All Forum Posts by: Account Closed

Hi Kyle,

Are you using a realtor to get comps or are you doing your own? If you are performing the comps on your own, double/triple check you are certain about what you want to offer for the home. To touch on the question is it worth it for $218/month, that depends on you. Are you going to miss your downpayment that much or can you afford to take in $218 monthly while gaining equity? Along with this, make sure you calculated all expenses into your formula so you aren't surprised at the end... 

As for the rezoning... What a hassle it seems to be. Have you considered maybe turning the top unit into a 3bd/2ba? Maybe a master-suite upstairs with an office or some sort of recreational room (only suggesting this because a 4bd/2ba do not rent as frequently)? You can legally charge more for that due to the addition of a bathroom and bedroom and you do not have to worry about rezoning...

Let me know if I can be of further assistance.

Best,

Gino

You can use a couple different websites to check crime rates, even using trulia would work-they have a crime tab. You can also use neighborhoodscout or spotcrime.com

If you're getting really serious on a specific property, you could go as far as calling the local precinct for up-to-date crime records. Best of luck.

Gino

@Bryan Vincent sounds like a lot has been going on these past couple months/years. My advice to you, is to find your niche, and to master and excel at it. Do you want to wholesale? Do you want to flip? You seem motivated which is good, even if you can't keep driving for dollars and cold calling during school, stay tuned on the forums and read topics to learn more and more. Best of luck to you!

Gino

@Amaf J.

When checking comps, you can use whatever software or websites you feel comfortable navigating. Zillow is good, there are a couple others, but if you are using a Real Estate Broker/Salesperson to find this property, you can ask them to use the MLS to check property comps and rent comps. @Ben Rutkevitz has suggested a good strategy as well that not many think of, pretend you are going to rent, google homes/apartments for rent and use your criteria (#Bd, #Ba) and see what you come up with. I would suggest, however, to fully utilize the Real Estate Salesperson/Broker for comps and average rents.

To verify all the proforma information, call the respective agencies involved. Insurance, call insurance companies, explain your situation, and get quotes. Same goes for property management, call and request quotes. As far as the taxes, most of the time that information can be found online or by calling the city office.

To touch on the financing part, which I would rather not, nobody will really be able to tell you if you will or will not have issues getting financing besides that specific bank and banker. There are many things that underwriters look at and not being an underwriter I would prefer to leave my opinion out.

Something to keep in mind though, with FHA loans, the law requires that property to be owner occupied or a principle residence, meaning, you have to live there or you will not qualify. However, this does not stop you from purchasing a 2-4 unit property and living in one of the units (Look into 'House Hacking'). Again, I would rather a finance professional touch on the FHA part.

Mention me as needed Amaf!

Gino

Hi Amaf,

First, I would like to address the FHA loan that you mentioned. As far as I know, FHA loans are ONLY available for 1-4 unit properties, otherwise that property is not eligible.

Next, as far as the asking price, you should run comps in your area for that $550,000 price and see if it aligns with other 8-units. Also check to see that the rents, given on the pro-forma, are also standard for your area. Be careful with the cap rate because that is based on 100% occupancy at $1,200 rent. DO NOT forget to account for less than 100% occupancy on your analysis (just for precautionary measures)...

If you are getting really serious with this purchase, verify all the information you can. Call to verify the taxes, trash, management cut (if you are going to use a property manager), etc. Verify all you can on the proforma as soon as possible, you can possible use your new numbers to possible arrange a discount. Get quotes from management companies in that area as well as account for maintenance and repairs (to your liking).

Lastly, account for the expenses you will be incurring before you acquire tenants. Depending on how long getting the units occupied takes, you could be paying out of pocket for a lot of things. Taxes, insurance, etc.

These are just my two cents, if I missed anything, tag me back and I will gladly respond.

Gino 

@Ian Hoover I would completely fine with a 7% ROI, with good tenants and possible appreciation. Can you suggest any other statistics I could look into so I have some reassurance the neighborhood isn't on the decline? I'm not looking to spec invest, just want to have some knowledge that the area is a good area and is looking up. Besides the above mentioned stats, anything you would suggest looking into?

Thanks Ian!

@Scott R. you raise good points, and I appreciate your help. I will look into flipping but I am not entirely sure I will have the cash to finance, but it is worth a shot. As far as cap rates go, you're right when you say as long as I'm successfully house hacking and having some cash flow it is still good. 

Thanks again!

Hi ladies and gentlemen,

I am here requesting some advice from you all to help me finalize this so-called "master plan" I have. So this sort master plan I have is to get started in real estate investing within a year, and for those of you who seen my intro post, I do have some knowledge on the subject and this is the plan I’ve pieced together.

First is to get find a good deal on a multifamily residential, get financing, and move in. For the multifamily house, it will either be duplex, triplex, or fourplex (I prefer the latter to minimize the risk of high vacancy rates). I seek to accomplish this is by being an owner-occupant, and hopefully achieving an FHA loan for little money down, as I am not starting with a huge bankroll.

Next is to ‘househack’ for a few years,

Then either sell and upgrade to either a small multifamily apartment building or keep the property’s cashflow (hopefully there is some, my market is tough - but doable with the right deal) and invest in another residential multifamily with other money.

A few questions and concerns I have though are as follows:

• 1. I live on Long Island and needless to say, the prices for homes are incredibly high. This in turn negatively impacts the cap rates, which are (from what I’ve seen) pretty low. My question is, do I keep my master plan or invest out of state (which can be tougher and I am sure will be) where I will be able to purchase homes for a lot cheaper than here in New York and get a better cap rate?
• 2. Besides the obvious statistics, what do you all look for when investing in NEW (to the investor) neighborhoods? Crime rate, median renter age, etc?

Any input is greatly appreciated. Thank you for taking time to help a future investor out, I’ll be sure to return the favor here on BP!

Best

Gino.