All Forum Posts by: Conrad Legé

@Joe G. This encouraging to hear, Joe. I hear other investors, experienced investors, say stay away from this kind of loan but I think there is clearly value. There is a lot for me to unpack here that I didn't realize about the loan. Thank you for the response.

Can I ask why you say the cash flow is tight? Were the margins tight to begin with when you ran the numbers?

Hello BP community,

I have been in the market for several months now looking for my first small multi-family property and its been a slow process to say the least. Properties are going fast and furiously here in Chicago and every offer I put down has gone under market within days and have gone to "best and highest." 

How does one starting out in this super competitive market close on his first deal? And btw I plan on using an FHA loan. My question is do I continue to look at retail properties on the MLS and play it safe with a more turn key property that won't require any rehab or try to find an off-market deal that is distressed and utilize an 203k loan to force appreciation and create leverage for my future deal(s)?

What do you think?

Hey Ty,

Welcome to BP. I've recently started on this REI journey myself. This is a very good place to find a mentor, however I would suggest that you go to your local REIAs and network, network & network, if you're not already. I'm doing the same and have met so many investors locally who are willing to lend a hand. Just my two cents. I wish you much success in your journey!

Conrad

Question, how are you finding these deals, G? I don't know if its the city I am in or its just the climate right now for the market as a whole, but I can't seem to get my first property under contract.. Did you use traditional methods such as MLS or are you getting off-market deals? Thanks in advance.

Awesome story and super motivating my man. Congrats to you. I am just starting out in my real estate journey and plan to break free from my W-2 job by age 30 and do RE full-time. This just lit a match under me.

Hello BP,

I am in the process of searching for my first multi-family property and have been working with a FHA 203k lender. We had a conversation today and to keep it long story short she stated that I shouldn't expect a property to cash flow when running the numbers for an FHA loan. She pretty much said said unless you are putting 25% down the best you can ask for is to "break even." Is this accurate?

Is this still on the market?

@Mike B. Thank you Mike! And that is terrific advice. That didn’t even cross my mind to ask that.  

@Brie Schmidt McKinley Park, right outside of Bridgeport on southwest side. Sounds good, I’ll plan on doing that. Wish me luck!

Hi BP,

I am currently having my agent write what will be my first offer on a property. This would be a 3-unit which I intend to house hack. The numbers are pretty solid. Looking at $300+ cash flow after budgeting for both maintenance and cap ex. All units are occupied which the leases are expected to end within the next two months. Not really any work that needs to be done from what my untrained eyes can see. Haven't spent much time in the neighborhood, but there is low crime compared to the rest of Chicago and public transportation nearby. Is there anything else that I am missing or should be doing my due diligence on? Or red flags I should I look out for should I make it to the inspection period? Any insight is much appreciated!

Conrad