people break down deals when buying rental property 😲. BUT FEAR NOT, I am here today to show you the PROVEN way to analyze deals when buying rental property!!!!!I do NOT trust a profit and loss statement when buying rental property. And on top of that, I also do NOT trust an offering memorandum provided by brokers/agents/sellers when buying rental property, it may look good, but it’s just highlighting the GOOD stuff and NOT every detail you need to know! So instead of a profit and loss statement/offering memorandum these 3 things is what you will use when buying rental property: 1. Rent Roll: This is a snapshot of current income as represented by the owner of the rental property. Rent roll shows the ACTUAL numbers that the rental property makes in a month. 2. T12 Report: Summarizes the property’s economic performance as defined by the net operating income over the past year. 3. Schedule E/Form 8825: IRS Tax forms used to report income or loss from an investment property. These are the documents that I ask for when looking at buying rental property because it provides HOW the property is actually performing, not just what the seller/agent tells you! So how do we verify that these documents are accurate and up to date when looking at buying rental property? ASK QUESTIONS! For instance, if I look at a Schedule E and see a $15k expense for maintenance, I’ll ask about it, ask the seller to provide pictures or invoices to verify the work! The more I know NOW, the LESS I’ll have to deal with later when buying rental property. The second thing I like to do to verify these documents when buying rental property is to verify through public records online. TAXES will be shown in public record & very important when buying rental property!
June 30, 2020

Buying First Rental Property – HIDDEN Startup Costs to Avoid!

June 9, 2020

Buying Real Estate Without Money or Credit…

One of this things that I found that I am really good at in Real Estate Investing is raising capital, without using my own money or credit. In this video, we are going to talk about the two strategies that I use when buying real estate with out money or credit. The first strategy I am going to talk about is called Subject-To Acquisition, Subject-To Existing Finance, or just Subject-To. The second strategy that I will be speaking about is called Owner Financing or Seller Financing. This is a staple in The Kwak Brothers’ real estate investing strategy. Subject-To Acquisition, Subject-To Existing Financing or Subject-To is one of the tools we’ve used to build our real estate portfolio. It has several benefits when buying real estate without money or credit, for both the seller and buyer. It provides the buyer a chance to acquire a property without borrowing from a bank or even borrowing from an investor because you take ownership of the property without carrying the debt. This strategy is beneficial to the buyer because you can have bad credit and no money but still have a chance of acquiring the property. On the other side, this strategy is beneficial to the seller because if the seller is in a pinch and needs a quick exit from their existing property, you don’t have to go to the trouble of finding a reliable real estate agent. Secondly, since you don’t need a real estate agent to help you sell your property, you avoid extra costs. This strategy also works for multifamily type buildings. Let’s say a landlord is tired of dealing with tenants, running into financial hardships (circa 2008), or the property is vacant and is not cash flowing the way the owner expected. Owner Financing/Seller Financing is another financial tool that we have used in buying real estate without money or credit. This strategy is VERY flexible as far as the terms for acquiring rental properties. And again, similar to seller financing, you can avoid the bank and all of their stringent requirements to secure a loan. Owner/Seller financing is again mutually beneficial for both seller and buyer. It’s beneficial for the seller because, again, no requirement to hire a real estate agent to sell the property, so you can avoid those fees. And a great kicker is also, negating certain tax liabilities once the property is fully depreciated.