All Forum Posts by: Kevin Manafi

Hey @Shane Taylor, I generally recommend getting a pre-approval as the first step to all of my clients so that at least you have a price range established in which to begin your search. Without it, the net is often way too wide. Getting the pre-approval first helps answer some questions by at least establishing the high end of your budget.

Hey @Account Closed, do you mean from an agent's perspective to find leads or to actually find deals?

Either way, it's a bit hit or miss. In my experience, over 75% of the time no one even picks up, or the number is super old and no longer active. However, with enough calls and persistence, every once in a while you may find someone actually willing to talk that turns into a lead or deal.

I generally call and try to start off the conversation in a way that immediately makes it clear I am not a telemarketer, nor am I trying to sell them anything--I'm just trying to have a chat about real estate.

Hi @Ryan Monahan, kudos to you for the creativity. I can't say I have heard of this situation before, and it is a bit tricky because FHA loans are specifically for owner-occupants, which would make the partnership structure, at least in terms of the loan, a bit strange. I would recommend speaking to a qualified lender or mortgage broker to see if there's any way around this perhaps with you as a co-borrower/co-applicant and your partner as the primary since he will be the one owner-occupying the property.

@Paul Deliso Finding a multi-fam or any property for that matter that is value-add and needs some TLC would be your "easiest" way of adding equity and forced appreciation upfront which would then allow you to pull more cash back out to pay back your lender, assuming the comps and market support the ARV.

Hi @Nitzan Messer, when buying a condo/townhome, it's very important to do your research on the HOA to make sure their finances are in good order and that they have adequate reserves in case of CapEx projects. Additionally, some investors will ask for the minutes (notes) from the past year or 18 months of HOA board meetings to see what is being discussed in case there are certain issues, upcoming special assessments, etc. It's also a good practice to make sure that the current owner is up-to-date with their HOA fees, otherwise that bill will become yours upon purchase.

While some people opt not to get inspections on condos/townhomes that are in good shape because of the nature of the HOA taking care of CapEx, getting an inspection is always a good idea so you can learn more about your property and to potentially discover things that may not meet the eye. Even the best of us miss things sometimes. Also, the inspection for a condo will be much cheaper and shorter than a single-family or multi, so it's worth the peace of mind.

Hi @Paul Deliso, congratulations on taking the first steps towards getting your first multifamily under your belt! The fact that you have private capital available and ready to go is very helpful and will go a long way in getting your first deal started.

There are several ways you could pay back your investors/lenders, most commonly with some sort of refinance. Different lenders/banks have different seasoning periods--i.e. the amount of time you must wait from the original purchase in order to refi--but it more than likely will not have to be 2-3 years if you have the equity available sooner. 

A simplified example with easy numbers: You borrow $90k in private money to buy a $100k house and spend $30k in renovations. In all, you are into the property for ~ $120k for simplicity's sake. The ARV of the property is now $160k. After 6 months, you find a lender that will give you a cash-out refi @ 70% of ARV, which would equal $112k. You can then return the $90k to your private money lender, get your $10k down payment back, and only leave about $8k in the deal assuming you funded the rehab out of pocket.

@Dmitriy P. I charge a $250 nonrefundable pet fee at lease signing, then $25/month for a small dog (<25 lbs). The laws on pet rent/deposit vary from state to state so I would make sure to check on that.

Hey @David Navidad, 

If the comps are really where you are saying they are, then you are in a great position. Having options is nice.

The decision on whether to do a cash-out refi and keep the property or sell outright and do a 1031 Exchange into a different property all comes down to what you are trying to accomplish. For example, the property is only breaking even on cash-flow...is this because the rents are under market? Do you think the market that the property is in will see rent price growth over the coming years? If so, and if you are looking for a monthly passive income, then perhaps keeping the property and just taking your equity out to roll into another property would be the best move.

However, if you aren't looking to stay in Texas and don't want to stick it out, then selling with that much equity is another solid option and gives you more flexibility to take that money and reinvest elsewhere.

Hi @Jon Ng, welcome to the BP community. Glad to hear you are taking the next steps towards financial freedom with real estate investing!

It's hard to recommend areas for you without knowing your budget, investment objectives/criteria, and specifics of what you are trying to accomplish. However, given that you are based in New York, New Jersey would be a logical place to start your search if you are looking to stay local. 

I'm an investor and investor-agent based in Northern NJ. I'd be happy to connect and learn more about what you are looking to accomplish.

Hey @Davon Johnson, equity is equity regardless of where you are, or single-fam vs. multi! In a state like New Jersey with the prices being what they are, the "easiest" way to do what you are suggesting is going after distressed properties in seriously dilapidated condition so that your ARV is leaps and bounds above where you purchased, enabling you to extract enough cash on the cash-out refi to pay back your investors and hopefully yourself.

@Natalie Schanne's suggestion about using an owner-occupant loan with a small down payment is also a good idea so that you have a much smaller amount of cash in the deal upfront as well.