All Forum Posts by: Jesse Glatz

When using the property search tool and other criteria for property type, how is it possible to search for 2,3 or 4 unit homes only and not include all single family homes? Choices are only Homes, Condo, Townhome, Co-Op. Surely there is a way to search for multi-unit properties only? I do not want to look at any SFR or single door homes but can't seem to find a way to search by that criteria using any of the BP search functions.

This is great information. I would like to know more about what you mean when you say it won't cash flow on paper and how it would be funded with a negative cash flow. What are the current rates for a bridge or hard money loan? I am still being really cautious about buying a STR since all my experience so far is SFR with long term tenants so I really don't want to jump too far in the deep end and sink. I don't mind a bit of discomfort and risk but perhaps we can toss around some numbers of what I can bring to the table and what kind of risk I am willing to take on a monthly payment basis until the rental process and income is that which trends upwards until its paying for itself and profitable and figure out a property price range from there.

Stephanie,

  That is great information. I truly appreciate it. That would be more than I want to take on at the moment. I just so happened to see another property come up for sale in the same neighborhood for 1.7M, what would be the "quick and dirty" on that one for financials?  That seems like it would be much better for me and has been in the rental pool for quite some time so good rental history there, the 4M one was a primary so I wasn't too sold on that one. I really want to move quickly on something before the season really starts to pop off there. 

These are some very good replies here and great information! I am a very seasoned SFR rental property owner here in Texas on the gulf coast, I have no short term rental experience but I am looking into a STR property in NC, specifically on the coast. I currently own 4 SFR rental properties, all have been cash flowing for 5-10 years since I have had them. I may be a bit overzealous here, but let's say I wanted to invest in a 2m-4m beachfront property, would the rental income and positive cash flow on that property be enough to qualify for a DSCR loan since it can "stand on its own legs" so to speak? Credit score is 770+, my only debt is the home mortgages on 3 of the 4 properties and all have 40% or more equity in them, and income surpases 200k per year from agent work and rentals. Would a DSCR lender be able to tell me easily, am I shooting too far for the moon with a property of this value or no?

I am absolutely worn out from using this calculator. It seems every single time I analyze a deal, the cash flow and CoC are extremely low. I am sure it has to be me doing something wrong but then I found this property. It is offered at 1.6M but I kind of tweaked the sale price and loan to bring it in line with an 8% CoC return or "base hit" as Brandon calls it. The cash flow seems good too, even at full list price. I have added in the documents where I got some of the information from in the comments. Perhaps you can look at the rental calculator and compare it to the spreadsheets from the owner and let me know your thoughts. There are a few items I did not include on the estimator like permits and fees, cleaning reimbursement etc because they only happened infrequently, so I can be on the conservative side. They aslo seemed to have very little cost for management fees so I suspect they may use a leasing agent but maintain the property themselves. I did keep 10% in the property management box on the calculator though. This looks like it could be a contender for cash flow but anything north of 1.4M isn't a base hit for CoC. Thoughts?

https://www.biggerpockets.com/...

Hey BP! I am ready to invest in my first multi-family and would like to know if there is a certain order everyone took to line up their team. Should I partner with an attorney first to create LLC, lender to start on financing options, find property manager for the area etc. I have 6 SFR units now that I own and manage myself and for better or worse, they have been in my name so I have not yet ventured down the road of setting up a true professional "team". Has anyone good reason to go in a specific order in getting their team together? I am at the point where my personal credit is above 800, DTI is almost 0 except for the 6 mortgages (no other loans, high credit debt, judgements etc) and have a little over 6 figures ready to invest (could be more as I just sold my primary with no capital gains tax), just looking for a good best practice for next steps in order to close on a deal before the end of 2021. Thanks in advance for the feedback!

 Though this is true in TX to a point, there is a third party financing clause that states you have a certain timeframe to let the seller know you either can, or cannot obtain financing approval and get your EM back. However, there is a caveat to this that most agents fail to either learn, be taught, or don't read the contract, or simply the case that it is not practiced in certain areas. 

The TPF addendum states that there are 2 areas of Financing Approval, Buyer Approval and Property Approval. Buyer approval is typically the one you let them know the number of days you can obtain financing, BUT, it does state that Buyer is considered to have obtained approval when "...(ii) lender determines that Buyer has satisfied all of lender's requirements related to Buyer's assets, income and credit history". 

This can be a bone of contention when it comes down to it as unfortunately, in your circumstance, I would argue as the listing agent for my seller to keep all of the EM because you did not perform to the TPF addendum as you were not able to secure financing because of failure to successfully obtain Buyer Approval. Lenders will often take the position that if they cannot approve the work history piece then that falls within the "income" scope of buyer approval. 

To Andrew's point, local lenders and agents are BEST, as they know the market, how RE is practiced in real life in that area, and have a personal relationship with agents and appraisers to benefit the transaction on either side. Like me, it helps to know which agents and lenders look at, know, practice, or otherwise conduct business so I can successfully negotiate on my client's behalf. I absolutely hate to turn away business, but I typically don't take on clients that want to use Quicken, Rocket Mortgage, etc anymore. They do a very VERY high level credit overview to get you an approval letter then when it comes down to it, during the transaction, the underwriting is much more intense and they fail a lot of loans if the client is too close to the wire. I went though it about 3 times with different client's and in the end, winds up costing them big bucks. One time Quicken approved my client for $100,000 at a 4.2% but he had a great job, great income and I felt he would do better locally, I got him hooked up with a local lender that understood shift work, shut-downs etc and he got approved for $250,000 at a 2.8%, we are closing tomorrow on his home. 

Never underestimate the power of local relationships, boots on the ground agents, and intimate local market knowledge!

Bumping this thread a bit. Does anyone have any good "rules of thumb" or best practices on how to estimate insurance on a property? I can't imagine analyzing 10 properties a day and calling an insurance agent each time to quote a property. This may prove very difficult for coastal areas such as the one I am in as you need 3 policies, Dwelling coverage, then you need Windstorm and Hail if in a coastal county, and if close to water, a flood policy so estimating this accurately seems almost impossible. If I stay very conservative on coverages, it always shows my CoC and Cash Flow to be very low but then I don't want to underestimate this either and get into a bind. I have financing lined up, cash on hand, and ready to pull the trigger on the right property but getting my analyzation right is tripping me up just in the insurance estimate area. Any insight would be helpful!