All Forum Posts by: Ashley Pimsner

Credit unions or portfolio lenders typically will lend 65-70% ltv as long as dcr (debt coverage ratio) is 1.20-1.25 or greater. Blanket loans can be helpful as you only have one payment for all of the properties, however if you choose to sell a property, then you need to replace it with an identical property, which is almost impossible, or go thru the underwriting process all over again. Rates between 4.5-7% with 3,5,10 year balloons with amortizations of 20-25 years. Hope this helps.

If you are a newbie looking to build your real estate empire then buying a multi unit with an FHA loan is a best way to start/ house hack. The loan only requires 3.5% down and if you can qualify for loan based on your dti's ( debt to income ) ratio then there is no need to have renters in place. Live in unit for two years and then buy another multi unit and owner occupy the new property, rent out your old unit, which ideally gives you positive cash flow each month. You can then hold first multi unit for 3 more years and sell it for no capital gain up to 250k for single, or 500k if married. If you decide to keep first unit longer then when you goto sell you could do a 1031 exchange to defer taxes. This is a great way to start. Use BP calculator to make sure multi unit cash flows when you move out. Good luck!

I agree with @J Scott that the experience you gained from your flip is worth far more than the $19000-$33000 tuition to attend the Fortune Builders Mastery class offered by Than Merrill. However, I did pay the $200 to attend the 3 day seminar of Fortune Builders hosted by Cole Hatter, and can say without reservation that I completely ripped them off! This seminar is obviously set up to enroll students into the Mastery program but Cole Hatter was a true real estate expert and extremely motivational. The amount and depth of information provided was incredible and this seminar is definitely worth your time. If you take good notes then you can pretty much duplicate their systems or at least have a basic blueprint on how to start your business. The problem with most newbies is that they fail to take action and implement the knowledge that they have gained.

Here is a useful link...

http://nifa.org/downloads/chrismullen.pdf

As a former mortgage broker a rural development loan was the best possible loan available for my clients as you could get 100% financing, PMI rolled into loan, seller paid closing costs, low or no FICO score requirements ( bases on lender overlays ) and great rates!

I have never done a rural development 538, but as most commercial property requires a minimum of 20-30% down payment with a DCR of 1.25, and this program offers 90% financing (97% for non profits ) with 1.15 DCR, it appears that there are many benefits and this is a program with pursuing.

You could set up LLC after cash purchase and transfer investment property to LLC but you may be liable for transfer taxes. Since you would not have a loan you would not be subject to the "due on sales" clause from lender, but if it were me I would purchase property in a land trust and then make the LLC the beneficiary.

Maybe you should consider the free webinar I just signed up for about using a land trust in conjunction with an LLC for ultimate asset protection.

http://webinarmeetingroom.com/webinar/?affiliate=reinvestorsummit&landingpage=default&expiration=default&memberid=9144&webid=305vj3i2ag

No disrespect, but if this is the first time you have utilized the BP calculator ( I personally use a different calculator ), you may not be completely familiar with what to include in your computation. If that's the case, I am sure the BP community would be more than happy to help.

2% rule is available all over if you only consider 3-4 units. I agree it is important to know where property located ( A,B,C class neighborhoods) to input property vacancy numbers.

It might be helpful if @Michael Barbari posted his inputs into BP calculator so we can determine if $432 net is legit.

I am pleased you utilized the calculator as it is critical in evaluating potential deals and a great first step to improving your knowledge.

As I cannot know what numbers you inputed into calculator (garbage in, garbage out) and if you included an H2o expense, or included a management fee of 8-10% even if you intend to self manage, vacancy %, dp, rate, term etc, what I can tell you is that if I simply apply the 2% rule then this would not be a deal for me. 

2% of $160,000 means that you would need rent to be $3200 (vs current $2125) before it became interesting. 

I personally don't look at any deals unless the DCR is 3 > in Chicago, but that is just my individual rule of thumb.

Best of luck and keep us posted.

I hope I don't sound like a broken record, but have you used the calculator on this site to evaluate your deal? Your numbers are just the tip of the iceberg. what do you expect for vacancy, management fee, utilities, waste, capex etc.?  Are you familiar with 2% and 50% rules talked about ad nauseum on BP? Input numbers into BP calculator and familiarize yourself with the rules of thumb mentioned above and you won't have to ask if this is a good deal because you will know for certain. Better to learn to fish...

In my prior post I describe the mechanics of properly assuming a loan... if you would like either coaching, evaluating the deal with a second set of eyes, or help acquiring and negotiating the  delinquent fees then please feel free to reach out to me as I am an investor in Chicago.