All Forum Posts by: Michael Albaum

I'd look to rent out your current property and purchase a duplex, tri or quad as a primary with the use of an FHA loan. You can get into the property for little money down and can start to cash flow it nicely. This will help to add to your DTI which will make you a more competitive borrower in the future. Good luck to you!

Hey Nathan, I have them on any property that the insurance company will cover. It's around $500/yr/property and if you have it for 5 years that's $2,500 and you can bet you'll have at least $2,500 in misc repairs over that time frame. Of course, your warranty is only as good as the company issuing it. I've found my fair share of terrible companies that tell you they'll cover everything until it comes time to file a claim, and then specific failure mode is excluded from the policy. I've found the more policies you have with a company, the more leverage you have when you threaten to cancel all your policies if they fail to pay the claim. I've had my entire AC repaired for my $45 deductible. 

Just make sure if you have a property manager in place that they're willing to work with the home warranty company, as it does usually add an extra step in the repair process.

I'd also look at the lifespan of your major mechanicals and judge the need for the policy based on them. Obviously the older the mechanicals, the more likely something is to fail. Good luck to you!

It varies from lender to lender so ask around but many want to see 2 years of w2 income. I’ve heard chase lending to people with less work experience though. Best of luck!

Pick the best paying one. If you could find a gig in the real estate arena that could be a plus but you should start gathering as much cash as you can for a down payment

Offer to pay her directly for the property. See if a few thousand dollars in the mail would change her mind. Cash for keys.

Best of luck!

Hey Adam, its relatively cut and dry depending no what times of transactions you're working on. In the SFR space, there really shouldn't be much in the way of additional legal and accounting costs. Sure, you may need to file a few extra forms, but it's really not rocket science and any half decent CPA should be able to do it for you for no more than a few hundred bucks.

I always account for the following when UW deals:

- Property taxes

- Property insurance (including an umbrella policy)

- Property management monthly fee

- Property management re-lease fee (I assume I have a new tenant move in each year)

- Owner paid utilities (if any)

- Maintenance and repairs (for a SFR, I assume between $75-100/mo)

- Capex reserve (depending on the condition of the major things in the property, this will drive cap ex reserves)

- Turn reserves (I like to have at least $750 in the bank for a turn)

Other than that, depending on whether or not a property is held in an LLC or not, I may add an additional LLC fee of $800/yr (since I live in CA) and I will also usually throw in an additional $200 in accounting expenses. The nice thing is that as I grow my portfolio, the LLC fee and accounting gets split up amongst multiple properties so on a per property basis it becomes less expensive.

Hopefully this helps, but feel free to reach out with any additional questions. 

Hey James, are you able to qualify for financing on your own? If so, you should look into construction loans. If you can't then you should explore hard money loans. You could also look to find money partners who are looking to earn a return while you do the work. 

Best of luck!

Hey Oscar, thanks for asking the question and seemingly being open to honest feedback. You should definitely look for a better job that is more consistent. Most lenders want to see consistent employment as well as significant reserves in cash in the bank before they will lend to you. 

You can always go the non traditional route and find money in other places, but until you have a proven track record, that can be tough too. Best of luck!

Hey Simon, welcome (potentially) to the MF commercial space. Qualifying for commercial financing is actually easier, in my opinion, since the lender will be looking more toward the property itself to carry the debt service, as opposed to you as the individual.

The biggest difference you'll see with commercial products are in the terms. Typically they are amortized over 25 years, as opposed to the traditional 30 years with residential. Additionally, most commercial loans that I've seen and used have a shorter fixed term, i.e. 5 or 10 years. After that period the loan adjusts to whatever prevailing rates are. And just like in the residential space, the longer the fixed term, the more expensive the interest is (typically).

I've worked with US Bank a bunch and they've been pretty great to work with and aggressive on pricing. 

I'm sure there are tons of webinars here on BP that talk all about how to run the numbers on a MF building. It's pretty similar to SFR, but obviously there are just some additional line items. Let me know if you need some more help!

Cheers

Just closed about a month ago and it’s in camp Washington. The commercial space is getting rehabbed firstly so my PM has an office onsite. Then we’ll hit the residential spaces