All Forum Posts by: Derek Dame

I think it is fine with keeping rent under market. I would rather have good tenants that stay than have lots of turnover on market rent. I would recommend increasing rent by maybe $50 and writing a letter that says you value them, want them to stay, and that you are keeping their rent $50 below market because you value them. 

I haven't found the need to get a license...yet. I think there are still good deals to be had without having a license. I have found some. I would recommend you find a good agent to work with and they can send you the deals right away.

Has anyone been able to do this with a Fannie/Freddie underwriting process? I have found this easier to do with portfolio lenders. I haven't done much research on it yet. 

You could use the BRRRR strategy. There are some downfalls to it though. You mentioned that the market is hot right now in Austin. I think that the market could fall all over the US with the rising interest rates. More interest=less buying power. The downfall to BRRRR is that you must be able to refinance the property. You want to make sure you have an "in" with a local bank that can help you refinance when you need too. You will also have to wait at least 6 months to be able to refinance the property. You need to have multiple exit strategies. Can you do a quick sale by discounting ±10% and still make money? Do you know how a decline in Austin would affect the community you are thinking about investing in?

I am not super familiar with all of the rules of the 1031 exchange yet. I do not know how many properties you can buy with the 1031. The strategy I have been using is just buying long term buy and hold property with the capital I have to invest. My bank requires 20-25% down. After 3-4 years I will have enough equity to do a cash out refi and use that for another down payment. Hope this helps.

How about @Jeran Thomson?

No, you will have your payment to the bank for 75%. You then make payments to the owner for the 20% he/she loaned you. The bank has the first position on the lien and the seller has the second. 

@Thomas Barksdale Since this is a 2 family, it is priced just as a single family residence, market demand. The banks don't look as much into how much the rents are on small (1-4 unit) properties. They just look into your personal finances. 

I think December 6th would work. How about you guys?

@Khalin Dendy

@Joe Snustad

@Jared Wall

Is anyone interested in having a meeting yet this month or early December? 

You would take over the $900,000 loan and be responsible for the $100,000 down payment. Make sure the bank is okay with you only having 10% equity in the property. I don't think they will since there is already a loan on the property. I just closed on a similar size MF property. Closing costs were around $10,000. That all depends on what appraisals, home inspections, title search, etc cost.