All Forum Posts by: Michael Dumler

@Josh Phillips you're correct, most conventional loans require 15% down to purchase an owner occupied duplex. Is the lisitng agent saying the duplex is not eligible for FHA? If so, this is a very lose rule. More likely then not, the seller is looking for a stronger offer becuase the guidelines to qualify for FHA are strict when accounting for the conditon of the duplex. Since you are already under contract on the property, I would consider sending an amendment that you as the buyer will be changing your financing terms from conventional to FHA. The seller will most likely push back, but they may also be in a position where they would rather close on the deal then bring it back on the market. Hope this helps!

@Brahmjot K. picking a market to invest in is entirely dependent on your investment strategy and what you consider a good deal. Nevertheless, out of state investing is all about having a resourceful team to work with that will bring you solid opportunities. David Greene discusses this concept in depth in his book, "Long-Distance Real Estate Investing." I highly recommend you take a look at that before considering jumping into a completely new maket. Briefly, the book reiterates the importance of developing your core four (real estate agent, lender, contractor, property management) when beginning to invest out of state. I will say, if you're seeking "affordable housing" then generally you're midwest and south east states are a good starting point. Every agent/investor on BP is going to advocate their market, but at the end of the day if you have not devised your strategy or set systems into place, regardless of how great the market is you will see little results. Hope this helps! 

@Devwin D. Rankins Sr. you bought the property for 10k, needs 60k in rehab, and will rent for $1,100 a month?! This sounds like the holy grail of all deals! Most investors forget that part of completing a successful BRRRR deal is indeed buying the property with cash first. As far as financing the rehab, you have a couple of avenues. First, any hard money lender that verifies your analysis and confirms your numbers will have no issue lending to complete the deal. I would reach out to several hard money lenders and shop around for the best rate and terms. After completing the rehab with a HML, refinance and pull your money out to pay back the lender. Second, and maybe a little more work on your end, network with other investors to raise private money. Both of these options will cut into your ownership/equity, but at the end of the day you need them to complete the deal. Hope this helps!

@Joseph Ellengar personally I have never used Zillow's rent estimates as a resourceful metric. If the rent estimates are anything like their proposed sale listings, then more likely then not the numbers are inaccurate. Zillow claims to have made improvements in their algorithm, but take that with a grain of salt. To successfully pull lease comparables, I advise sticking to the mls or another site like Rentometer which tends to be more accurate. I would also reach out to several property management groups, as most companies will give you free market analysis. Hope this helps. 

@Davon Johnson Investing out of state (remotely) is all about implementing a successful strategy and developing your core four (RE agent, lender, contractor, property management, etc). I would first advise that you narrow down on your criteria and stick to a specific investment strategy as well as one or two niched markets. Newer investors make the mistake all the time of trying to broaden their net into multiple markets, I understand the logic, but the strategy is quite counterintuitive. Sounds like you're on the right track as far as networking with real estate agents. I also recommend you work with an agent that either has rentals or is consistently working with out of state investors. If it's cash flow you're more focused on, generally your midwest and south east states are more favorable, but to reiterate, if you don't have a resourceful team assembled, I can almost guarantee you won't have much success. Hope this helps! 

@Yadira Gutierrez to be upfront, all the questions you are asking should ideally be addressed before taking a trip to view the properties. For instance, "what to look for in a community?" The question is entirely dependent on your criteria and if you are seeking A, B, or C class subdivisons. When you say your scouting trip, does this mean you are traveling out of state? If so, I would be mindful of your time and energy. Have you analyzed the properties and determind that they meet your criteria and cash flow accordingly? My overall check list when viewing a property consists of looking for major red flags, such as, damage to the roof, foundation/structural issues, holes in the wall, water damage, etc. Moving forward, I highly advise that you get crystal clear on your criteria before making the trip to view properties. Do you mind sharing your strategy to follow? Hope this makes sense and helps! 

@Troy Ronald regardless of where you decide to invest, you'll see little results unless you have a resourceful team assembled (real estate agent, lender, contractor, property management, etc.) I advise that the first actionable step all newer investors take is to simply network with experts in the industry. Furthermore, if you have your team assembled and you've narrowed down on a specific market, do not try to broaden your net and jump into other markets. I understand the logic of the strategy, but the concept is quite counterintuitive. I see newer investors make this mistake all the time, and therefore never close a deal. Best way to network with experts in the real estate field? BiggerPockets is a good place to start. I also recommend joining your local REI group and other online real estate platforms. Hope this makes sense and helps!

@Brian Lee awesome to hear that you are looking for a house hack deal. With limited inventory, the one thing I'll note is that 2-4 unit on market deals in the areas you have mentioned are fairly difficult to obtain. More often then not, you are usually up against cash offers that are willing to go 15-20k over asking. I advise most investors that are looking to house hack to identify properties that have in-law suites which can either be used as a long term rental or potential AirBNB. There is also rent by the room, which would be more hands on, but that is entirely dependent on your strategy/criteria. I would also add Marietta and the surrounding areas on your radar as well. Hope this helps!  

@Samuel Persson I have not heard of this specific cash-out refi rule, in fact, most investors use this strategy all the time to grow their rental portfolio. How much equity do you currently have in the property? I know to successfully utilize a cash-out refi you are required to have at least 20% of equity in your home. The only thing that comes to mind is that there may be a clasue that says you have to remain in your current home for a certain period of time. I would speak to other lenders and see if you can get more favorable terms elsewhere. Hope this helps!

@Alisa K. congratulations on your recent purchase. The original amount you paid may or may not reflect the appraised value of the home. I assume you did your due diligence when making an offer and assessed other comparables to gauge an appropriate asking price? Whether you plan to use a conventional cash out-out refi, HELOC, or home equity loan, an appraisal will have to be ordered to determine the value of the property. The six month seasoning period you are referring to is only applied to those who have a previous mortgage on their home. In your case, since you bought the property all cash, you can take your cash out of the property immediately (delayed financing). There a certain rules/restrcitions on delayed financing that I would look into more thoroughly. The 80% or 85% LTV is a general rule used by most lenders when refinancing a property. You need to shop around and determine which lender will offer you the best rate and terms. Hope this helps!