All Forum Posts by: Kin Meng Sio

@James Wise GREAT advice, thank you! I agree that you can make or lose money in any market. My market research isn't perfect but it forced me to find ways to face my fear and find ways to mitigate it. From the exercise I'm also building a habit to do due diligence coz it's the BIGGEST mistake a newbie can make in my opinion. to get better understanding and give me confidence for out-of-state investment so I don't regret it.

More thoughts on your suggestions:

• Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.

Agreed. My criteria is a B-class area and homes built after 1970, mainly because I have low confidence dealing with electrical/structural issues that can pop up in older homes. How do you normally determine class of a neighborhood? I use various online resources to determine based on crime rate, owner vs renter ratio, income, school districts. I'm also reading a lot in the Houston local forum to get a better feeling, and will make a trip down there soon to talk to brokers/investors. Do you have other suggestions? 

• Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.

Yes inspector is a MUST for me (as part of the inspection contingency I will definitely put on every offer). Any tips on vetting great inspectors? 

• Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.

Yes I'm planning to do that even I will be buying with cash upfront. I'm not sure how much insights an appraiser can give on ARV before rehab but I like having more unbiased opinion to cross-check each other, even if it adds a bit more cost upfront. 

• Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.

Can you elaborate more on this? Does clear title here mean being clear in any sorts of legal/financial issues on the property? I can't imagine myself being one of those craigslist maniacs ;)

• Make sure your property manager is a licensed real estate brokerage.

Can you elaborate more? Why does a property manager needs to be a broker? Are you suggesting using the same person who serves as property manager AND broker? Or just making sure the proper manager has a broker license?

• Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.

Totally agreed. I chose the BRRRR route over turnkey coz I'm willing to embrace the risk to get better in the game. And of course the key part is to be willing to do what it takes to mitigate the risk. 

Thanks all for the awesome reply!

@Jay Hinrichs you are spot on! End of the day there IS opportunity in every market; it really comes down to my personal preference and whether I feel comfortable committing to a market. Houston is now my top pick as I can see myself living there (no cold weather, more city-like). Another advantage I have in Houston is the significant Asian community there. Lots of brokers/investors/contractors I can tap into more easily. However flooding is my top concern in Houston and I don't know how much I can avoid/mitigate even by not buying properties in known flood zones.

@Art Perkitny Awesome PRODUCT that you built! How much do you charge after the 14-day trial? And what data sources do you pull in for determination (if it's not confidential ;) ). I'll try it out once I get back from an international trip. I like using https://www.niche.com/ but their rating seems too overrated, while yours is more conservative (which is a good thing for me)

More on this news:

ike Fannie Mae's HomeStyle, CHOICERenovation allows investors to purchase and renovate a one-unit property without residing in it. The FHA 203k requires borrowers to live in the property for at least a year. All three programs require a borrower to live in one unit of a two-to-four-unit building.

Unlike FHA 203k, CHOICERenovation doesn't require a consultant to approve the project. Another difference from FHA 203k is that any renovation or repair can be financed with this loan as long as the work involves something permanently attached to the property, Marrocco says.

“You can even finance an accessory dwelling unit, as long as this would be in compliance with local zoning rules,” Marrocco says. “We want this loan to help millennials, seniors and multigenerational households adapt a house to meet their needs.”

I believe it's more comparable to Fannie's HomeStyle loan where it has less limitation of buyer's situation, and difference on the down payment requirement. HomeStyle loan doesn't limit to just first-time home buyer (I see 203K as a variation of FHA loan). You can have 4 concurrent HomeStyle loans on either primary residence or investment properties (4plex max).

Check out more on HomeStyle loan, which should give you a better sense of what Freddie's would look like. Today I'm actually going to talk to couple lenders who offer HomeStyle loans, I'll let you know how it goes. 

Hi all,

Does anyone know any local lenders/credit unions/banks in Seattle who provide Fannie Mae HomeStyle Loan?

I found couple from Google, and am planning to talk to them tomorrow to find out more. Meanwhile if anyone knows of any lenders, definitely let me know!

List of lenders I've found so far:

Prime Lending

Washington Federal

Evergreen Home Loans (maybe)

@Nicole Hoss and @Mitch Coluzzi thanks a lot for your input! With further research, I'm more geared towards Houston at this point considering some local connections I have down there. 

If eventually DSM market is back on my table again, I know who to reach out to! Thanks again for your input!

Hi all,

My goal is to get my first out-of-state BRRRR deal in 2019. I'm based in Seattle and planning to invest in Houston after some fun market research (more detail on my 1st post in BP). 

I'm going to connect with lenders in Seattle for the re-finance part of the deal early on (local credit unions, etc.). What's your experience connecting with lenders for out-of-state investment? Do you normally connect with lenders from where you live, or where your invest (Houston in this case). Also appreciate if any tips and tricks out there connecting with lenders with out-of-state investment. 

I'm also planning to fly out to Houston to connect with local folks and to build a team down there. Let me know if anyone would love to meet up!

Apologize not much value-add in this post yet. Though I'm working on some cool automation (thanks to my tech background) on deal analysis, etc. Excited to share more of my progress in the upcoming weeks on the BP forum! 

Hi all, just joined Bigger Pockets and I'm excited to connect with all of you! I'm working in the tech industry in Seattle and I'm trying to start doing out-of-state BRRRR, as Seattle is too expensive to start with.

Then I'm facing my first challenge: which market should invest in? I've heard couple good options from podcasts and other investors but I decided to do some homework. From my perspective, I want to invest in places where I can imagine myself living in and having a good life, so I started googling best places to live in the USA, and found https://realestate.usnews.com/places/rankings/best-places-to-live.

US news has done some extensive research for 125 metro areas across the country. Then they came up with multiple indices for ranking (you can find out how they come up with their indices here) Some of the ranking criteria includes home prices, rent, job market, cost of living, net migration, etc. PERFECT! Sounds like some criteria I would look at as an investor. Then I did some web scrapping to pull the valuable data and stick them in a spreadsheet. For those who are interested in the data and play it around yourself, click here to download it from my Google drive. 

For those who don't wanna deal with spreadsheet, this is what it roughly looks like:

After playing around the data a bit,  we picked 4 markets for further investigation and analysis. I also stick some of my emotional thoughts on these markets:

1. Fayetteville, AR

Pros: pretty well-rounded in terms of cost of living, quality of life, job market, net migration. Housing price fits my price range of < $200k.

Cons: fairly small metro area (500K population). Small metro size means less opportunities (generally compared to bigger metro areas).

2. Des Moines, IA

Pros: pretty well-rounded in terms of cost of living, quality of life, job market, net migration. Housing price fits my price range of < $200k. I have family in Minnesota so I may be able to get some support there too. 

Cons: fairly small metro area (600K population). Small metro size means less opportunities (generally compared to bigger metro areas).

3. Boise, ID

Pros: High appreciation, and I've personally been there so I have a rough idea of what it feels like. Closer to Seattle area so it's easier to fly there for anything. 

Cons: To start off my investment career I'd rather start in market with more steady growth. Rapid appreciation sounds attractive but also scared me a bit for market downturn. 

4. Houston, TX 

Pros: I have friends down there so I can get more local knowledge. Big metro area seems to have more opportunities in general.

Cons: Bigger metro area also means more competition (especially larger players).  

By no means I'm trusting this dataset 100% but it helps me narrow down for further actions. My next steps:

1. Further research on these 4 markets and get down to a winner I will focus on.

2. Using a similar approach to lock down what neighborhoods to invest.

3. Start connecting with local investors, agents, property managers, contractors to build a team. 

4. Fly down there to connect with people. Live in local Airbnb to get a feeling. 

5. Find deals 

Love to hear all your feedback on my approach! Please share what you will look for when considering an out-of-state market. Will also appreciate tips & tricks on neighborhood research. 

@Marisa R. Thank you for sharing! Very inspiring for a newbie like me who's researching and getting ready for out of state BRRRR.

How did you manage rehab from afar? Are there tips and tricks you can share? I can imagine it'll be even harder from out of country and totally different time zone. So far rehab management remotely is my biggest fear and I'm doing all education I can to overcome that.