All Forum Posts by: Matthew Kirkwold

Hello everyone, I recently had a potential tenant ask me about an emergency housing voucher and if I work with this program. She said it is due to a domestic violence issue. I am in South Dakota and I am not sure if there are laws requiring landlords to work with this program? I haven't heard of it before and am looking for some advice! She sent this after I was upfront about my minimum qualification standards and she said that all sounded good and then proceeded to ask about the voucher. Thanks in advance!

@Mariah Porter

$150 a month for cap ex and maintenance might be too low considering that it’s been on the market for 6 months. Would there be some rehab budget before you rent out the rooms? Every house I’ve looked at that’s been on the market for awhile or is at a cheap price needs some rehab work and even after a rehab, you might want to plan for more than $150 a month in cap ex/maintenance.

Another thing to consider might also be that if you’re worried about finding renters for the rooms, they will also be your roommates and if I were doing that, I would almost want higher quality tenants that will be my roommates rather than typical tenants that you don’t live with. I’ve had some nasty roommates (weren’t clean or respectful with noise levels late at night, among other things) and it was pretty miserable.

Like other responses in this thread, maybe you might want to look at multi family? I agree analysis paralysis isn’t good but I feel there are still good opportunities where you’re not settling. Best of luck!!

@Trevor Alexander

Hi Trevor, thanks for the post, I’ve learned a lot from what you said and doing further research into it. For instance, I wasn’t aware of bps in the world of finance and I’m glad I now have a light understanding of what that is and how it affects the ability that banks have to be more or less competitive.

I was under the impression that all banks would go off of the same requirements but because they are able to modify the margins how they want, they can make their terms more competitive if they desire. Like I said, I’m constantly trying to learn the ins and outs of different aspects of real estate investing, such as how different lenders work. Thank you for highlighting these concepts for me so I can have a starting point for understanding details about deciding on a bank. I appreciate the input!

@David Kelly

Hi David, thanks for replying, I found your discussion very useful. I was under the impression from one of the banks that since all conventional loans are federally funded, they would have very similar (if not identical) interest rates. Upon further research and reading your response, I realize that’s not exactly correct and this makes much more sense to me.

I’m constantly trying to learn the ropes of difference concepts around real estate investing and look forward to being well versed in lending and how it all works so I can be a better investor! Thanks again for your insight!

Hello I've been talking to three banks and I have been inquiring about potential interest rates I could get if I were to get prequalified with them for a conventional loan on my first investment property. I don't have an exact property identified but am wanting to find a competitive interest rate so I can know what I should be using to analyze my deals (So far I have been using 4.25% to be conservative). I'm wanting to put down 20% and the interest rates have been between 3.25% and 4.25% considering my credit score is consistently between 740-760.

I asked why there is a difference between banks and the rates I'm being told. One bank (the one saying 4.25%) said it is also confusing since all conventional loans are funded by fannie mae / freddie mac etc. and the interest rates shouldn't vary much at all. A different bank (the one saying 3.25%-3.75%) said that every bank can charge whatever interest rate they want even on conventional, federally funded loans and that the interest rate is getting bumped up on me because that allows them to reduce the fees. The third didn't say much about the differences and said I should be able to get ~3.625%. All three of the banks are local to my area, two are fairly small and one is larger but still local, not like a Wells Fargo or anything.

I haven't heard anything about this before now and am asking for insight into how the fees and interest rates are correlated and if I'm better off going for a higher interest rate and lower fees or vice versa. I am also confused on if I should be getting pre-qualified with multiple banks because I know they can't give me accurate numbers without a loan application and running my credit report. I have not heard clear advice on podcasts saying if it is good or bad to get pre-qualified by multiple banks. 

My questions are:

1) Does a higher interest rate mean my closing costs will be lower and a lower interest rate mean my closing costs will be higher? 

2) Should an investor get multiple pre-qualifications or just one to avoid wasting anyone's time?

What is everyone's advice and take on these concepts?

Thanks and I appreciate you all!

Best,

Matt

@Baasil Khan

Hey Baasil, I would also recommend @andrewadam he has helped me a lot and is very knowledgeable! Feel free to reach out and we can always chat!

@Steve K.

Steve, I like the idea of playing the “against business policy” card. To me, business policy can be adjusted as needed as long as it’s applied evenly to all your tenants to avoid discrimination and just being unfair in general. In other words, would you agree that if something comes up that you hadn’t considered before, is it acceptable to tell the tenant you will get back to them, add it to the policy since it is new, and then keep that as a firm policy going forward?

@Scott M.

I wouldn’t say I find it scary, per se, but hearing and reading what other people do had led me to think it was a bigger issue than it appears to be based on the responses in this forum post. I have seen business owners undergo severe financial hardships because they didn’t have a backbone. I understand how it is necessary to be firm but fair and think it’s a challenge I can overcome! Thanks for your intuition, Scott!

@Joe Splitrock

Thanks for the response Joe! I thought I had read somewhere on the state website that you can't register an LLC to a PO Box in South Dakota. That's intriguing to me but that just means every other landlord/business owner has their address on public record and anyone can find it. I like that these responses have reinforced to me that having your name/address easily accessible is certainly unavoidable and that it won't create issues like certain preconceived notions tend to make me think.

@Dawn P.

Oh man, that’s an interesting way to approach a landlord! Did the person respectfully walk away when you told them it was already rented out? It’s surprising he didn’t give you a call first to save the time of looking you up and driving over.