All Forum Posts by: Dwain R.

I am seeking advice on the best companies to open a Self Directed IRA with. I plan to rollover a sum of cash from my Vanguard Roth IRA into a Self Directed Roth. I do plan to continue investing into my vanguard account but would like to deploy some money into real estate deals via a Roth self directed IRA. Any advice on the best companies or houses to use and why would be greatly appreciated!!!

Originally posted by @John Leavelle:

Howdy @Dwain R.

Did you purchase the Quad and SFR together? If so, that required commercial or portfolio financing (5 plus units). Conventional 30 year loans (1 - 4 units) would not apply. Your 8 unit is also a commercial deal. 15 - 20 years is right.

Hello, John. Yes I did purchase them together. So I am sure I would not have been able to get 30 year on those anyways. Or the 8 unit Im under contract on now. However, I have yet to find a bank in my area to do a 30 year finance on a SFR either. So I am just curious how people are getting these and if Im just looking in the wrong places.

I know many will say it’s because for the 8 unit I’m gettin and the 5 unit I have, I have to do portfolio or commercial financing but I can’t get a bank to even do a SFR at 30 AM in my area. 20 is the max I can find. I will say I am being forced to learn quickly. My goal was to have 1 unit this year as this is my first year. I closed on my first deal (5 units) in September, and will be closing on my second (8 units in December). So basically in 4 months time, I will have acquired 13 units.

I really appreciate the comments. I’m still looking for the answers to the questions posted... 1) How and where are people finding 30 year financing on investment properties? This is not an option with any bank I talk to in my area. 2) On the podcast and everywhere else, when people are discussing deal analysis, it’s almost always based on a 30 year Finance. Typically people say after debt service, taxes & Insurance, maintenance and repairs, vacancy, and management, you still want to shoot for $100 a door minimum. But I am assuming this is usually based on a 30 year Finance? So what are the recommended numbers for a 20 year? I actually am under contract for 8 unit deal now. It’s a 2.2% deal, so getting 2.2% of purchase price on monthly rent. After all of those things listed above I am coming out at roughly $100 a door, and this is on a 20 year Finance. I kind of wish people on the podcast would discuss different AM schedules, because it seems like it is ALWAYS 30 and maybe I just haven't looked long and hard enough, but I haven't found a bank willing to do that for Multi Family or SFR.

I have become a regular listener to bigger pockets and I’m a new real estate investor. I closed on my first deal in September (Quadplex and a House) and am under contract now for an 8 unit apartment complex.  My goal was 1 unit this year and it seems as if I'm about to have 13.

It seems to me the majority of time people in the podcast are talking about analyzing deals and cash flow and their goals they are basing it on a 30 year Finance. My first question, is: Is it common to find a 30 year Finance on an investment deal? Because in my area, banks will not even consider that! And they typically need board approval to even get 20. They push you hard to go 10-15, but I have been able to secure 20 at least. So how are people finding 30 year Finance deals on investment properties?

Next question....

This also makes a MASSIVE difference when you are analyzing cash flow for properties. I constantly hear on the podcast and elsewhere things such as: take your debt service, taxes & Insurance, maintenance, vacancy, mgmt, and perhaps cap-ex and then shoot for $100 a door after that. This seems to be brought up ALOT on the podcast, but is this typically based on a 30 year Finance? Because when dealing with 15 or 20, that’s much harder to do. Doable but harder.  I just wish shorter financing terms were discussed more because this changes things....

When people talk about the 2% rule, does this change based on Finance term of the property?

It just seems like I do not hear many dealings on the podcast with 15-20 year terms. Just curious....

Thanks!

I have become a regular listener to bigger pockets and I’m a new real estate investor. I closed on my first deal in September (Quadplex and a House) and am under contract now for an 8 unit apartment complex. It seems to me the majority of time people in the podcast are talking about analyzing deals and cash flow and their goals they are basing it on a 30 year Finance. My first question, is: Is it common to find a 30 year Finance on an investment deal? Because in my area, banks will not even consider that! And they typically need board approval to even get 20. They push you hard to go 10-15, but I have been able to secure 20 at least. So how are people finding 30 year Finance deals on investment properties? Next question.... This also makes a MASSIVE difference when you are analyzing cash flow for properties. I hear on the podcast and things I read such as take your debt service, taxes & Insurance, maintenance, vacancy, mgmt, and perhaps cap-ex and then shoot for $100 a door after that. This seems to be brought up ALOT on the podcast, but is this typically based on a 30 year Finance? Because when dealing with 15 or 20, that’s much harder to do. Doable but harder. When people talk about the 2% rule, does this change based on Finance term of the property? It just seems like I do not hear many dealings on the podcast with 15-20 year terms. Just curious....

Thanks to everyone else for the input as well. There are a few other questions I'm facing, but I'll likely just start a new thread for those.

Thanks for the reply Rachel. I did forget to mention he says (but I guess I have no way of really knowing) that he is incredibly handy and could build a house from the ground up. There are some repairs in the home that need to happen so I guess attempting to have him fix one to see how he does is an option? And then if it goes well, have him do more. I see you are from Little Rock. I lived there about 7 years and moved back to Batesville a few years ago when we had children. But I am still there 1-2 days a week as he majority of my business (window cleaning and power washing: commercial, residential and high rise) is there.

Originally posted by @Account Closed:

Hello Dwain,

What kind of employment is this person in?  You have a mortgage on the property?  Will he pay you October 1 for 2 months rent? when is the rent supposed to be due?

Well, he is now looking for a job, according to him.  He was in construction and was working on a chicken house and fell off a roof.  Yes I do, have a mortgage of $632 for the apartments and house combined and my total rent is $1875.  So they cash flow very nicely I think.  Rent is due on the 1st, but late fee after 5th with $5 per day after that.  After 10, I can evict. He says he will pay at the end of the month and knows I expect October's rent at the beginning of Oct, but it seems him coming up with $1,000 is a stretch.  

Hello,

I am from Arkansas. I am about as new of a real-estate investor as you could be. I closed on my very first deal Sep 11th, 2017. I bought a 4 unit Apartment complex, with a unit that was a former salon that could be converted into a 5th unit, a 3 bed 1 bath house, 3 acres of clean land, and a shop (insulated with electricity) for $115,000.

The seller let me collect all of September's rent which was nice. The house, my largest rent, $500, asks me the first day if he could have until the end of the month to pay his rent. He apparently got injured falling off a house working. The seller verified this story is true. He had to be taken to a hospital in Little Rock. So this situation was obviously difficult enough for me to know how to handle. The cake, iced in tragedy...his dad died this past weekend. This is also true.

I would love to know how some of you more experienced investors would handle this scenario. Serious injury and death of father in a couple of weeks time, and I am faced with this within 2 hours of being a landlord! Welcome to the party I guess!

Thanks,

Dwain