All Forum Posts by: Jim D.

Ignore all the current rent, and run your own numbers based on market rents.

It works both way; some owners and agents haven't kept up with market rent and can be well under current market rent.

For conventional loans, the standard amount is 75% LTV for single family, and 70% for 2-4 unit properties.

Also, are you saying that it's currently rented for $2750, but market rent would be more like $3500/month? If that's the case, this could be a great first buy.

Call a lender and see if you will qualify for the conventional HomePossible loan. This is a little-used conventional loan which can be used for owner-occupants on up to 4 unit properties. It's better than FHA loans because it only charges one form of PMI instead of two (FHA loans charge both single premium and monthly PMI). Additionally, the PMI can eventually be dropped without refinancing once you get to 78% LTV (whereas with FHA it stays for the life of the loan). The reason this loan is rarely used is that you have to meet the following conditions:

1. Must be first time homebuyer
2. Must make under the median income for your area (you can look it up on the HomePossible site)

Might be worth a look! 

What items in particular are giving you the most trouble and wearing out?

I self manage three of my properties from out of state and have had no issues. However, they are single family homes in "A" neighborhoods with great tenants. These are houses that rent for over $2500/month, are in great condition, and almost never have turnover, so paying a property manager 8-10% of the rent just seems unnecessary. When there's a maintenance issue, a tenant calls or texts me with a photo and I send the right contractor over to take care of it. Easy. I also have a handyman I trust who does a walk through and basic maintenance checklist of each property every quarter.

I wouldn't try the same with my multifamily properties in lower quality neighborhoods, that would be very difficult.

I got most of the way through this BRRR project, but unfortunately am stuck on the refinance. I purchased the duplex 6 months ago in my name with cash (I am the only one on title), rehabbed it, and rented it out. The problem is that my wife is the one with W-2 income who will be doing the cash out refi, but she is not on the title. I was planning to just add her to the title now in time for the refi, but just found out that doing so will re-start the 6 month waiting period before we can do the cash out.

I can't apply for the loan myself and add her as a co-signer, because my DTI is too high with my other rentals and will prevent us from qualifying together. It seems like my only options are:

1. Quitclaim the deed to my wife and wait another 6 months to do the refi
2. Try to find a portfolio lender who will qualify me (800 credit score, but no W-2 income)

Anyone have any ideas on how to get this refinance done now instead of waiting another 6 months?

I worked in residential solar sales and installation for 5 years. A few thoughts:

1. The old silver-frame, blue panel appearance is ugly. However, most installers now use what we call "black on black" panels which have a very sleek appearance. I think they look great if the installation is well done. See photos below.

2. Panels on the front of a house can be ugly, but it all depends on the style of the house and the layout that's chosen. If they're on the back or a side that's not so visible, it really doesn't matter.

3. To install them, you do drill right through the asphalt shingles, but any reputable installer also installs high quality metal flashing over every penetration to prevent leaking. They don't just caulk the holes. You won't have issues with leaks if they're properly installed.

4. The ROI can be very attractive if you live in an area with good production or high power costs. I have a rental with solar, and I charge the tenants a fixed amount of $100/month for electric (I pay the electric bill which is about $15/month). Also remember you can also depreciate the cost of the system as well for added tax bonus (accelerated deprecation).

That's an odd reaction. My only guess is that they mostly work with owner occupants and are kind of stuck in that mindset. I house hacked in SLC 3 times in 3 years, and I recall once when I was getting a loan, I suggested to the loan officer that we include the $1200/month rent I would be getting from my mother-in-law basement apartment to strengthen my DTI ratio. He told me "no way, don't even mention you're going to be renting out part of the house while you live in it. Underwriters hear anything rental and they assume higher risk." This sounded nuts to me; why would they prefer to lend to me paying the entire $1,900 alone vs me having to only pay $700?

Anyway, you just need to find the right lender and shouldn't have trouble. I'll PM you a recommendation. 

@Gerard J. that one was probably an above average deal, but those are out there if you're patient enough and can offer with cash. The rents and ARV both came in about 10% higher than I expected due to neighborhood appreciation, so some part was just good luck.