All Forum Posts by: Kuriakos Mellos

Awesome. Thanks Justin

HI All,

I would love some feedback here as I am working on my first out of state investment in Michigan and trying not to over think things.  

I am using a local property manager, who I met and is awesome, and made an offer on a house that he has been managing and another investor is off loading.  There is a tenant in there that wants to stay, and we will work on raising their rent (my first time dealing with Section 8).  I actually drove and went to the walk thru and was there with the inspector.  This is on the west side of Grand Rapids which is appreciating greatly, and will cash flow on day 1 but the house is a bit older and some items were found that I had not dealt with in the past. 

(Potential termite issues in the past,  rodent feces in the attic, some support issues in the basement) but according to the inspector nothing glaring and the building won't fall down - I legit asked that. ;-)

I feel like this could be a great mini BRRR opportunity, where I can go in and do what fixes I can while the current tenant is in there - make sure they are happy and stay as long as possible - and then when there is a turn go in and do the other major fixes and do a new appraisal at that time.

Has anyone taken over a lease with a current tenant in there and been able to succesfully raise rents to match market rates?

Is proper and ongoing termite treatment a good way to help control future issues? 

Anyone else in the Grand Rapids market?

Thanks all!

K-Man

One of my first mistakes in the process of learning about banks/financing and getting mortgages was the whole concept of shopping around.  I think I was nervous about the 'dautning' task of getting financing, and when I was approved by a certain lender - I didn't bother going anywhere else. (Which I could of easily).  

Remember - lenders in many cases are like sales people - (nothing wrong with pushing a sale! I am work in sales at my W2 job) but their incentive is to close a loan.  Taking a step back and seeing what other options are out there can not only save you money up front, but over the life of a loan.    Once you get your credit pulled for any real estate sort of transaction (refinance, new purchase etc) - you can go talk to other lenders WITHOUT any major impact on your score.  

Now, don't go crazy and overload your self with info - but targeting a few banks/credit unions etc to talk with ( and trust me they will talk) - can be super advantageous.   Ask for a cost analysis break down, get an email quote - leverage that against other banks - and eventually you start building a 'team' that you see has your best interest in place and will work with you to get the best desired end goal.  I have used the big lenders, local lenders, and most recently a local broker to help secure loans - all with different approaches.  It was not until a recent refinance that I found the power of 'calling out' people for not matching other quotes.  1 point saved on a $100,000 mortgage is $1,000 saved off the bat for closing costs - a .25 lower percentage point on a loan can equate to thousands saved over the life of a loan. 

Shop around, it might take a little bit more organization, time and negotiating on your end but will only help you out in your journey!

K-Man

@Joshua Rowland hello! (I love Nashville by the way). Agree with Tim above, it comes down to numbers - something to think about, especially with how covid is still affecting lives (and universitites) - what is the local college's plan come back to in person learning looking like? Student housing can be a VERY expensive for students to cover - especially if on campus. Providing a nice and more private setting for students is appealing. HOA's are a little bit of a pain BUT there are perks: water is covered, lawn maintenance is usually covered and you can count on putting the majority of your CapEx 'funds' at 0 because HOA's cover those kind of items. If you can get a decent mortgage and then be able to come back and charge a higher rent for students - it could be a win - but check your numbers first.

Hi there! Most big national companies offer some decent renters insurance. I have seen rates from like $19.99 to $40 a month in my market. (Chicago)

Hey everyone - thanks for the feedback! I had NO idea that a FHA loan a had a permanent PMI tied to it - even if you refinanced with another lender? I think my take away is this : find a primary with a conventional amount at like 5% - and if I ever move I can rent it out without being worried about being tied down to an FHA. As for a BRRRRR, just gotta find that deal.

Awesome. Thanks everyone - multi units in the city of Chicago are pricey - I really like the Andersonville/Edgewater area (have two investment CONDOS - yes condos - that most people steer away from but are great) so will most likely be looking into the burbs and will definitely check out that rehab loan.  And you are totally right @David M. about low percentages down with regular conventional loans.

Thanks @Joe Splitrock I guess I was trying to get creative. So two separate strategies - FHA loan to help get a low downpayment to grab a property and then rent it out after a year. Future properties would just have to be conventional loans. (Or other financing) BRRRR - just gotta get a good deal so that when I refinance I could take the money out and repeat ;-)

Hi @Joe Splitrock thanks for the response back. I was thinking the advantage of moving into a FHA duplex for example was to house hack half of it, and then live in the other half for the year requirement - before doing that again. Do you still need to have 20% equity in the property at that point to do a future FHA loan?

Thanks!

Hi everyone!

I am looking to buy a new primary home next year (currently my primary is a condo and going to convert that into a rental in 2021) and was wondering if you could use the tools of an FHA loan to buy it and a BRRR later on to convert it to an investment? Lower money down to purchase, throw some money into it to make it look nice, and then place renters in there after a year? That is doable correct?

Thanks!

K-Man