All Forum Posts by: Darnell Lockett

 Hi @Myaani Colar. Congratulations on wanting to get your first investment property. The first property is a huge confidence builder. May I ask why you want to buy out of state vs purchasing locally in NY? The ability to have boots on ground and physically look for your first property can help. That and the face to face communication with a local Realtor, Real Estate Attorney, or just some one who can offer you guidance is very valuable imo. After you've made a few local acquisitions and gained experience, then think about buying out of state? Just a thought. Again...congrats on getting started.  

 Hi @Sidney Garcia. Congratulations on getting started. If you're going the 2-4 unit route...you can now use a conventional loan and put down 5%. If you go FHA you may find it harder to find properties that are eligible since FHA has the self-sufficiency test (only applies to 3-4 units). Properties must meet it in order to be eligible. In order to pass the self-sufficiency test, you'll need to prove that 75% of the rental income you're likely to receive will exceed the full monthly mortgage payment. That means calculating both the monthly rental income and the monthly mortgage payments. Here in South Florida, it's almost impossible to find a property that's eligible. You won't have that test with the conventional loan. 

Hi @Angello Campbell. I'm a RE Investor, Real Estate agent and Mortgage Broker, so I hope I can add a different perspective. Experience is the best teacher. Unfortunately you both are new to the multifamily space, so it's a learning curve for the both of you. Ideally, your agent should have the knowledge to help you navigate and find answers to questions that arise. You'll never have every question answered, but when it comes to MF...some shouldn't be left unanswered. I suggest talking with a local RE Attorney that's knowledgeable in leasing contracts to find out what your states requirements are for existing tenant leases. As for questions about potential rent raises, your agent is going to have to be your guide. They should know what your market can support. If they don't, ask them to pair up with an agent that does, and get you what you need. Best wishes! 

Hi @Anupam Banerji. Did you ever get help with your question? It's a commercial property (5 units) so 75% LTV may not be available, especially in this tightening credit environment. Our Lenders are at 70%. You're more than welcome to reach out if you still need help.

Was this a sight unseen purchase @Wendy Stclair? If not...how long were you been in Baltimore before making this acquisition? I think your experience can be a learning experience for those newer investors who don't understand the importance of having boots on the ground for their first purchase. I think that's a very important part of the investing process.

 Agreed @Florencia Cafure. Brickell and the Wynwood district seem to be hot spots right now. 

It's in an area that "should" continue to appreciate. Speculating has never been my thing...ESPECIALLY when negative cashflow is in the equation. 

New investors.....I know it's exciting getting your first deal under your belt. It's important to understand not every deal is right for you. Just because the numbers check out doesn't mean it's always in your best interest to make the acquisition. As I've moved further along in my investing career I've learned that good deals come and go, and great deals are few and far between. Years ago I had to learn the art of patiently waiting for the right deal for ME, doing the analysis..then making a strong offer. Even then, it hasn't always work out. Regardless...patience is a good thing.

 You’re welcome Peter.

As many have stated @Peter Jin, your expected CoC return should probably vary based on multiple factors. It does for me. When I first started out back in the early 90's, I had a set CoC return of 20% no matter where I was buying, the property type or project. That was a huge mistake…to say the least. I had to learn to adjust my numbers based on those factors and more.