All Forum Posts by: Darnell Lockett

Darnell Lockett has started 4 posts and replied 159 times.

I’d be surprised if they can find a rate at or below 8% right now @Darnell Robinson, especially on a R/T refi. DSCR cash out refi rates are even higher.

0 Votes

Oakland, California

New investors...getting started in Re investing is the easy part. The hard part is staying consistent and learning your craft. No matter if you're wholesaling, fix and flipping or buying and holding, you must be dedicated to doing due diligence in all aspects of your chosen path. It doesn't mean you have to know everything. It does mean being able to understand the fundamentals, and expounding on them.

2 Votes

For the RE investors out there....having your 2-4 unit investment properties in a LLC is NOT a requirement in order to get financing. It's your preference on how you want to hold title. If it's a commercial property...it will be have to be in a LLC.

0 Votes

It's possible to get a DSCR loan for that type of property @Eric Boshart. Keep in mind the LTV will be <=70%.

0 Votes

Fort Worth, Texas

Quote from @Erik W.:

It depends on....
1) How developed is your ability to deal with difficult people?
2) Do you already know your state's landlord/tenant laws?
3) Do you have a list of reliable, honest, hard-working, reasonably priced contractors at least 3 persons "deep"?
4) Do you have a lease ready?
5) Have you established house rules for things like quiet hours, who parks where, whether or not pets are allowed, etc?
6) Do you want fixed rate (smaller units) or variable rate financing (bigger units)?
7) How do you plan to handle pest control?
8) Does your city/municipality have any special laws or regulations that apply to certain number of units insofar as registration, having a business license, etc?
9) What's your pain level? When one tenant calls, eh, not too bad... when 3-4 of them are calling, it gets more interesting.
10) What is your time availability to deal with issues? On that note: are you going to self-manage or hire out management?
There's probably at least another dozen, but that's enough to make this one most critical point: when you go big... you go big or you go home... and there's little time or space to make mistakes. Bigger deals also compound issues. When the tornado rips the roof off your 10-plex, now you have 10 dislocated tenants and need Mr. Big Contractor. If you have a duplex, your handyman can probably cobble something together temporarily.

Larger units also require things like professional lawn care, a cleaning crew, and a part-time/contractor maintenance crew. You and your spouse/significant other won't be able to keep up.

If it were me in your shoes, I'd start small. That's what I did: I started out with one small SFH. Then another. Then a duplex. Then two more duplexes. Then a four plex. Fast forward 18 years... we now own 25 residential units and 29 commercial units. I still self-manage, but I have a contractor team, nice software, and a bundle of knowledge accumulated over 18 years in the trenches.

That said, some folks dive right in and get 300 units. They're impressive. That would kill me. As a wise man said, "Know thyself."

Excellent points. We started small as well and gradually worked our way up.

0 Votes

I've seen this question often here on BP. When you're first starting out as an investor and you want it to be in MF properties, is it better to start with a 2-4 unit or go with something larger such as a 10-12 unit? Imo...a lack of experience is going to come into play. If you're new to investing and want to start in MF, a 2-4 unit is where you're likely to find more success with financing. I can't speak for other lenders, but I don't know any willing to lend on a 10-12 unit property for a new or inexperienced investor (we're not...unless you have a strong sponsor on the deal with you). Get your first 2-4 unit in your portfolio and manage it efficiently. Add another four unit property and do the same. Now you have a more favorable chance of getting financing for that 5-12 unit property.

0 Votes

Lender A is correct. Here's the FHA selling guide https://www.hud.gov/sites/dfiles/OCHCO/documents/4000.1hsgh-...

1 Vote

What gives you that impression that your market doesn't have many investor friendly realtors @Colby Zeller? That said...go to local REI meetings. You'll meet so many Realtors there. SHOW them what you've done, and are trying to do. It's great to use BP or other websites, but if your goal is to use Realtors then you need to get out and actually go talk to them. Go to their offices and ask direct questions. Be specific with your plans and see which Realtors will agree to help you get where you want to go.

3 Votes

Dayton, Ohio