All Forum Posts by: Mark Munson

Quote from @Vladimir Amazan:

Hello fellow investors, anyone in the community specialize in house hacking small multi family properties?
I am going to house hack a triplex or a quadruplex in Orlando, fl? Possibly San Antonio, TX as well, I don’t mind relocating.
I am working with an agent in the Orlando market and I'm already pre-approved for an FHA loan.
My agent mentioned 3 to 4 units inventory are extremely limited, that’s why I want to also be looking out of state (San Antonio) for more opportunities.
Any referrals for good agents/brokers and LP in those areas?
Any insight would be greatly appreciated.
Working to acquire my first deal in the next coming months

Thank you for taking the time to read this!
Good luck on your own pursuit!

I'm in Orlando and operate on the lending and investing side here and I can attest it is extremely difficult to find 2-4 units here. I'm an investor as well and in my experience they just go too quickly and there is just a lack of them to begin with. All the major wholesalers here cherry pick those for themselves too, so they are very hard to find. I don't want to fully deter you, but just know you are looking for something very rare in one of the most competitive markets in the country. I would open up the box a little and look at the secondary and tertiary markets around Central FL, as they may be a little less competitive; albeit not too much difference. 

Quote from @Melissa Barnes:

I'm thinking of using Kiavi to fund my next fix and flip but they get terrible reviews on BBB.  Does anybody have any experience working with them?  Good or bad?  Thanks!

 I just posted my experience in another thread, but see below:

I've done roughly 120 loans with them over the last 14 months on the broker side and have worked with just about every major lender in the space too. They aren't the best when it comes to DSCR loans, but that isn't to say their DSCR program is bad. As for short-term financing, they are fairly easy to work with but the biggest hurdle is their internal credit model. People with good credit scores can even be denied. If you get past that, it is a fairly easy process. As mentioned above, they have some of, if not the best, tech/portal out there. However, you aren't going to get the best communication at all times and much like most lenders, there won't be a large degree of consultancy on investing. Most loan originators you talk to at the big lenders are just capable of reading you terms off of a rate sheet, beyond that they aren't the best at actually giving you good advice. Most of the time they are young 20s and fresh out of college and never owned a pierce of real estate. That may not matter to you, but I tend to want to work with other investors, even my loan originator, realtor, title company, etc. You also want a point of contact that knows underwriting too, that way they are proactive in ensuring your deal will get to the closing table. Cheap rates and modern tech are great, but none of that matters if they can't actually get you to the closing table. Just make sure whomever you work with is halfway competent and communicates well, the latter is the most important. Feel free to reach out if you need any more advice. Best of luck!

Quote from @Dave Harlan:

Wondering if anyone has used Kiavi as a lender? Thoughts and experience using them?

 Hi @Dave Harlan

I've done roughly 120 loans with them over the last 14 months on the broker side and have worked with just about every major lender in the space too. They aren't the best when it comes to DSCR loans, but that isn't to say their DSCR program is bad. As for short-term financing, they are fairly easy to work with but the biggest hurdle is their internal credit model. People with good credit scores can even be denied. If you get past that, it is a fairly easy process. As mentioned above, they have some of, if not the best, tech/portal out there. However, you aren't going to get the best communication at all times and much like most lenders, there won't be a large degree of consultancy on investing. Most loan originators you talk to at the big lenders are just capable of reading you terms off of a rate sheet, beyond that they aren't the best at actually giving you good advice. Most of the time they are young 20s and fresh out of college and never owned a pierce of real estate. That may not matter to you, but I tend to want to work with other investors, even my loan originator, realtor, title company, etc. You also want a point of contact that knows underwriting too, that way they are proactive in ensuring your deal will get to the closing table. Cheap rates and modern tech are great, but none of that matters if they can't actually get you to the closing table. Just make sure whomever you work with is halfway competent and communicates well, the latter is the most important. Feel free to reach out if you need any more advice. Best of luck!

Hi @Gerardo Lewis

      By loan amount, I assume you mean the cost of financing. For rehab cost, if you are getting it financed, make sure you ask the lender if you are paying interest on the rehab cost from day one or as it is drawn. If the latter, that means your holding cost will increase every month as you pull more money out of the rehab budget. You are also forgetting about taxes, unless you are using a 1031 exchange. You are going to have closing costs on the front and back end, depending upon how you negotiate those with the seller and the end-buyer. You will also have utility costs to keep in mind. Those are the things that immediately come to mind. 

Quote from @Elyse Lonberger:

Hello. I'm looking to get into my first airbnb just outside of Asheville. I've done one long term rental so far. It is now on the market and I'll be doing a 1031. I should add that I currently live in Colorado. Please send lender recommendations along with terms. As well as agent recommendations. Tia

Are you looking to buy a turnkey property? If so, just make sure you ask the lender how the underwrite the Debt Service Coverage Ratio. Many lenders will still base the figures off of a long-term tenants rent, which isn't always ideal when buying an STR. This can cause you to have to put more money down. You want a lender that uses AirDNA projections or something similar. Alternatively, if the current owner uses it as an STR already, I would get their AirBnB statements if you can, this will help with underwriting. There are other alternatives to this too, so make sure you work with a lender that has options for STRs. Also, make sure they rate lock you for 45 days from the beginning of the loan process and avoid any lenders charging up front fees. Feel free to reach out if you need advice. Best of luck!

Quote from @Rachit Puri:

Quote from @Michael Baum:

Good advice here @Rachit Puri. I can't see you doing well with 450k IMHO. We looked 2 years ago and everything in that budget range was not able to perform, even with us managing it ourselves.

The ones that seem to do really well is in the 1m plus range. Like @Ryan Moyer pointed out, the 9+ bedroom themed places do very well, but the buy in is high.

Thanks, Michael for sharing your experience. I know the realtor will say that it's doable with 450k in Orlando but I have to be very creative with the listing. If STR is not giving me enough return considering the extra hours I have to put then wondering if it's worth investing. Maybe I find a partner and then invest in a bigger home.

I want to hear more stories like yours from other investors in Orlando with a 450k budget for me to take a call.

I am in Orlando and work with a lot of STR investors on the financing side of things. You want to buy a larger luxury asset if you want to compete in the Kissimmee area by Disney, in my opinion. I have a client that owns and manages roughly 35 units in Encore, but all those are a minimum of $700k. If you can get over 8 bedrooms (ideally 10), you are much better off. I'd consider buying something less expensive, but seperate yourself by theming it amazingly. Feel free to reach out if you need advice.

Quote from @Chris Kendrick:

Quote from @Mark Munson:

Quote from @Chris Kendrick:

Quote from @Scott E.:

The difference between buying a turn key rental property and doing a BRRRR is..

-TURN KEY RENTAL: Buy, rent, repeat

-BRRRR: Buy, rehab, rent, refinance, repeat

If you're up for a remodel then a BRRRR is still a good strategy. It will help you learn how to buy a deal under market value, how to add value through renovations, and how to manage a remodel. But when it comes time to refinance you will probably be disappointed. Values are dropping, and rates are up. This is that part of the BRRRR method that is broken right now.

How you going to buy an turnkey property and rent it out with cash flow, turn key is at market value

 Just because something is at market value, doesn't mean it doesn't cash flow. Even 100% financed turn-key properties can cash-flow, it is just market and price point dependent. 

 Unless you get a real cheap house that is turn key. But good luck with that

I am a lender, so I see cash-flowing properties all the time. And you'd be surprised how many people have cash. The point being is that turn-key asset investing works even at retail price and can cash-flow from day one. If your market isn't a cash-flowing market, then look elsewhere. If you are solely focusing in on cash-flow, you are missing a myriad of other factors in REI that make you money, as laid out by the gentleman above. This is a multi-billion dollar industry, so people are making it work everyday across numerous lenders and markets. 

Quote from @Chris Kendrick:

Quote from @Scott E.:

The difference between buying a turn key rental property and doing a BRRRR is..

-TURN KEY RENTAL: Buy, rent, repeat

-BRRRR: Buy, rehab, rent, refinance, repeat

If you're up for a remodel then a BRRRR is still a good strategy. It will help you learn how to buy a deal under market value, how to add value through renovations, and how to manage a remodel. But when it comes time to refinance you will probably be disappointed. Values are dropping, and rates are up. This is that part of the BRRRR method that is broken right now.

How you going to buy an turnkey property and rent it out with cash flow, turn key is at market value

 Just because something is at market value, doesn't mean it doesn't cash flow. Even 100% financed turn-key properties can cash-flow, it is just market and price point dependent. 

Hi @Jonathan Riordan

     2.5% isn't necessarily high. Most are between 1-3% on average. The size of the loan plays a factor too. The lower the loan amount, the higher the points too. We would need more context to tell you for certain, things like: credit score, loan size, asset type, refinance/purchase, etc. 

Quote from @Jarret Durst:

Quote from @Kyle Tusing:

Hi, so from my interpretation it could just be the loan or the servicer that the lender uses that requires it to be at least 100k. I have seen this before because it does not make sense for them to lend under 100k due to the return they receive. The two options I see are to continue with the loan take the 100k use as much of the extra 60k for renovations and then use any extra for another downpayment, or once the renovations are complete refinance and roll the extra money into the new loan. The other option would be to find another lender that does not have the minimum, or use hard money.

 Wait, you can use any excess money in a loan to purchase another property?

 No, that is incorrect. No reputable or knowledgable hard money lender will just give you the rehab funds and certainly not extra money. They'll go bankrupt quick with that model. You could just walk away from any project making money without lifting a finger if they did.