All Forum Posts by: Adam Steinbach

Very interesting operating model for a SFR. I haven't heard much about this option, but it sounds like it would be a great way to provide housing and support for the community along with a structured management for the property. Do you run into any issues with NIMBYism with this type of model? Does the city and county provide any supplemental support?

There are photos on the company website.  I wasn't allowed to post the link to photos, but you can find them in my profile.

@Kayla Givens Thanks for the kind words.  Biggest impact we're feeling right now is the cost of labor and materials are still high and with the beginning of a correction we may have to adjust our model sizing slightly to be able to lower the entry price to the market.  We are seeing the increase in rates reflected in the purchasing power of the buyers, so we may start moving to smaller homes in this market to adjust that build and purchase price, at least with the properties that we are currently holding and purchased at the peak of the market.

Investment Info:

Single-family residence other investment.

Purchase price: $420,000
Cash invested: $620,000
Sale price: $1,300,000

Single Family Speculative Development - provided 15% ROI to investors

What made you interested in investing in this type of deal?

Leveraging our team of architects and contractors to provide infill housing that meet the growing demand in the Denver market.

 Agreed.  I wasn't using the self sufficiency factor in my analysis since I assumed I would be living in it for the time being while we rehabbed the property and could cover the mortgage with the current rates.  After the rehab, it shouldn't be a problem meeting this requirement.....  Appreciate the insight and will keep it in mind for future deals.

Hi Lyndsay. Appreciate the suggestions! I will talk to the agent this morning to get that started. The property was a challenge to comp for the FHA appraiser and took almost two weeks to get it comped. Unfortunately, this is a pretty obvious value add property which will need the rehab to meet market rents, so we may have an uphill battle, but it is worth asking.

Hi Erik

I don't qualify for the full amount of the mortgage without the DSCR for the rents. The closest we could get to making it work would be 20% but that makes this property unattainable as a solo purchaser.

I was under contract to purchase a 4 plex through an FHA loan with 3.5% down. My underwriting was complete and I was fully qualified, but the FHA loan was not approved because the rents listed in the appraisal didn't cover the monthly mortgage if I were to not live in the residence. This was intended to be my primary residence and I was intending to rehab the units to meet the premium market rents (the appraisal showed them at about 65% of full market value).

Has anyone found a way around this clause? It seems counterintuitive that I have qualified to cover the mortgage while living in the home, a requirement for the primary residence FHA loan, but now cannot get approved if I were to rent it out (which I'm not supposed to do).

Currently working on ways to salvage the deal and would love some help.