All Forum Posts by: Chris Svendsen

Ok, just a off topic question but who would live in any of their rentals as it sits right now if needed too without a choice of which one it is?  Why or why not?

Reason I ask is curiousity and also my situation.  When wife and I began this venture we went into it with two goals.  First is obviously to make money from this.  Second is to provide a decent place for others to live and raise a family.  All to oftern I kept hearing from others its fine, its just a rental.  Well, if fine, would you live in it?  If not why do you expect others too.  

Recently we had a major career changes and relocation.  We are now forced to live in one of our former rentals as house market sucked when trying to buy, limited inventory and prices stupid high so we moved renters out and we moved in.  Had zero reservations on doing this as was a nice place to live.  Ideal for us, no, but none the less a good home.  

If you answer with no way, I urge you to think about that statement.  Why is it okay for others to live there but not for you and your family?  While I do not make 100k a month on rents, we building a nice little nest egg all the while also provide a good home for others.  If you are not, what is your reasoning?  Is it a strictly profits holding you back from fixing up homes?

 We just like helping others where we can.  It may cost me some money in long run but we can sleep soundly knowing we will gladly move into any of our properties tomorrow if needed.

To me way to little cash flow for that kind of investment plus Condos can screw you bad if there are special assesments or mismanagement of funds.  I have only 4 rentals and bring in almost $2k a month in positive cash flow after expenses.  If was investng in that many units would want at least $2500 a month in cash flow to be comfortable with purchase.

The old tried and true-- networking.  Just talk to people, tell them what you want and put yourself out there.  This got me 1 deal that made us huge profits and another deal that worked out well plus a 3rd deal the seller was practically begging us to buy amd rehab since we did so well with other house they had.  They gave me a month to decide but ultimately I had to turn down.  They sold it a week later to another investor for 100k more than they offered it to me for.  Still kicking myself for that one.  Short story, get to know local people in your area and be honest, friendly and trustworthy person.  Good things seem to find you.

Quote from @Gabriel Hamilton:

Hey BP Community!

I'm scouting properties in upstate New York and found a great duplex. It has an existing long-term tenant in one unit and I plan to STR the second unit. My question is: can I get a second-home loan on a multifamily property?

I've run successful STRs in the past (and currently in other markets), I have a great FICO score, and my W2 income is good, but I've only ever heard of second-home loans on single family rentals. Thanks for your input!

 Someone much smarter than me will chime in but if not planning on using house as a second home you would be committing fraud to get a loan under second home rules.  Might want to check exemptions on the loan before going for that route.

Quote from @Tyler Speelman:

Hey BP,

I received an appraisal back below purchase price and realized appraiser used initial offer and not the accepted counter offer on the appraisal report. Now there is an appraisal gap of 10k. I spoke to lender and he plans to speak to appraiser. Realtor (dual agent) said to ask the lender to speak to appraiser. What would you do?

Thanks in advance,

Tyler

 Sales price and appraised price have no correlation.  Many times appraised value may come in higher or lower than contracted price.  Ideally be great to come in above contracted price or at minimum at contracted price but never a guarantee that it will.  Can either negotiate off purchase to get to appraised value or come up with difference to get deal done.  Good luck hope works out in the end for you.  

Quote from @Ezra Henderson:

My fiancé just started working for the United States Postal Service in the county that I invest in the most, and now all the sudden she’s finding me all these run down and vacant houses… it’s like the ultimate Driving for Dollars scheme! And she gets paid to do it! 🤑

Now I just need to get her a little portable paper shredder so that she can shred all my competitions ‘We Buy Houses’ postcards 😂  

Maybe you can personalize letters per house to get peoples attention being she there all the time.  Kind of an insider track.  Hi this is your mail carrier, I am interested in purchasing your home.....

Radiant heat is great.  Leave it in.  Only reason I would replace if was gonna put in AC and boiler was shot.  Last house we bought for investment had radiant heat.  Once I got it repaired and running, cost about $500 total, house had amazing heat and even temps everywhere.  Was all baseboard radiant then I changed the bathrooms to euro style wall mount radiators due to changing space around and they worked great too.  Keep the radiant if working.  Get boiler serviced and be good to go.

Got our 1st and 2nd deal off MLS. Be persistent, search daily, and be ready to move right now. They are out there just go fast. More may be coming soon so get financing and cash ready to deploy immediately. And lastly, don't give up.

You will need to read you contract with builder but if they were smart they would leave that option open to raise price if cost went up. I am in process of moving into one of my rentals as we making life change and cannot find a place to live where we moving too, thankfully had a rental in area.  Good thing I subscribe to theory if I won't live it it I won't expect others to live in it.  But that said similar to you.  Did not want to live in house but makes most sense.  Had to buy at high point in market as needed to complete a 1031 exchange and now just gonna sit tight until see what happens over next year or two.  Probably best you just plan on moving in unless world goes really crazy.

Doubt you can do a 1031 as you have held less than a year and was not held as an investment, was a flip.  Fed does not look at flips as investments but inventory. Would need to talk to a 1031 exchange professional but that is how it was explained to me.

Looking at your numbers you have $200k into job, you selling price is say $260k.  Take off 5% for agents, that is $13,000, leaving you with $47K after deduct what you put into deal.  Then take out $11280 for uncle Sam and leaves you with $35720 profit.   Assuming you do sell for $260k, only pay 5% agent commissions and have no other unexpected cost to close job.  I would take your profits and look to putting into another house.  If you looking to keep doing flips might want to look for some deals in next few months as thing tighten up.  Having cash on hand could possibly be a good thing soon if foreclosures come onto market soon.  I would personally look for some homes you can make rentals.  Then when market turns can see about flipping them if so inclined.