All Forum Posts by: Melissa Hartvigsen

Hello @Gregory Saunders,

Bigger Pockets has several calculators to help calculate rent, click the "Tools" Bar. Select calculators, and epending on what type of rental you are considering short term vs long term, you might want to use:

Airbnb

or

Rent Estimator

Other ways to estimate rent:
Short term rentals: https://www.airdna.co/
Mid Term rentals: https://www.furnishedfinder.com/stats
Long Term rentals: https://www.rentometer.com/

You can also do it the old fashioned way, and call local apartment complexes for "comps".  Ask what floor plans they have, how much rent is for each unit, what amenities they include, if they include any utilities in rent, how many new leases they signed in the last 30 days, how many vacancies they currently have, if they are offering any concessions (i.e. rent discounts), etc.

Cheers,

Melissa

Hi @Bradley Bohnstedt

Remodeling rarely gets you more money than what you invested into the project.  Here in the Pacific NW, one of the biggest value adds is replacing carpet with actual hardwood floors (not laminate or engineered wood). A $25,000 cost for a kitchen remodel here might increase your property value by $18,000 to $20,000.

Remodel.com puts out an annual report of what you can expect from your remodel, I pulled this image from their site to help you with your decision:

Hello @Donovan Young!

Lots of good advice so far: I've read Rich Dad Poor Dad and First to a Million and highly recommend both. I am local to the Portland metro and have some additional insights.

When you are first starting out, an investment property that you don't live in may be harder to obtain than a house that you live in due to the capital required. The median home price in the Portland area is $536,000 and Gresham/Fairview is $450,000.

All banks will have higher down payment requirements for investors than an owner occupier.  You may want to consider house hacking, where you live in the property for at least a year (you can still have roommates), then move onto the full rental phase. You will have a more attractive interest rate (1-2% lower than an investor), and a lower down payment.

Example:

Single family house, townhouse, condo
Investor down payment minimum 15%
Owner Occupier down payment minimum 3-5% (Conventional and FHA options)

Two unit (aka duplex)
Investor down payment minimum 15%
Owner Occupier down payment 3.5% (FHA option)

Three - four unit (aka triplex -quadplex)
Investor down payment minimum 25%
Owner Occupier down payment typical 3.5% (FHA option)

I house hacked to build my portfolio in the Portland Metro (I own property in Hillsboro, Beaverton, and Gresham), and can say from experience it was easier financially to save %5 for my down payment, and move every few years than it was to wait until I have 15-25% for a single down payment.

We also have some exceptional 1st time home buyer programs specific to Oregon that can help with down payment funds for properties you will live in. There are zero incentives for investors.
For example:
Gresham Welcome Home - offers up to $40K in down payment assistance
or

Oregon Bond w/ below market interest rate or cash grant for closing costs.
Rate Advantage 6.125%, Cash Advantage 6.75% (also gives up to 3% of purchase price for closing costs).  Normal rates are 6.875% today without the Oregon Bond.

Please send me a PM is you are interested in being connected with a local lender who can talk to you about these options.

Cheers,
Melissa

Hi Joe,

Banner Bank has client trust accounts. I have a fantastic contact at a Branch in Beaverton. Send me a PM if you would like their contact information.

Cheers,

Melissa

I think it is a great idea to fill the gaps in your knowledge. The degree will cost you a good chunk of money, and since you already have some success with your business may not see the return on your investment.

Harvard has several online business courses for free: https://pll.harvard.edu/catalog/free

Google has free certifications including project management: https://grow.google/

I know that some other large universities offer the option to Audit a class for free, so you can learn what the students are learning, but you don't get a degree at the end. Edx and Coursera also have directories with more free options. 

Hopefully these help you find the courses you are looking for. :)

Melissa

Hello @Kenn Mccomas,

Whether or not to buy multifamily up to 4 units or a single family is an individual decision. I think you should go through the pre-approval process with a lender, so you know what you are working with. Then use the BP rental property calculator on a few properties in your area to get an idea of what your returns will look like. This can help you narrow down where to focus.

In general, here are some things to know about the difference in lending on SF (single family) versus MF (multifamily).

Single family home: depending on the loan type and property location you have may the following down payment options available to you:

0% VA loan (if you are eligible past military service, or close relation to a family member who served)

0% USDA loan (must be in a rural area, and have stricter debt ratios than other loans)

3% Conventional loan (down payment amount may be higher depending on the debt ratios)

3.5% FHA loan

Multifamily 2 units:

Conventional loans, generally 15% down, unless you qualify for Home Ready 5% down (Fannie Mae product with strict income guidelines. In my market most clients make too much money to use this.

FHA Loans, 3.5% down

Multifamily 3-4 units:

Conventional loans 25% down

FHA Loans 3.5% down payment if the property meets self-sufficiency standards set by the lender. This means that the units you are not occupying must cover the mortgage. In my market, I have never seen a triplex where the property meets the self-sufficiency standard. Occasionally a 4-plex will meet the self-sufficiency standards. What that means is you may have to put more than 3.5% down to acquire the 3-4 unit property.

I think you should start by interviewing lenders and realtors to find a good fit to help you on your journey. The BP "Build Your Team" directory is a great place to start. Look for folks who have experience investing in the way that you would like to, and experience helping clients invest as well. They can guide you and give you great advice. 

Best wishes,

Melissa

Hello @Cara Fazio

I've rented to international students and foreign nationals with work visas.  Here is what I do:

1. Try to verify a rental reference from their home country. This may not be possible due to language barriers.

2. I verify their visa status. I.e. Does their lease with you fall within the approved visa timeline?

3. I also verify assets. For graduate students, I require bank statements to show that they can cover the entire rent for the duration of their stay.  For foreign nationals with work visas, I require bank statements, and their job offer letter (I require that they make 3 times the rent in monthly income).

4. I usually double my security deposit to offset the risk since there isn't a credit history or rental history to gauge my risk.

This has worked well for me. Good luck!
Melissa

Hello @Trevor Neale,

Conventional loans used to allow 5% down payment on owner occupied property with up to four units. Lending guidelines changed a few years ago and that is no longer an option. 25% down would be required today.

If you have enough equity in your current triplex to refinance to a conventional loan, then you may be able to take out an FHA loan on the new three or four unit so you can do a 3.5% down payment. As far as I know, you can only have one FHA loan at a time.

If refinancing is not an option for you, then you may have to look at private, lending options, and “non-QM” loans. These come with higher interest rates and you will need a broker who can offer you those loan options. You won’t get them at a typical bank or credit union.

Cheers,

Melissa 

Hello @Amanda Copeland,

Bigger Pockets has a rent estimator calculator, excellent for long-term rentals. Even if you can’t find comps with heat and parking included, it should give you a good baseline of what to charge.

In my market off-street parking is worth $25-$50 a month, if it was a garage it would be worth $125 to $150 a month.  And easy way to identify what the value of parking in your area is to contact large apartment complexes and ask, or look on their website.

When factoring in price as a mid term or short term rental, the Bigger Pockets Airbnb Calculator will give you a good starting point. You can also cross reference listings in your area that you find on VRBO, Airbnb, and Furnished Finder. You should check the calendar availability of your competitors. If their calendars are open, that is not a good price. If they are booked out for a couple of months, it’s a good indication the price is correct.

In addition to online booking platforms you can advertise directly with local employers, such as hospitals, or if you are near a university directly with graduate programs.  There may be a need for insurance housing in your area as well.

Once you publish your advertisement, if you’re not getting 5 to 10 leads a day, you have priced too high. If you’re getting more than 20 leads a day you are priced too low. Adapt and adjust your prices until you get lead flow.

I don’t think you should give up and sell without trying to rent out the 2 bed 1 bath. This is a property that you live at, so there is a great benefit to you in holding the property long term. The property will appreciate, you’ll have the benefit of paying down the mortgage, and overtime the rent increase. Try to use the Bigger Pockets calculator to see what this property can do for you in the future.

Cheers,

Melissa 

 You are most welcome! I am glad to help and wish you much success. :)