All Forum Posts by: Medi Sarwary

@Account Closed

He mentioned going the FHA route so I'm assuming he plans on living in one of the units.

If he lived in the unpermitted duplex couldn't he mitigate the legal risk while renting the permitted units? 

@Johnson H.Maybe this question is to generalizing but to meet that 50% down, the typical 5+ MF investor in the bay is a high net worth individual or is it a syndication?  

I don't believe your're allowed to increase anymore than 10% within a year. 

The 3.5% CPI for Oakland and then the fair market assessment, which you would have to prove would be capped at 10%. 

The property owner is required to provide three things.

1. Proof of the amount of investment
2. Evidence of the return from other investments of similar risk
3. An analysis of the rate of return from the rental property, including any appreciation in the value of the property.

https://www.oaklandca.gov/resources/learn-more-about-allowable-rent-increases

California Law allows rent increases north of 10% if given a 60 day notice however the city of Oakland prohibits this practice. 

If you secured a loan less than 20% down through a private lender your PMI would be automatically eliminated once you paid 20% of the purchase value. Because you have an FHA loan the rules are a bit different. The MIP/PMI is for the life of the loan and you MUST Refi out of it to stop paying the MIP.

I believe the FHA has a minimum of 5 years before you can remove the MIP so you are qualified in that regard.The FHA loan was acquired prior to 2013 since you said it was 9 years ago and Im assuming its a 30 year loan. If this is the case you need to achieve 22% equity on your property or 78% LTV.

Based on the numbers, you currently have 30K in equity which about 20%. Once you achieve 22% equity at 32,340 you can the refi out to a conventional loan. You are so close man congrats!

My advice would be to aggressively pay down that 2,340 you have left to 22% equity and then once you get your conventional loan you will be saving more due to the removal of the MIP. Save that money for 20% down an investment property.

As for your last question, it is possible for an owner occupied but as an investment they usually want 20-25%down. Even if you do the owner occupied route they won't give you that loan with your current FHA still in place.

@Joe Splitrock Ive heard this from multiple experienced investors. Its interesting that they mention this "lifestyle creep" as one of the biggest advantages of being a younger, single investor. Being able to live with less in the present allows you to have more in the future. 

Its hard to put this into practice when things like family get involved, but when you hear this from multiple different sources.. its really indicative of how important this factor is. Stay strong Jarrin! I think you will thank yourself later.

@John Collins Hey John thanks for the info, can I ask where you got the data from?

Hey Joe Im not too familiar with the Frankfurt area but I know that Berlin is great for flipping. There's a sizeable labor force and the population is growing. Coupled with the Brexit situation, its poised to take over London's position as one of the Finance capitals of the world (along with Hong Kong and NYC). 

Outside of Berlin, east German cities probably have the best cash flow potential. When you mentioned 5-15 years before cash flow did you mean for the the Frankfurt area? I would look into cities like Dresden or Leipzig. Typically higher risk but higher reward just like stateside. From what I hear NRW and most of the west has appreciated rapidly and might be due for a correction. 

I recall another guest on the podcast (maybe from Atlanta?) explaining how he was able to carve out a niche in the small to medium local multi-family industry by keeping his business lean and focused. He described how the larger MF' s were being bought aggressively by hedge fund groups and the competition was much less at the smaller end of the spectrum.

Eventually if we are lucky and desire it, scaling to larger MF's would likely have higher margins...at least in my region. You could even take this a step further and say that commercial real estate would have greater margins/more price buffer.

@Jana Cain  Thanks for setting everything up! I know of a couple locations in Pleasanton that rent for 120/hour if we want a more private venue next time.

@Account Closed If only i knew ;)

Im really not sure what neighborhoods in the city but for sure in the South bay, specifically willow glen. This was maybe 10 years ago but that kind of thing was happening not only in the bay but in Vancouver at one time too apparently.

A more relevant scenario to showcase capital (international) pressure on the market would be the classic h1 individual who gathers their family savings from back home and does a syndication deal in the states.