All Forum Posts by: Clayton Silva

@Josh Hurles @Triston Blodgett, a friend of mine, Willie, hosts a meet up in Stockton every month.  We have had some pretty good size turnout at almost 30 people lately! It's every month at the Panera on Pacific Ave.  The next one is March 25th at 10am.  They usually go an hour and then a lot of us stay another hour or two after as well.  Would love to have you there!

It's about time value of money.  If you are actually a good investor, typically your time returns are going to be significantly higher than a charity.  Look at Warren Buffet for example.  50+% of his wealth was created in the last 10 years of his life.  He is a great investor, but not the best in terms of skill.  What makes him the greatest is his understanding of delayed gratification and time value of money/compounded returns. (He's been in the game the longest). While many investors do give a little bit year over year, the ones who truly understand compounded returns recognize that it's better to give $500k in 20 years than to give 100k today.  But that 100k invested over 20 years could easily be $600k or even $1M.  (In real estate, it could be 5 - 10x that because of levered returns).  At the end of the day everyone is running their own race and knocking their ideas and goals isn't particularly productive.  Give at your own pace and if that isn't your style then give year over year.  Each person has their own time horizon, I wouldn't get distracted by the race others run.

Hey Casey, what about the property is causing it to be non-financeable?  Depending on what needs to be done, you may be able to do an FHA203(k) loan or something along those lines.  We have helped a lot of people get into those kinds of deals before.  Would love to hear more about the property if you want to shoot me a DM!

Hey Jarret, if you do FHA 203k or one of the Fannie Freddie options, it has to be a primary residence where you live in the property for a year. If that is fine, then those are good programs, it's just going to be difficult to find a good contractor who will put up with the slow draw process. If you plan on renting it out right away, you may want to try to find a low down payment bridge/hard money lender to finance the purchase and rehab and then refinance it into some long term debt so you can rent it out immediately.

Hope this helps!

Hey James, having multiple quotes shouldn't be an issue.  I would generally recommend working with a mortgage broker who can do that shopping for you and find multiple USDA quotes!

We offer those. Feel free to shoot me a DM! I have used a lot of our DSCR products myself.

Hey Daniel, really great idea! The only way this would work would be to buy like a grouped townhouse or condo where say the whole building has 16 townhomes/condos on different parcels. A hotel would not qualify for a VA loan even if you sell 4 units or less of it as a time unfortunately.

 Fannie/Freddie provide the minimum requirements for conventional loans but each lender can add overlays or additional guidelines/requirements on top of the Fannie/Freddie ones.  

Yes, some lenders will allow it.  And your second question is: it depends.  Is the return you can generate from the property (with tax benefits, appreciation, loan paydown and cash flow) more than the 7% borrowing rate?  And does this investment make sense for you?  If it does, then it might be worthwhile to pursue!!

For an investment loan, I would typically have the following based on what you put:

Rate: 7.5% (conventional) or 8.5% (DSCR)

Down: 15%-25% depending on Single Family vs Multi Family, or conventional vs DSCR

Vacany: 5% (depending on market). If you have more than 5% vacancy in your market right now, you likely need a new market or you are charging too much in rent

CAPEX: 10-20% (I lump repairs and maintenance into CAPEX and some spreadsheet warrior will probably yell at me in all caps for it) but this number is dependent on the age/condition of the property and I keep a CAPEX max balance. Example, once my CAPEX account gets to $10,000/property (hypothetically) then I would stop contributing to CAPEX and that money would be extra cashflow.

Utilities/trash: $0 pass it to the tenants

MGMT: 8-10% (I use professional management personally, but I know you said you would self manage.) I would still try to underwrite it as if you were going to pay property management, and maybe just pay yourself the management fee, but it gives you the ability to hand it to a manager down the road.

This may not make your analysis make sense which means it may be time to move to a different market or start getting really aggressive with your offers.  Hope this helps a bit though!