All Forum Posts by: Matthew Pinkston

Just a quick first impression here is that I would still calculate management fees in there. With these numbers, you're not really leaving yourself an out if you ever get in a position where you can't self manage anymore. Those HOA fees look a little steep too. What does that cover?

I also don't see capital expenditures in there (replacing roof water heaters, etc.) That can become a massive unexpected expense. Remember, the roof, water heaters, etc. eventually need to be replaced.

Thanks, @Rich McCormack
I hadn't really thought of using Dropbox, so that's a good idea. And asking which format they prefer could potentially avoid some confusion too. 

I thought I'd get really ambitious and compile it all into an indexed pdf with my business plan, but considering how long that's taking, I think I just need to get it out there for now. 

In my experience, it's difficult to tell what the turnover will be simply by comparing the number of units. Location, amenities, and any number of other factors will play into it.

Don't be afraid to contact the seller and ask for historical expenses and turnover rates. It's important to get as close to real-world numbers as possible when doing a detailed analysis, and it's reasonable to ask the seller about rent history. 

Also, don't forget to consider capital expenses in. This can change in 2-unit vs 4-unit. Are all units run off one water heater, or is there one for each unit? (they'll need to be replaced every so often) 4-plexes have twice as many appliances, but you get twice as many families under a single roof (which will also need to be replaced eventually)

Just run the numbers on each independently with as much accuracy as you can gather, and the better deal will start to emerge. I think after that, you'll just have to follow your gut feeling.

Hello all, 

(TL;DR version): How do you organize and submit documents to a prospective lender? Additionally, what's your process to keep those documents up-to-date?

I'm in the process of finding a portfolio lender to help me finally purchase a 5th buy-and-hold property. I've gathered all(?) the documents requested by the first lender in a folder on my desktop. 

- last 2 years tax returns
- pay stubs
- pages and pages of financial account statements (bank, retirement, brokerage, etc.)
- driver's license, ssn
- mortgage statements
- ???

The list goes on.. But my problem is with keeping all this organized, up-to-date, and presentable. Is it enough to simply zip up the folder and send it off, or is there some expectation of bundling it all in a more digestible format? What system do you use to keep such a large number of documents manageable and ready to be put in front of a prospective lender?

Any advice would be greatly appreciated!

Hi @Gracen Kostelecky, and welcome to BP!

I currently have a few duplexes there in Ames that have turned into some great cashflow properties (after a number of tough lessons). It's a great market for investing even if prices are a bit high. I'd certainly be happy to answer any questions you have about the area to the best of my ability.

Cheers!
-Matt

Hi Chris, 

Personally, I just called my auto insurer (Geico), and they were able to give me a slightly discounted rate through their partnership with Travelers insurance. Of course, it's always good to shop around, but I think it's common to start with any insurer you already work with because they seem to love package deals. 

Of course, the property details can change who's willing to insure and how much it's going to cost too (fuses vs breakers, fire place, etc.) 

That's a really good question. Especially in this situation it could be sensitive.. Just a shot in the dark here, what does her financial situation look like? Is there perhaps a way to augment her rent through a local rent assist program, or maybe even section 8? 

- If not, I'd agree that you have a really strong case to ask them to lower the price.

Although I'm not a wholesaler, I've often heard visiting the local REI group as being a good source of leads. What methods have you tried so far?

Networking on this site is definitely a good way too. Make sure to get plenty engaged in the forums. As people get to know you, you'll find more and more leads to serious buyers.

I'd say relax, take a breather, and just take it one thing at a time.

- There's always deals. They're found with patience and diligence, and there's no need to rush. I'm struggling with this now myself as I'm looking for my next property after coasting for too long. It's like staring at a magic eye painting; it might give you a headache, but if you look long enough, you'll find it.

- There's always renters. As long as people want a roof over their heads there will be renters. Just pick a stable market. (good infrastructure, multiple job sources, good schools, etc.) And provide a clean, safe, place. You will find renters.

- With one and two taken care of, you'll be able to avoid problems with the mortgage.

- Financing a second property is really, really easy. For example, rent out your current place, move into a duplex, and rent out the other half. Live there for a year, then repeat until you have 4. As a vet, you have access to VA loans which means you might be eligible for extremely good financing.

I wish you the best!

 This looks like a pretty good pro-tip right here.. Now I've got an itch to go measure everything again.