All Forum Posts by: Brandi Carballo

Find a different lender. Some lenders will do it on an investment property, some won't. Just keep looking. Try going to your local bank or credit union and speaking directly to their loan officer. 

It is definitely possible. Lots of investors do it.

It will depend on your insurance provider's policies. I have State Farm when I purchased a 4 plex to live in one unit and rent out the others. State Farm would only allow me to get an apartment type of home owner's policy, which did not cover my personal belongings. They did cover some belonging's such as tools, lawnmower and office equipment. So yes, I got renter's insurance to cover my personal belongings as well.

Other insurance companies may cover your belongings along with the building. 

You already know that what you are doing isn't working. You have to decide for yourself whether to change your criteria or change your strategy. Maybe a different location, maybe focus on SFR. Don't worry about what other people are doing. Decide what numbers you are comfortable with, what types of properties you want to buy, and where you want to buy. If there is nothing available that meets your criteria then reevaluate your criteria. What you are happy with may make other investors cringe. What works for one person, or in one area may not work for you.

I own several SFR and MFR properties, all rented. I have a 100% occupancy rate at the top of the markets in each area. I bought all but one of my properties right off the MLS. I didn't consider Cap rates when I bought my properties and I don't even know what my ROI is because I don't care about those numbers. I have very little cash into my investments and am very happy with my cashflow. This is what I do full time, and I make a living at it. I do what works for me. I also educate myself. I network with other investors. I read. I listen to podcasts. But that doesn't mean I follow the "standard" formulas.

I've purchased several small apartment deals off the MLS. What Heather said above is good advice on what to look for on the MLS. I've been very happy with what I've bought and felt like I got good deals. In fact, I've got my eye on another property I saw on MLS 3 blocks away from the last one I bought.

I do mostly BRRR deals. I usually refinance everything I have into the house (so in your case $75,000), but never less than that. Sometimes I will finance more and get cash out. I look for LTV anywhere from 70% to 80% depending on how much cash I want to get out, if any. You'll usually get a better interest rate if you finance a lower amount. I have decided not to refi any more properties on a 30 year loan. I currently have four 30 yr loans, but I would like to have any other properties I purchase be paid off earlier so that I can have more cash flow later in life, when I am less likely to want to continue working. My goal now is to refi any BRRR deals into 15 year loans. This also influences what I pay and spend on rehab, as well as if I refinance 70, 75 or 80 percent LTV.

Once you have anywhere from 4 to 10 mortgages you will have a hard time getting a traditional mortgage. You will need a portfolio lender, who will typically have a shorter term loan period. So, for example, you could refi $75,000 for 10 years at 5%, you can usually get the interest amortized over 20 or even 30 years and have a reasonable payment each month, but still only have a 10 year loan period. So you would have a balloon payment due at the end. Most investors will then refi that amount into another loan. Portfolio lenders usually don't want to give out mortgages longer than 10 years, because they don't want to get stuck with a low interest rate if the rates go up. 

You also need to take into consideration ongoing maintenance expenses and property management expenses, as well as expect to have some vacancy and have a reserve for that.

I would request copies of the trust paperwork that shows who the trustee is, and make sure the person you are submitting the offer to is the trustee. Maybe make that a contingency in the offer. A title company should be able to verify that information as well.

I have ductless mini splits in my house. They were here when we bought it, so I'm not sure about the cost, but they work really well. We have a 2700 sq foot house and have 2 mini split units, one in the living room and one in the master bedroom. They both have programmable thermostats. We just set them once and have never touched them again. I love it. My house is always a nice, constant temperature and they work really well for the whole house (at least right now, it is still just fall and we just moved in). 

But in Oregon where I live we have a ton of baseboard heating. 9 of my rental units have baseboard. I hate it. I am slowly replacing the baseboard with in-wall heaters with blowers. They are affordable and work better than baseboards. The last house I lived in had those exclusively and our heating bill was under $100/mo.  Whatever you install make sure there is a programmable thermostat and educate your tenants about leaving it set to a comfortable temperature during the day and a few degrees cooler at night. Turning heaters off and on all day drives up the electric bill.

Google property managers in your area and go to their websites, look at their listings. Pick a listing similar to yours and call the company as a prospective tenant. Ask to see the property.

This will give you an idea of their quality of customer service. Property management companies that provide good customer service to tenants will better retain tenants and also provide you with better service.

When you start doing this you will notice many companies that do not answer their phones, do not return phone calls in a timely manner if at all, don't show up for appointments, show up late and many other problems. Or the person you talk to doesn't know anything about the available properties. Or isn't the person you need to talk to. Or all of the above.

When you do tell them you are looking for a management company ask for a copy of their contract. Ask for an itemized list of any fees you will or may be charged. Ask if they charge for turnover, for providing access to contractors or for anything outside of the flat percentage that they charge each month.

Ask for a sample owner financial report and ask how you will be paid.

Good luck! Most property owners, myself included, can't find a good management company.

I would not be happy with this arrangement at all.

Although I am not particularly happy with my property management company, their billing does make more sense.

They charge 8%. No turnover fees. This includes meeting any contractors or maintenance for access, even to get bids. 

I have never been charged extra for any type of rent collection or anything associated with going to my unit for any reason.

I do think they inflate costs of routine maintenance, which is one reason I don't care for them.

Not illegal or unethical, but also not a good tactic.

I would start at a higher price - $1350 even, then lower it in by $25 every 3 or 4 or 5 days until you start getting calls. 

I live in a market where tenants have a horrible time finding a place to rent, so I always start at least $100 higher than I think I should charge and start lowering the price every 3 days until I get calls. 

If you are getting numerous calls the first day or two it is listed your rent is too low.l