All Forum Posts by: Jon Kelly

@Alex Moazeni reach out to other lenders, particularly small local/regional lenders that specialize in real estate. 

Ask specifically why you are limited from additional loans. 

Ask for commercial loans instead of residential

@Tri Le well done. I wish you the best of luck. Sounds like you are committed to taking action. 

What states/cities are you looking for your 40 or 20unit property? 

@Sebastian Dombrowski all future tenants or just the first tenant? A 12-month commitment is typical, but then you should have the ability to cancel the agreement with a 30 or 60 day notice. 

Continue interviewing property managers in the area and see what others include. Property management agreements will vary by state and local areas, just like so many other things in real estate. 

@Paul Sandhu as long as you have enough demand, simply say no to the request. Maybe respond with data that lets them know your price is at or near market price

@David Baskin I'll keep ~$25k in reserves. I have 51 units, so it's $500/unit, which is probably under reserved. 

6 months of expenses is safe. As your portfolio grows you can decrease this amount. For example, after 10 properties/units decrease to 4 months, 20 properties/units 3 months, etc. 

Without supplemental income you want to be more conservative, but with supplemental income you can stretch these a bit

@David Baskin Similar to @Joshua McMillion, all funds made from REI via monthly cashflow or cash out refinances are used to fund additional investments.

I have a cash reserve account for all properties, which is rarely touched. I rely on my W-2 job to "pay myself" and pay for lifestyle expenses. 

@Dylan Fellows there are so many different ways to analyze deals. When analyzing deals I'm not trying to come up with the offer price, but the price which meets my particular goals (e.g. $100/mo in cashflow or 12% cash-on-cash). 

I would suggest start with the asking price when you begin to analyze the deal. Then, decreasing the price if it does not meet your goals. The price at which you meet your goals (e.g. $100/mo cashflow or 12% cash-on-cash return) is your maximum price you will ACCEPT (not offer). 

Your offer price will be based on many factors (recent comparable properties, time on market, demand in the area, risk in investment (is rehab necessary?), seller motivations, etc.).

@Carlos Garcia I would still make the offer, but make it contingent on inspection or at least "review" of the interior

@Joseph Pedraza you’ll be glad to know the fear of buying your first property goes away after you buy your first property. Then you can laugh at yourself for letting fear limit your actions

When does the sale begin? 6mo? 1yr? 3yr? 5yr? If we all had crystal balls we'd be a lot wealthier. Try to do both: buy now and buy if/when a crash occurs. It has been more challenging to find deals the past 6+ months. In my opinion, the best thing to do is stay disciplined with your analysis and numbers. If you're able to find or create deals within your parameters then buy. It's becoming increasingly important to find off-market deals