All Forum Posts by: Derek Dame

Hey everyone! Hope your summer has been going well. It sure seems like it has flown by! I was reaching out to see if anyone is interested in having a meeting in August or September? It would be good to catch up with all of you and see what has been happening. What days work best for everyone? I am busy Tuesdays, but I think almost any other night of the week would work.

It seems you are having issues "guessing" on expenses for the building. I would call up the listing agent and have them provide the prior year expenses and income. They should also be able to provide you with a current rent roll. That will give you the rents.  

As @Eric Marofske said, you will need to secure commercial financing. You will need 25% down payment. 

I always plan for 5% CAPEX and 5% maintenance. This all depends on the condition of the property. You might even need to go as high as 10% each. You will have to determine what a fair cap rate is in your area.

It might be a little tough getting a loan on a property that size from a commercial lender without W-2 income. It is possible, but may be difficult. I would suggest you find a partner that has the W-2 income. I am sure there are plenty of people with income and don't have enough money for a down payment and that keeps them out of the game.

Good luck!

That works for me too.

@Pete Krentz What are your thoughts on the south side of 12th? 

Hi Joe! We would be happy to have you. 

Does anyone oppose meeting December 13 so everyone can make it?

I have not bought any houses that are in forclosure, pre-forclosure, or short sales. I would think you can buy properties with FHA/203k loans. You should give a local bank a call. I always try and stay away from the big banks. I feel that I get much better service out of smaller local banks. You will then have a relationship with them when you want to move into large MF properties. This market is all about who you know.

I think it is a good idea to structure a partnership agreement. 

• What are some key things to consider with an FHA or 203k loans?
  • You must live in the property to utilize these loans. 203k allows you fix up the property as you live there.
• Has anyone done a conventional loan with less than 20% down? Did you have the option to pay the PMI upfront? If so, what did the numbers look like?
  • I did a conventional with 5% down. I did not have the option to pay PMI upfront. I have heard of others doing it though.
• In the conventional mortgage options, does it have to be owner-occupied like an FHA loan?
  • You can get a "conventional" mortgage and don't have to owner occupy. You pay a higher rate than normal. You also have to have 20% down. I think rates are close to 4.5-5% for investment loans. 
• What type of banks would typically do an FHA or 203k loans or a conventional loan with less than 20% down?
  • Check with local small banks in your area. That is where I have the most luck.
• How can I go about finding banks that have FHA or 203k loans?
  • Same as above
• Would my girlfriend and I be able to put both of our names in the loan or does it have to be in one name if it's an FHA or 203k loan?
  • I am not sure how this works with the FHA. I have bought properties with more than one name on the loan.
• Anything else related these types of financing that I should be aware of or need to educate myself in more?

FHA is a good way to go to get started. You can also look into 203k loans to finance the rehab if applicable. I would try and find a small MF, 1-4 units. You can still use FHA/203k loans. Listen to all the podcast and read as much as you can. You will gain lots of insight on how things work. Also, check out the BiggerPockets UBG. That should help you out a lot with investing.

@Ryan Todd You are welcome! You will also be getting the equity pay down by your tenants in 2+ properties versus only 1.