All Forum Posts by: Derek Harris

@Riley Billings Rates and DP amount is different for a single family home than it is for 2P-4P. Refer to the Fannie Mae eligibility matrix. Unless you use a local lender. Also, is the $1000 rent for a single family home or fourplex? Rents for a 4BD fourplex unit will be far less than for a 4BR home. There is definitely opportunity in student housing. However, I would inquire with local property managers first to see if they accommodate this. Some will expect all 4 tenants to sign leases at the same time. Others can accommodate rentals by the room. And most will not accommodate room rentals at all.  

Peter, how much does it currently cash flow (after all expenses are taken into account)? If you were to sell it, how much would you net (after commissions, closing costs, rehab costs, etc.)? 

Andrew, if your lender did a hard credit pull then it will negatively affect your credit score.   

Logan, my recommendation is that if you give a low ball offer, I would justify it as much as possible (with projected rehab costs). Be very conservative with your rehab estimates.   

Disclaimer - I'm not an attorney and this is just my opinion. If your roommate is violating the lease, then I would bring it to their attention. I would give them the option to either pay a higher rent or leave. 

@Riley Billings The first thing I would do is underwrite the market. There are many great resources out there that will help you do a market analysis. Look at population trends, employment trends, housing trends, etc. Remember that high cap rates mean high risk. Have you spoken with a lender already? Most larger institutions will require 25% DP for a fourplex. What interest rate did you use? Me personally, I would use between 5-5.25% (before points). Also, I would verify the actual rents for that area. You can accomplish this using either the MLS or talking to a local property manager.

Is this an off market deal?

Maverik, you have to crunch the numbers yourself to see if it is a good deal. I recommend using BP's investment calculator. For buy and hold properties, make sure you account for all expenses (to include prop mgmt). Be conservative with your rehab estimates and ensure you use accurate rents for your area. For flips, you'll more than likely spend more on your rehab. Make sure you account for all costs (closing costs, holding costs, etc.). At the end of the day, is the juice worth the squeeze? 

Joseph, that depends on your risk tolerance and what plans you have for the property in the event it requires a complete rebuild. Even though the value of the house increased, did that affect rebuild costs for your area?

Logan, does the current asking price reflect foundation repair? If not, I recommend getting a quote from 2-3 foundation specialists and using that quote to negotiate a lower price.  

@Greg Hoffman you gotta see things from the agent's perspective. Time is so valuable and if they don't know you professionally or have confidence that you will actually close on a deal, why would they devote their time to you? Some may argue that if agent's want to make money then they should cater to everyone that's interested in their services. Unfortunately, a lot of them don't think that way. A lot of deals can be created off MLS listings, but I would recommend including a different source for your leads.