All Forum Posts by: Marc Winter

@LaTara G.,

One to 4-family properties are considered residential and will qualify for owner-occupied mortgage rates and underwriting criteria.

5 units and up are considered commercial and have entirely different criteria for approval and different rates, downpayment requirements, and amortization schedules in most cases.  

They are not considered residential loans, and therefore it makes no difference if it is occupied in whole or in part by the owner of the building--it is still a commercial loan.

@Peter Morgan,  in our area there is a shortage of available units and a surplus of tenant-applicants.  Rentals move very quickly here.  I don't know the size of your location, but here we are in a small city with a general population of about 70K, up to 100K with the small, surrounding towns.  

We are finding lots of investors and tenants looking to get out of the major cities close to here--NYC and Philly, both about 2+/- hours away.  I'm hearing that's the case in many locations around the country.

Keep looking!

Look into Delaware REIT 1031. You will own shares in the trust, but no liability and receive income as I understand it.

@Matthew Johnson--Why the rise in overhead?  The permits are not an issue if pulled by licensed professionals, ie plumber, electrician, etc.  

You feel uncomfortable with this contractor?  My advice: listen to and trust your gut. 

@Rey Gonzalez, oh man, do I HATE temporary occupancy before closing!  You want to see additional negotiations at a closing table, just let the buyer occupy the house for a few days or a week or two, and any nail hole will come up at the end.

If at all possible, just say NO!

We have a 5% per year increase built into the lease.  It is up to the owner to decide to exercise the increase in whole, in part, or not at all, depending on the tenant, their payment history and individual situation.

If you start giving a reason (they will read it as 'excuse') for the increase, it always leaves room for argument or discord from most people.  If it's baked into the lease, well, there it is.

Good luck!

@Kelsey P., we have it in the application!  

We want the applicant to know the consequences of providing false or misleading information.  We base our decision to accept or reject based on our research with the facts they provide us.  Better be accurate facts, or our decision will be flawed.

And that's why we have it printed on every application right above the tenant signature line.

@Dreama Rice, so long as the siding is in good condition, don't worry about it.  The crawlspace--get an estimate from a reputable (B Dry) type company, and ask the seller for that amount in price reduction/credit at closing.  

You should have the work done, not the seller.  That way you know it is done up to your own set of standards.

Your home with the $75K in equity is no longer financially feasible?  Something happen there?  If you have a small child I'd think long and hard about selling your own homestead to house hack.  But that's just conservative, old-school-dad me.

@Nick Ferrari of course, always happy to talk about real estate with another investor!

M

Speaking only about negotiations, the cash offer will trump a financed (mortgage contingency) offer.

I've done dozens of BRRR (before I heard of that term, lol) and always it was 'all cash, as-is, where-is'. No inspections, no contingencies.

While that type of deal is not for the inexperienced nor for the faint of heart, it did wonders for my bottom line.

Good luck!