All Forum Posts by: Cassi Justiz

Hey @Josh Darley, 

This is really going to depend on the type of loan that you are getting and the lender. Many commercial lenders are able to accept pics or scope of work to appraise "as completed." However, most conventional lenders will not allow this. If the fixtures you are referring to are plumbing or light fixtures then the appraiser legitimately would not be able to say that he was able to verify it had functioning plumbing and electrical systems. It is most likely less about the grout and more likely about whatever fixtures were not installed preventing him from being able to call it completed. Having fully functional plumbing and electrical systems are an absolute requirement for most lenders to do a cash out refi. 

Some lenders can be pretty strict with their cash out refi process because of people trying to scam the system. We've run into some underwriters that specifically require a final in personal appraisal to verify that ALL work was completed and the home meets their refi standards. 

I would just call this a lesson and pay the fee. OKC is small enough that there's a good chance you may have the same appraiser on a future deal. There's a pretty small pool of appraisers that do the majority of the cash out refi appraisals. 

In the future, I wouldn't personally allow an appraiser to schedule anything until the house is TOTALLY move in ready (cleaned, landscaped, etc). Contractors have a tendency to over estimate what they can accomplish in a day or two. Until you do a final walkthrough, never assume things are done. 

I would consult an attorney on this one.
I would assume you could issue a "cure or quit" notice as you would with any lease violation. BUT since it is medical marijuana and that could lean into the disability/fair housing world I would want to make sure and have everything reviewed by an attorney. 

Moving forward, I would add an addendum to your lease to specifically address issues like this. I've seen a lot of people start adding things to say that plants can not be grown inside the home. There are a lot of issues that can come up from growing plants inside the home, so most landlords are just saying no smoking and no growing inside the house. 

Hey @Andy Cheng, 

I've had a few clients that were not US citizens that were able purchase with regular conventional loans. However, they were living and working in Oklahoma at the time of purchase. One issue we've run into is when the income is not US based, lenders have a hard time using it to qualify for lending. 

 I'd recommend calling a few local lenders in the part of Oklahoma you plan to purchase in. They can look at your income and let you know if conventional lending will be an option for you. If you need recommendations, just let me know! I'd be happy to send you a few lenders to reach out to. 

Congratulations!! A 90 day challenge in 2017 was what really kicked off my investing. 

I personally use Buildium for my PM software. It's a little more expensive and more robust than what most people will probably need. I started on this, so I have chosen to stick with it and not try to switch everything over. 

Cozy.co was really popular but recently was acquired by Apartments.com. I haven't personally used it since the change, but a lot of people are really unhappy with it. 

Tenantcloud is supposed to be great, but again I'm on buidlium so I can't really speak to it from experience. I know it's quite a bit more affordable than buildium but supposedly has better usability compared to the new apartments.com version of Cozy. 

Good luck! 

Congratulations on the deal! I love Midwest City. That's where the majority of my rentals are. 

I think the pickleball court is a great idea! (That is my husband's new favorite sport. Lol.) It's becoming super popular around here. There's a pickleball bar/restaurant in NW OKC and their courts are consistently booked out several weeks in advance.  

I do agree that B class is probably the higher end of what you can push in that market. There are a few A class apartments in the general area that cater to the military crowd at Tinker, but it would be really hard to compete with the cool new construction apartments. I think shooting to become a solid B class apartment is a great place to position yourself. 

A few thoughts - 

4.8% is a pretty solid rate in the grand scheme of things. That's about what we're seeing for commercial lending right now. (I have some conventional loans from a few years ago that are higher than that). If it's locked in on a 30 year note, I wouldn't stress out too much about that rate. You always have the potential to refinance down the road if you have the option to get a lower rate. 

You also could do a HELOC or personal loan for just the renovation piece. That would get your monthly payment on the property down a little bit, but I don't know that the loan would have a lower interest rate. You'll also probably have a shorter loan term, but it's an option to consider. It might save you some fees/closing costs.

The biggest downside of an actual 203k loan is the red tape. I've been told that it's a pretty time consuming process to get the rehab portion of the loan approved. You might verify with your lender what that will actually look like. If it's a commercial rehab loan, it's usually an easier process with a lot less oversight.

If it's a true 203k loan, I'd probably try to go conventional and get a separate unsecured loan or HELOC for the rehab portion. If it's a commercial rehab loan that is more flexible on the rehab process, then I think that's totally reasonable to go for the rehab loan.

Good luck!  

@J Flood, for sure. The "1% Rule" homes that we were picking up in late 2019/early 2020 are about .8% deals now. Rents have gone up, but home values and buyer competition have gone up more. 

Hey @Simond Wong, 

Congratulations on digging into the OKC market. It's a little more competitive than it used to be but it's still a great place to invest. I can give you a little bit of insight from what I've seen both on our own deals from this year and some deals we've helped our clients purchase. 

In general, what we are seeing is that your properties under 120k are being picked up for about 8-10% cash on cash returns after factoring in PM and setting aside a bit for maintenance and repairs. I'd say on average most people are running PM+reserves around 25% of monthly rents. These are your "c class" properties. Usually 2/1s or 3/1s, pre 1960s homes. 

Properties in the 150k-225k range are hitting around 6-8% cash on cash. These are typically going higher over list price because most of them are being hit by investors (both cash investors and traditional financing investors) and owner occupants. In this price range we're consistently seeing offers at least 5-10k over list price, with the offers being written as-is and buyer being willing to pay the appraisal gap. These are more of your typically "B class" properties. Generally 1970s and newer, 3+ bedrooms, 2 baths, with garage. 

Multifamily are all over the place. If it's a nicer property in a desirable area, we're seeing it top out around 6-8% cash on cash. Some of the lower end properties are hitting 8-10+% cash on cash but these are definitely lower end units. Some of these are cash price around list price with as-is clauses, and some are way over list price. 

Hopefully this is helpful! 

I agree with what the others said. If it's on the market, you don't have much negotiating power at all. We're seeing tons of over asking price, cash, as-is offers even up to the mid 200k range. 

On the buying side, we very rarely offer on something without it being a multiple offer situation. I think in the last few months I can only think of one or two situations where we weren't in a highest and best situation with multiple offers. 

Your negotiating power is going to be in finding deals no one else is looking at. Drive for dollars, go direct to sellers, etc. 

What is your cashflow goals and will this home get close to it? 
If you end up selling the home you be advancing your financial position with the additional cash by investing it into another asset or will it all go into paying off debts?

I was in a similar position a few years ago. I was in the position to sell my primary and net about $40k or keep it and cashflow about $500/month after paying PITI. I decided to keep the property because once I decided that I would not be able to take the net gains from the sale and invest into anything with comparable returns.