All Forum Posts by: Christopher Jason Lloyd

Good for you!  A little pain now for wealth and prosperity later.  It goes against the grain as you said, but that is what is needed to be successful in this business.  Keep at it and always be looking to cut those expenses and get more real estate!  Congrats!

P.S. I loved this story, I met my significant other while living in a tiny-home househack as well!  Great and tough memories.  Definitely brought us closer.

It really depends on your skills when it comes to getting your listing agreement signed.  Could take 2 months with luck or incredible sales skills, could take 3 years with bad sales skills.  But I wouldn't be surprised with 6-8 months of consistent 40 hours per week if you're just starting out and you're a very communicative person and can build trust with people.

Hey!  Great Questions,

Like you said, understanding their expectations up front will be the best way to start the relationship.  I have always focused on them, their goals, their abilities and their buy box. There are many different strategies investors use to find what they consider a deal

1. Find out their strategy - How much cash flow/ROI/CAP are they looking for? Don't send a 4 Cap property to someone that only want's 8+ Cap. Quick way to lose your credibility. Some are more focused on location rather than return.

2. Verify proof of funds (you'll be surprised how many investors say "money isn't a problem" until after you have the contract and then it is suddenly a problem). If it's hard money or DSCR, find out the lender and verify they have a working relationship and they have verified funds. If conventional, ask for prequal.

3. Find out if they need a property manager if buy-and-hold - Have referrals ready if your firm doesn't offer this.

4. Find out if they are buying in an LLC or Personal Name, this has to do with financing. They need to have the appropriate financing for how they purchase ready. Sounds like this investor likely already has their ducks in a row with this - if they're buying multiple, you'll likely want to reach out to their lender to find out their DSCR requirements that way you know the parameters you should be looking in for your client. Also, most agents don't know what DSCR loans are, so be prepared to explain to the listing agent. Study up!

5. Find out if they are open to inheriting tenants - If so, are they open to inheriting problem tenants if that is the reason they can get a good deal?  I know investors that want nightmare tenants so they can use that as leverage to "take the pain away from the seller".  Some landlords only want vacant because they are super risk-averse.  If they want to inherit tenants, make sure you bring them a P&L, if the seller is unable to provide one, make the contract contingent on receiving one.  Also consider making the contract contingent on receiving estoppel certificates.  We do that on properties with limited information from the seller.  Some Listing agents/sellers are completely unprepared to sell tenant occupied property with a conveying lease and may just not have all the information because they haven't sold something tenant occupied before.

Honestly, I think Brandon Mulrenin and Ricky Carruth are the best in terms of being realistic with their viewers.  I lean more towards Brandon Mulrenin even though I am not a heavy cold caller.  I focus more on inbound lead generation instead of outbound.  Reason I like Brandon is that he makes it clear that this is not an easy business by any means and you need to put the work in.

Hello BP!

As many of us have heard, the conventional downpayment requirement for primary occupants is going down to 5% November 18th. However, in all this news and excitement, many missed that the FHA (as of 4 days ago) now allows up to 75% of rental income from ADU's as borrower income to qualify for their mortgage as long as it is existing. If the borrower is using an FHA 203k loan, they can use up to 50% of projected income on an ADU they intend to build for their income requirements.

While this is certainly good news in the short term for many to househack, what are your thoughts long term?  I am curious to whether this will further drive up prices on 2-4 unit properties that already make little sense in most markets.  We see with my clients that they are competing against more and more buyers just looking for discounted living compared to their singlefamily options.  Could this further increase the pool of retail buyers just looking to save on their mortgage and drive up prices faster than normal?

Would love to hear your input!  We are already seeing 3-4 units going for way over asking with appraisal guarantees at the current downpayment amounts. By allowing lower downpayments, I am wondering if the buyer pool will start to have even higher appraisal guarantees which will raise the prices of these assets potentially faster than normal. 

Go to a local real estate attorney that is familiar with subject to.  There are many important steps and protections they would be able to guide you on.  Also, since you are an agent looking to purchase this off your client, cover yourself.  In addition to the required agent disclosures for your state, I would go a step further since you are going from contractually representing their best interest (your listing agreement) being the buyer. Since you were just their representative, they could have told you specific information that they would not have disclosed to a buyer and could eventually look back and claim you used that information against them in a negotiation while you were obligated to serve their best interest.  They need to know, you are no longer representing their best interests and you are a licensed professional.

Ensure that your lender and agent are working together as a team.  All my lenders reach out to the listing agent to reinforce how well qualified they are - this surprisingly works well.  Also, my lenders will do a full underwrite and actually care about what they put on the qualification.  They go into so much detail that they can give the seller confidence itll make it to the closing table.  The only way to really compete with the cash offers is this ^^^ make the offer look just as good as cash with a good, local lender.  

Also, the bank you have your qualification from matters too.  Ask your agent if you aren't already working with their preferred lender who it is.  They are referring you because they know lenders that are well respected and can close.  I have had offers accepted simply because we were using a local lender and the competition was using a national bank.

If you are guaranteeing funds, supply a POF for that as well.

Also, your agent needs to know what to say and ask the listing agent.  "Are there any terms outside of price that we can work to accommodate best to make things as good as possible for your seller?"  Sometimes, they could benefit from a rentback but don't advertise that.  Sometimes they want a longer closing, sometimes a shorter.  Back to the lender, we have many say they want a qualification from a local lender.  Sometimes, they'll tell you straight up "if you give us "x" you can have it"

Also, try to be the first offer in.  Some agents work more with the first offer.  We sometimes have more luck with the seller/listing agent working with us more if we are the first one in.  Most properties it doesn't matter as much but some it will

Love the househack, really helps with starting your business when your largest expense is offset by rent, so kudos!! I did the same thing. Study hard and find a good brokerage!

 It absolutely is!! Earlier this year with one of my clients, we were the lowest of three offers with one of my clients and the seller went with us since the lender could say that he fully underwrites his clients and gets them to the closing table every time without fail.  Makes a financing offer look good as cash when presented right by the LO.  The other two bids were $6000 over and $7000 over.  Ours was asking price WITH an inspection contingency

Hey!  Great questions to be asking.  If you have a good support system, that is good to bring up. When I started, I would often show my value in responsiveness coupled with the fact I have a top producing broker at my firm that is my direct trainer.  (this depends on your brokerage setup).  I was able to say that I will out-work any other agent and if there is a question I don't know the answer to, I have an 18 year top producing vet at my fingertips that will pickup my phone call right away 95% of the time, and if she couldn't pickup, she would reach back out every time.  I offered "the drive of a new agent and experience of a top producing veteran."  

Most importantly show them your value with your actions.  It really is about the drive so find out their problem and work to solve it.  Show your clients you care and follow through on that commitment. Be trustworthy and maintain your integrity.