All Forum Posts by: Jeremy Komer

@Shivam Patel

If you have an FHA in property you want to rent out all of the units you need to refinance that to an investment loan with 75%LTV ratio.

You can't, as far as I've experienced, change the FHA to a conventional then move out since conventional are also for primary residence.

25% LTV is high and in my plan I hope be able to re-use FHA through refinancing every 2-4 years.

Gone are the days of 125% LTV and 80-10-10 loans. The banks are allot more strict now and there is no easy money to just take on leverage rapidly without cash or assets to finance it.

@Russell Brazil

The city average is 3.5% according to government data.

10% is really a worst case scenario.

I am also probably scarred by a terrible PM I had in Columbus that took 5 months to find a renter for a condo.

Since I'm just starting out I do want to be conservative, but am I so conservative that I'm pricing myself out of the market?

I currently budget 20% of the rent to capex and maintenance, 10% to vacancy, and target a 10% cocroi calculated as

Total rent less mortgage payment, vacancy, utilities, maintenance and capex devided by down payment and capital improvements required.

Example

Price $250,000

Down payment $62625

Capital improvements $42000

Utilities per Mo $417

Payment per mo $1337

Rents $3400

Lending Fees/costs $5000

Cocroi 6.84%

Am I being way to conservative in this market?

Seems like allot of people are taking really low rates of return like 4-7% or buying things at the pro-forma value ignoring capital investment needed to achieve that.

Which makes me wonder if I'm being too conservative in trying to find my third property and missing part of the picture. Or everyone else is willing to take on much higher amounts of risk than me right now and I should look for a different asset class to invest in right now.

Is a 10% cocroi too agressive in the market at the moment?

Does anyone know a good painter in Cincinnati?

I have a large job that I want to start in June/July repainting a 2800sqft triplex.

The job I probably big enough to break out the sprayer and I want to time it with removing the cabinets/vanities so they can just hook up the equipment and go.

There is some light other work as well. Removing the wood paneling in a room. Repair some water damage (kilz before paint).

Normally I do my own paint work but this job would take me weeks by myself.

Any suggestions?

@Holly Smith

Who let you do 20%?

The only thing I'm seeing is 25%

I have an opportunity for an off market property in Avondale closer to Xavier university than University of Cincinnati.

Does anyone manage rentals over there?

It seems to be a sort of rough neighborhood but wanted to see if anyone had experience over in that neighborhood.

The numbers are great, but if this is a D class neighborhood I need to adjust for evictions and maintenance being higher than normal.

@Russell Brazil

M1 money supply is definitely going to cause some inflation.

In industrials inflation is already here.

But I don't think we are going to see double digit inflation over a decade because the covid savings most people have will run out after a year.

@Caleb Haynes

Many investors are looking for ways to short the dollar. Especially large institutions.

Currently one of the best ways to short the strength of the US dollar is buy assets at low interest rates.

If you want to maximize your return and you think inflation will rise considerably due to the m1 money supply and printing going on housing is a good bet for that considering the asset usually keeps up with inflation and the leverage might not.

This is one factor that's influenced prices in my area as I've seen large out of state investors buy up dozens of homes or pay over asking because they want 300k in loans at 3% interest.

@Michael Plante

Hello Michael,

Short term I want to have two more cash flowing rentals by the end of the year.

Medium term is to develop $1M in net worth in 10 years (2030)

Long term have enough income from these properties to retire by 50

Hello everyone, for once I actually have more good deals on my plate than I can actually finance.

I feel safe doing 2 because I like to have a solid amount of money to deal with unexpected items like furnaces or water pipes in the other units.

Here are the deals

Deal 1

Owner occupant in up and coming gentrifying neighborhood with allot of nearby development slated for the next couple years, its a 4 family all different bed/bath combinations. Needs a new roof, already have a good estimate that includes removal. Inside needs to have paint and general small updates that will push rents upto the market but not improve equity.

Likely will entail turning the entire building over in the next 6 Months.

numbers below are for renting it out from day one (likely would collect 900 less as an occupant)

DEAL 2

Deal 2 is a commercial property that in a well loved local neighborhood where renovations and flips are very hot.

it requires some work to turn it into a duplex but its location is great and architecture very unique. However the first floor with have to be Airbnb or medium term stays to stay compliant with the zoning and rezoning to fully residential would be unlikely so I am stuck with a commercial loan.

Deal 3

#3 is a neglected duplex in a prime location. rents havent been raised in over a decade and are less than half market rents.

Its been haphazardly patched up through the years cosmetically but the big stuff looks fine. 

will need new kitchen cabinets, appliances, paint, flooring, etc

will also need the current tenants to move out.

my gut tells me 2 and 3 are better investments because of the value add/equity potential but I wanted some other eyes first.