All Forum Posts by: Brian Smith

I don't know your market, maybe it's a crazy hot area, but isn't this taking advantage of your client? Sounds like a business model that would make more enemies than friends in the long run. 

I just sent out my first round of 500 mailers (for personal buy and holds) and made sure to get a PO Box for a year. It was $70 for the box and I think it was worth it for the peace of mind. I'm also interested to know what kind of lead/conversion rates to expect from multifamily as I'm thinking I'll send to absentee multifamily next? Love to hear from an experienced direct mailer... 

Satin or even semi gloss works well on the walls. You can wipe off some stains without discoloring the wall. It's not as pretty as flat, but it's sure to save some time and money during  turnovers. I use a gray/beige (it's actually called "Gracious Greige") satin finish on the walls, ceiling white, and ultra/extra white gloss for trim. Same song and dance with every property.  

So I am meeting with the commercial division of my local bank tomorrow. They have done my last three conventional loans, and with my primary residence I am at the limit for 20% down easy money.  My loan officer said they can do more conventional loans (these will be number's 5-10), but they will require 30% down moving forward. So I figured I should pursue the commercial/portfolio loan route for more favorable terms and now I'm second guessing it and here's my reasoning; I'm almost positive this bank (or any others for that matter) will have a max term 5 year balloon. That scares me. What if interest rates climb back up from historic low levels? And if/when they do how much is my 60k house worth? 50k, 40k? Who knows?  So why not lock in a 30 year conventional loan at 4.5% with forced equity of 30% even if it means I'll have to move a little slower.  Outside of real estate investments we are a strict Dave Ramsey no debt household so this decision seems counter intuitive to everything we've worked so hard to accomplish.  I'm wanting to invest in a rental portfolio that will allow me total financial freedom in 5-8 years, which I know will require an aggressive acquisition rate. Decisions decisions... What are your thoughts on leverage and adjustable rates? Thanks in advance for any input!

I would suggest paying off the lowest debt amount first, then when that one is done you've got debt you can physically check off the list FOREVER. That gives you both rental victory and firepower to tackle the next biggest debt, and so on. Yes, the highest interest rate makes more sense financially, but it's bad habits that got you into this mess and you need good habits to get out of it. Don't try to outsmart your debt or take the easy way out... attack it. 

Same experience with my first lower income property and using smart move. It comes with the class of renters and it sounds like you're doing everything right. It took me a month and a half to find tenants as well. Don't give up the right people will come along. There's a reason they disappear before/during the background check and I bet it's not from lack of internet access! As Joe Dirt would say "You just gotta keep on keepin' on." 

in my experience so far I have been using conventional loans and my debt to to income ratio is fine. The most my broker wants to see (and I assume industry standard) is .45 -my payments are $305/month which includes tax and insurance. My monthly rent is $925. Another standard seems to be 70% of rent is what they calculate for the income portion of the ratio. So, .7 X 925 = 647.5 and 305 / 647.5 = .47 is the DTI from this particular property. If .45 is the limit and my personal finances are in order then by my calculations I should continually approach the upper limit without ever reaching it. Rental income can help DTI more than hurt if the properties are right. Good luck and don't give up.

What a difference on those cabinets! Looks great! 

Is $600 the expected market rent on both units? If the answer is yes and the rents can't be raised then the answer is WALK. If you add in 20k in rehab, lawn, snow, any common utilities, and 2 kitchens... seems like a daunting task to make those numbers work. If rents can be raised with a decent rehab then maybe so. Don't try to force these numbers to work if they don't, because another deal will come around and maybe passing on this deal IS the lesson you're needing to learn on this property. Every property is a chance to learn even if it means passing it up.  Just my .02

The example deal is not a good deal! Unless it is in a really hot market and has a chance for some crazy apprecition no investor in my area would touch that. Where's the vacancy, repair costs, and capex? Look up the 50% rule that's what most investors will be judging cash flow off of.