All Forum Posts by: Brenden Mitchum

Hey @Mithun Bondugula

Do you know any other investors in your area? Ask who they use for financing. If you don't know any, find some here on BP or at a local meetup group. You want to find a good mortgage broker because they will have more flexibility and options than a bank.

Also, what's this about 1% being high for closing costs? In my area, 1% would be incredible, especially for a 203k.

Feel free to message me anytime if you have other questions or just want to chat!

Hey @Dulce Sandoval, welcome to the BP community!

First, you should absolutely speak with your lender about the restrictions and requirements for both conv. and FHA. Yes, both require you to occupy for at least a year. I have been told by lenders that this is not a concrete "law." There is some grey area allowing exceptions for certain special cases. However, I would not play with this because that is a great way to land yourself in prison for mortgage fraud. If you purchase with either of these you should fully plan to live there for a year.

The benefits and restrictions for both are fairly similar from what my lender has told me. Essentially, the FHA is a lower down payment but conventional is lower PMI and if I remember correctly the PMI for conv. goes away after a certain LTV while it never does for FHA. Hopefully, an experienced investor will hop on here soon and give some great advice based on personal experience with each!

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

That's exactly what I'm saying, @Kobe Xin!

If you are not prepared to put in the work and time needed to succeed in this business, then it really does not matter who your broker is. That brokerage is not your babysitter, they are a resource and you should choose the one that is the best resource for you and your goals. Don't worry about the brand.

Hey @Daniel Kierath Jr

Along with the GAREIA groups, you can also find many meet ups on meetup.com and at biggerpockets.com/events. Some will be better than others and some will align more with your goals than others. My recommendation is to just go to as many different ones as you can and start building those networks asap!

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

Yes @Derek Harris nailed it here. Establish that criteria and stick with it. While @Nicole Heasley Beitenman does make a fantastic point that the first deal is very important and the most difficult one, I do still think you need to stick to your criteria. For me, this is especially true since I do not have a ton of capital. I'm not sure if this is the case for you too @Tommy Daggett but there is no way I am putting a significant portion of what little capital I have into a deal that could easily turn into a liability. 

Hey @Jack Gause!

So since DTI is a back end ratio, it does not solely take into account income and mortgage payment (that would be front end). It also takes into account all of your other debts. Do you currently pay rent? Do you have a car payment or student loans? These are debts that the lender factors in. So if you can decrease any of these you can decrease your DTI. Other than that your only option is to increase your income through methods that you have already mentioned.

Now, if you are still not able to increase your DTI, you will have to get creative. I believe some lenders will look at rental income on MF properties. Check with your lender on that. Another option is to find a cosigner, which will dramatically increase the income factor in that DTI (but make sure they do not have a ton of debt or that won't help you).

If none of that works, you'll have to get super creative and step outside the realm of "traditional financing." Could you have found a partner for that deal? If you are networking a ton, you should have or soon have a list of people that you might be able to partner with on a fantastic deal. It does not sound like this deal had much forced appreciation potential but if you find a deal that does you could go the hard money and sell or refinance route. Would the seller of that property have considered carrying the note on all or part of the purchase price? The key here is to have options so that when a deal comes along you do not lose it because you only had one tool in your tool belt and that tool turned out to be the wrong one for the job.

Hope that helped a bit! Please, feel free to message me anytime if you have other questions or just want to chat!

Oh and a quick tip - add a picture to your profile! You'll get more replies.

Hi @Chrissy Gillo, welcome to the BP community!

Let me start with a question: Do you already have a property you are looking at or is $290k-$350k just the typical range in Elizabeth for the type of property you are looking to get? 

There are a couple ways to get around the approval issue here. Your first option is to find a multifamily property and a lender that will count the properties rental income towards your income for the loan (not sure if they do this for FHA so check with your lender). Your second option is to find a cosigner who can add their income to the equation to bump up that qualified price. As far as I know, no FHA lenders will count OT until it can be consistently shown for two years. I could be wrong here but I am pretty sure those two options above are all you have if you are going to qualify for an FHA loan at a price point beyond what you currently qualify for.

Perhaps you can find a property to BRRRR? Then you won't even need to use that FHA loan. Hard money lenders only really care about the asset and your credit.

I hope this helped a bit! Please, feel free to message me anytime if you have other questions or just want to chat!

Hey @Tommy Daggett!

I think you hit the nail on the head there and have given the answer that most investors would give. $56/mo is definitely not enough cash flow, especially if it involves rehab and a refinance. Even if it's turnkey, all it takes is one unexpected event that your reserves can't handle and there goes your cash flow for a year plus. Obviously this is not strictly hypothetical since the numbers are fairly specific so just keep looking. A lot of markets are quite hot right now but it's still better to buy nothing than it is to buy a liability. 

Feel free to message me anytime if you have other questions or just want to chat!

Hey @Spencer Kier!

I am located in Atlanta and can tell you that this market is red hot. This means the competition is pretty crazy at the moment. Any "up-and-coming" area is already swarming with flippers. There are definitely still deals out there but you will be hard-pressed to find something in a B area for $125k that does not need a complete gut job. Also, around here I would not say B is up-and-coming but rather already there. These areas are the hottest right now and I rarely see a "deal" stick around for more than 24 hours. However, if you are looking to invest in the next couple of years and have the time/patience, I highly recommend you have a look at Atlanta. The job growth and diversity here is incredibly strong. 

If you are looking to buy something asap with your criteria, I'd recommend looking into Indy a bit further. From what I hear that is a solid, stable market with decent cash flow and still relatively low prices. 

If you have any questions about the Atlanta market, please feel free to message me anytime!

Hey @Elliot Cash!

As @Bill Hampton mentioned, GA REIA is a good way to get started and they have multiple events in the Atlanta area. You can also find plenty of other meet ups on meetup.com and right here on biggerpockets.com/events. There is a great one (REIGN) coming up right by you on the 18th that I have been to a couple times and highly recommend. 

I have also struggled a bit to find a great agent so my solution was to get my own license. Obviously, this may not work for you so just contact and interview as many as you can until you find the right one. And don't be afraid to drop any that aren't working out!

All I can say about rehab is to read some BP posts and perhaps J. Scott's Estimating Rehab Costs. 

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