All Forum Posts by: Chris Soignier

You s/b able to qualify, but the underwriters will likely look at your personal balance sheet, income, and credit, and you'll probably be required to personally guarantee the loan.

20% down isn't going to be enough, either.   You'll have to cover closing costs, plus have operating reserves in place at closing.   You might also be required to increase the down payment to 25%.    Don't forget to budget for capex as well, if that's part of the plan to increase the value.   You may be able to get it rolled into the loan, and escrowed to be released as improvements are made.

Yes, it just means the activities of the disregarded entity flow throw to the individual's return.

1) should probably read up to 4 doors, b/c 5 doors is the starting point for what's considered commercial multi-family

2) that's typical in the industry, though you can ofter have longer amortizations.   Most investors don't want to hang on to MF properties that long, anyway.

Jason, I can't opine on the cap rate since real estate markets are local, but I'll tell you that investors would be jumping all over each other for that kind of (legitimate) cap rate in a DFW C or better class property.

You should never rely on a seller's or broker's proforma P&L - make your own estimates, and come up w/ your own P & L and rehab estimates.

Spend $200K on lottery tickets and hope to win mega-millions.   Oh yeah, there's that pesky risk factor which means you may end up with $0.    OK, that's an extreme example, but I used it to highlight that risk and return are highly correlated.   

First, I believe that investing in yourself is always a wise investment, especially if you're lost about what strategy to employ in your target market.     

When you buy, use leverage wisely to max out your returns.     Several low end flips would be more work than a single high end flip, but also less risk.    I really like seller financing and value play apartments (big ones, not the little ones popular on BP), but like any other strategy, you have to know what you're doing.

Perhaps I should have considered it while I was young and single, but several factors stopped me:

- duplex neighborhoods/areas are often C, w/ higher crime and worse schools

- I don't want my tenant being able to walk next door and knock w/ his issues.

- Even my first home was nicer than most duplexes.

Now, w/a wife and kid, forget it.    Putting my son in great schools, and the enjoyment we get out of our custom home, outweighs any potential house hacking benefit.    I do have passive income from several other sources that pays for our housing costs and more.

Decisions such as this are often heavily weighted by subjective factors, and we don't all have the same priorities.

Why would you want to do that?     

So you're at a 7.5% cash-on-cash return, until you throw in maint. and vacancy, and all of a sudden you're losing $27.50 per month.   Also realize your taxes will probably increase sooner rather than later, and your rehab will probably cost more and take longer than expected, esp. if you're managing it from CA.    Sorry, I don't see even the slightest attraction to this home as an investment.   

From a cash flow perspective, you're usually better off buying 2 $100K homes than 1 $200K one.

I know one. ;) Not only do I have experience helping investors find properties, but I'm an investor myself. Rehabs, wholesaling, SFR rentals, seller financing, private lending, and multi-family, I've done it all. I live and prefer to invest in Tarrant County, which includes Fort Worth.

I'd be happy to chat (or meet in person should you be planning to visit DFW soon).