All Forum Posts by: Brenden Mitchum

Hey @William Thompson, welcome to the BP community!

I think you are smart to hold off. STRs tend to suffer during downturns and this will be compounded by the avoidance of non-essential travel by many Americans. Plus, I'm guessing like most coastal markets, the one you are looking in is fairly hot at the moment. It is likely at or near its peak in the cycle and will be coming back down, along with the rest of the market. It certainly wouldn't be a terrible idea to see if you can get a great deal in this upcoming change. That being said, who knows when that will actually be but it doesn't hurt to be aware and prepared!

Please, feel free to message me anytime if you have questions or just want to chat!

Hey @Carolyn Boswell, welcome to the BP community!

You'll find some great resources from the one and only J. Scott. Here is a very useful guide to estimating ARV. For estimating rehab costs you can use some rule of thumbs but I would recommend digging into this a little deeper. J. Scott has a book on the topic but in reality this is just something you will get better at as you do more deals. Another thing you can do when starting out is to find a contractor you trust and have them walk through the property with you and provide a quote.

Good luck! And please feel free to message me anytime if you have other questions or just wanna chat!

Hey @John Lutkenhoff, welcome to the BP community!

So sounds like you are definitely suffering from a case of lack of education. Typically, I'd recommend some podcasts and books to get started but it appears you already have a deal and are debating just jumping in. So first I'll ask, what are the numbers? What makes the cap rate "great"? 

I am only just getting into apartment underwriting and although it is not difficult it is a bit complicated. Are you confident in your underwriting? If so, your best bet here is to find a partner for the deal. There are tons of experienced investors out there looking for deals right now. You can meet some here on BP but I'd recommend going to a meet up in your area and chatting with some individuals. Chances are you will find someone interested in the deal if it's a good one. That's my advice because the short answer is no, a bank will not lend to you without experience. You may get lucky with a credit union, but again you will likely not get anything better than a 70 LTV. If you don't have 30% to put down then you will need to find a partner anyways.

@Kai James

My pleasure! I am no stranger to having unanswered questions on here so I completely understand. Please reach out anytime!

@Rose White Thanks for the shout out! And great answer yourself there!

@Garrett T Colburn

My pleasure man! By the way, I have some family over in Owensboro. Any chance you know the Boles family?

Hey @Garrett T Colburn

I know this is not what you want to hear but if your attorney in KY can't help, you definitely need to find yourself a real estate attorney in Indiana that is familiar with subject-to to walk you through the process. 

I have never done one myself so cannot give you a step-by-step but essentially you start paying the mortgage for the seller. They avoid being foreclosed on but the mortgage stays in their name so they are still at risk if you stop paying. Another issue here is that "due on sale" clause, also known as the alienation clause. Essentially, this just means that the lender can call the entire amount due when the title changes owners. From what I hear, this does not happen often but it is something to think about. Keep in mind, the lender just wants their money, they don't want to foreclose so this is the reason they don't typically pull that clause.

There are several investors on here experienced with subject-to and even a great BP podcast on it (episode 70 I think). So maybe you won't find the full answer you're looking for but explore the site and see who seems to know what they're talking about and reach out to them. However, this is still no substitute for getting legal advice.

Please, feel free to message me anytime if you have other questions or just want to chat!

@Karen Margrave

I did a quick google search as I was still a little confused. I have never seen one of these automatic parking garages before, but that is an awesome concept!

Absolutely! I am definitely not saying that self-driving means no parking is needed. I was simply offering that expensive garages in cities will likely become obsolete since people could send their cars out of the city to park elsewhere. However, no one really knows what kind of impact self-driving will have so this is just a posit.

Hey @Kai James, welcome to the BP community!

While not having a w2 will make it tough to get traditional financing there is some good news. 

1. It might be tough but certainly not impossible. You will definitely want to find a rockstar lender to give you your full options. Without knowing much about your situation, I can tell you there are two ways you can qualify for a traditional loan without a w2. The first is by getting a cosigner. This could be a family member, your gf, a close friend, etc. As long as they have a w2, the lender will use that as the income source when underwriting. The second way is to be patient and wait till you have two years of non-w2 job history. Check with your lender for specifics on both of these options.

2. You can certainly invest in real estate without obtaining conventional financing. You can obtain seller financing, hard money, private money (friends and family), and a number of other creative options and combinations. If you want to know more about creative financing, I highly recommend you read Brandon Turner's The Book on Investing in Real Estate with Low and No Money Down.

If you have any other questions or just wanna chat, please message me at anytime!

Hey @Sam Stabler

First, you want to check your local and state landlord/tenant rights. Make sure there is nothing in there that restricts what you can bill tenants for if there is no sub-meter. My answer will assume there is no restrictions.

You could accomplish this through some implementation of a RUBS. Essentially you can split up the utility billing by something like SF occupied and just bill the utility back to the tenants every month for that split. So let's say the detached is 25% of the total SF and the main is 75%. You would just bill the detached tenant for 25% of the utility bill you receive and bill the main tenant for 75%. You can discuss with the tenants about how they feel the split is most fair or you can just implement what you you deem fair, that is your call. You may also want to check what other homes in your area are doing. Maybe rents are higher because most people just factor utilities into the monthly?

Hope this helps and please feel free to message me anytime if you have other questions or just want to chat!

Hey @Brandon Baker! Great to hear you're taking the leap!

I have looked into this exact topic quite a bit since I am also getting started. I have found that the rockstars that you are referred to by other investors do tend to be incredibly busy so are not necessarily that interested in giving a new investor their time. However, I have also gotten many rockstar references that do give me their time. So my advice to you would be to just network like crazy. Ask all the investors you know in your area who they use. Then if you get a rockstar broker (for example) you can ask them who they recommend. Chances are they will know some rockstars themselves. And don't just look for one of each. Get multiple referrals and thoroughly interview each to pick the best. I made the mistake of just going with the first agent that got recommended to me and stopped looking. Then about a month later I realized that was not working out and had to go back to the drawing board so best to get as many potentials as you can, then narrow down to one.