All Forum Posts by: Blake Dailey

@Isaac El Cold calling can beat you down! You will hear so many no's that you might to start to think it is the only word in the world. But then you will hit a YES and it will be worth it. It's all a numbers game! Cold calling usually produces the best response numbers if you are good on the phone, but it is a skill that is built over time and you will get better at it. Keep making the calls, master the follow up and keep pushing. Cold calling is not for the faint of heart but can produce great results. 

All of the above online sources are great tools. You can also call a couple of local property managers and get their opinion on what the units will rent for. They may have more current data if they are actively leasing and turning units, placing new renters in at the current rates. 

I am looking forward to Brian's outlook on the multifamily asset class, thank you for sharing!

@Ron S. I should have explained better. When I sat down with the seller and called the bank this was to assume her current mortgage and the loan back in good standing. She was in pre-foreclosure and my pitch to the bank was to avoid the lengthy, and costly foreclosure process  by letting me get the note back to performing. They sent me their assumption packet to fill out and relied on my personal credit information to take over the mortgage.

For a subject-to deal this would not be necessary and has different paperwork involved. I think it best to notify the lien holder to avoid the due on sale close and be transparent with the transaction, but I know some people don't go that route, just my preference. Sometimes the lien holder doesn't even care as long as the note keeps getting paid.

@Tobey Grey if you owner occupy you should be fine in that regard, as long as your income would cover the mortgage - the lender would then look at your debt to income ration (DTI) aka the amount of total debt you have compared to your income. In this example they look at your credit worthiness as opposed to a commercial rental property loan that may only look at the asset to pay the debt service. I think it would be a good idea to take advantage of the lower interest rates now, but I would also caution about taking on excessive debt right now. So that will just depend on your personal situation and risk tolerance. Like you said, you can always rent rooms to cover the expenses if it comes down to it.

@Alexander Roeschmann I think you have a great point. I think the land of low interest rates may be trending away from us. It’s cyclical in nature and they have been low for a while so I would not be surprised to see them rise soon.

I would think a lender would require you to stabilize the property before lending more on it with a refinance - especially now that lending requirements are tightening up. The property wouldn't be worth any more unless repairs were made, so you will probably want to finish those and get it rented. On rental properties the lender will also look at the debt service coverage ration (DSCR) which is the ratio of the rent to cover the mortgage. So to meet that requirement for a refinance you would need to have the property rented.

Now if you refi'd up to 80% LTV, that is normally the highest a lender will allow you to leverage the property so you would likely not be able to access additional equity with a line of credit. You could either refinance to 80% LTV or take the line of credit up to 80% LTV. If you did both you would also have two sets of fees and opening a line of credit can have similar fees to a refinance, so that could get expensive, especially with home prices in the Bay area.

That has been a concern of mine - I am currently trying to open up a line of credit with a local bank because I feel they may dry up if I wait any longer - lucky for me my local lender has been swamped with SBA loans (it's for good reason so I'm not salty). I have seen other lenders already cut those sources off so I am hoping my lender does not do the same. I also had a discussion with another Panhandle investor this week and he is seeing lenders requiring more down for owner occupied homes and affecting his houses that are on the market. Lending is definitely getting tight but I'm hoping lenders ease the breaks on that if things start to open up soon and we see progress in the right direction with covid.

@Michael Steele happy to help! Wholesaling is a great way to make money with little money when you get started because you can bootstrap it but gets more Involved as you grow to get more consistent deals.

@Michael Steele no worries, there’s a lot to it. What I mean is getting a list from a list providing service, like listsource.com. There you can find potential leads based on specific seller characteristics like behind on mortgage, going through an eviction, back taxes, etc. Then you can tailor your message to the specific crowd you are targeting aka your message to an evicting landlord may be different than your message to someone getting foreclosed on. Then you can test what works by tracking KPIs or Key Performance Indications, aka how many letters you send, your response rate, your close rate, your cost per lead, cost per deal, etc. Scaling wholesaling it is imperative to track your metrics, or KPIs. And you don’t have to buy a list from list source, you can definitely do it driving for dollars, but buying lists is probably the next step to scale.