All Forum Posts by: Brenden Mitchum

Hey @Drew Steusloff!

Here is my short list of things that I looked at when analyzing markets, which eventually landed me on Atlanta. These are definitely not the only factors you want to look at but I believe this will get you started.

1. Population over 100k

2. .5% or more year-over-year (YOY) population growth

3. 1% or more YOY median household income

4. 2% or more YOY job growth

5. 2.5% or more YOY median home value

6. Decreasing crime index

There are plenty of good sites to do your research, like data usa, city-data, best places, neighborhood scout. But these do only provide fairly broad scopes. To really focus in on submarkets within an MSA, your best bet is to get boots on the ground. This can be through actually driving the neighborhoods yourself or you can speak with Realtors and property managers that specialize in these areas. When it comes to rent comps, rentometer is pretty good for this. You can also ask your agent to provide you with rental comps. Same goes for sales comps. 

I hope this helped a bit. Feel free to shoot me a message if you have other questions or want to discuss market research further!

Hey @Andrew Bissada

I think you may be focusing on the wrong thing here. You should definitely shop lenders but not just based on rates. All things being equal, if one lender offers a better rate than another go with that one. However, there are so many more important factors here, such as how willing they are to help. If they have a lot on their plate or just don't really care, then you might find yourself in a situation where you lose a deal because they could not get the work done in time for closing. I'd happily pay a higher rate if the lender is reliable and easy to work with.

What you should be thinking about is simply who is willing to help you and answer your questions. If they keep pushing you to fill out an app without answering some questions then you probably want to cross that lender off your list. But, from what I understand, they can't really give you an exact rate until you fill out the application because it depends on the borrower, not the lender. Don't be afraid to fill out an application with a lender who has been really helpful and patient but does not want to give you an inaccurate estimate. 

As a side-note: Keep in mind, any hard credit checks within 45 days (I think this is the right number but you'll want to verify) of the first one won't count. So within a 45 day period from that first hard check you can get as many as you want and only one will show on your credit score. So aside from the time investment, there's not much downside to getting pre-approval from multiple lenders.

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

Hey @Darren Chang

Okay, so if you refinance your cash flow will be negative? Then, if home values plummet you will be stuck with a negative cash flowing property that is underwater.. 

I would say this is a no-brainer, but hopefully someone will hop in with a counter-argument. I do not think you should ever refinance and rent out if you will have negative cash flow. That is not an investment, it's a liability. I also would never invest for appreciation alone because then I might as well invest in the stock market - at least then I can distribute my risk a bit more. 

No capital gains tax is further reason you should sell the property because you don't even have to worry about a 1031 exchange. This is the route I would choose.

Hopefully this helps a bit but don't just sell because some guy on the internet told you it was a good idea. Sit down and run the numbers on both situations and decide what works best for you and your family.

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

Hey @Shane Davis

Yes, this is what a loan broker is for. They will shop around to different lenders for you to find the best rates and terms. Keep in mind it's not just the rate that matters so even if you could quickly compare rates like you can with insurance policies, this would not be very helpful. So your best bet is to find yourself a good loan broker. Ask seasoned investors in your area - chances are you'll quickly find multiple.

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

Hey @Daniel Herrera, welcome to the BP community!

That is an interesting strategy, basically a BRRRR but without the "Rehab." Most banks will require some kind of seasoning period so your best bet would be to speak with a few lenders and maybe a broker regarding this to see what your options are. You might also want to speak with a local credit union that keeps their loans in-house.

P.s. $50k for a duplex in good shape sounds like a dream!

If you have other questions or just want to chat, please reach out anytime!

Hey @Alex Pham, welcome to the BP community

Sounds like you and your wife will soon have a solid setup to build a massive real estate portfolio. With your wife's pharma income and your time, you should be able to grow your business faster than most. That is, of course, if she is 100% on board. If not, getting her on board would be the first step!

Anyways, happy to help a fellow ATLien in any way I can. So if you ever have any questions or just want to chat about the Atlanta market, message me anytime. 

@Meron Gashu

I agree with @Rachel H., if there is no demand to fill those vacancies then any further analysis is a waste of your time. Call other parks in the area and ask if they have availability. This is a quick and easy way to gauge the market. Another way, which is a bit controversial, is to post a test add on Facebook and Craigslist to see how much interest there would be in filling those vacancies.

If you learn that there is demand for mobile home living in your area, you can then continue on to your analysis. You'll want to calculate with the current numbers and also look at how much value you will be able to add after purchasing. I do not see whether the homes are park owned or tenant owned but only use the lot rent in your NOI calculations (adding bill-back income here is fine too). For your expected value-add, make sure you calculate the difference between how much it will cost to get new homes in the park versus how much income you will receive. Remember to cap this income to see how much value you are actually adding to the park. Keep in mind, finding 43 homes and tenants to purchase these homes will not be an easy task (even with strong demand).

If you have other questions or just want to chat about MHPs, please feel free to reach out any time!

@Mason Kimball

Yeah, reading is big for me man. I feel that unless you're out there doing, you should be learning through the experiences of others and reading is a great way to do that. 

Try setting aside an hour in the morning and/or at night?

Hey @Carey Lynch

As an investor and REALTOR®, I can tell you that it really depends on your specific situation. If you have the time to spend on getting your license, it may be worthwhile. Like anything else in real estate, it just comes down to the math. If getting your license will cost you x (for me about $1000) with another y ($500 for me) every year following, how many deals would you need to close for this to make sense? Probably just one/year, whether it's your own deal or someone else's. 

However, if you already have a full-time job or are a full-time investor, perhaps your time is worth more doing what you already do? If you already have a rockstar agent, or if you find most of your deals off-market, getting your license is probably not worth it. 

So without fully understanding your situation, it is not possible to entirely recommend one direction or the other. 

That being said, feel free to reach out anytime if you want to chat about your particular situation and what might be the best course of action for you. 

Hey @Bill Natlo, welcome to the BP community!

I'm sorry to hear you were laid off but I'm betting this will end up being a blessing in disguise!

Sounds like you have the most important character trait when it comes to getting into real estate investing: CONFIDENCE. Of course, there is such thing as over confidence and this paired with a lack of education can get you into trouble.

So, these 12 potential properties, have you fully analyzed them yet? Are you confident in your analysis? How did you get your numbers for ARV and rehab? Are you taking into account all expenses? If you're unsure or have any questions regarding deal analysis, feel free to reach out and we can walk through one of them together.

Now, let's talk about financing. Without a job, getting a hard money loan or any kind of short-term loan is probably not a good idea. What are you going to do in 12 months when the loan is called due? You won't be able to refinance to pay off that loan and will quickly find yourself in a tough position. Do you have a significant other with a full-time job? As long as they are on the loan application with you, you should be able to qualify for that refi. If not, you will need to find a cosigner. Your other option is to find a partner who can run the refinance because even if you get all private money, you will still want to refinance the deal after rehab to pay off that private money. 

So maybe taking a step back from the cliff for a brief moment is a good idea. Get your ducks in a row, and then jump!

Please, feel free to reach out to me anytime if you have questions or just want to chat.