All Forum Posts by: Nash Mittelman

Quote from @Saurabh Dey:

Hi, I am looking to buy a multi-family (my first one) in Bay Area. Can someone suggest which are good areas for appreciation and cash flow? My price range is between 1-1.5M. 

Thank you

I dont' think that you shoudl focus on a specific area, rather just buying a property at a discount, and there are A LOT of good deals out there right now... Getting both right now is possible, but you might have to think outside the box, and I thin the biggest factor for getting both is going to come down to purchasing the property at the right price. Also, you'll want to chat w/ a local lender with niche products w/ good rates that can help the numbers make sense. Historically we see about 5% appreciation year over year in the Bay, which is good compared to other markets. 

You have to be careful, though, because it isn't super friendly to be a landlord in the bay, and if you have a long-term rental, it could be tough to get the renters out when you want to move the equity, and this can bring down the value of the property. Feel free to give me a shout-out if you want to discuss more. 

Are you looking to buy as an investment or primary residence and do a House Hack? Buying as a primary and renting out the other unit is a great way to get both AND be able to utilize loans that require a primary residence and typically have lower interest rates. 

Hi BP! 

Getting to the end of my roof's lifespan, and was wondering fi there were any programs or partnerships that I should be aware of if I were was to add solar whilst replacing my roof? I heard there used to be programs where the solar companies would actually replace the roof for you when adding solar?

I have a duplex so also curious about the nuances of adding solar to a home that I currently live in, but might turn into a rental, or sell down the line?

Thx BP! 

Quote from @James Wise:

Quote from @Nash Mittelman:

BP! 

I'm an active real estate agent and investor in the Bay Area, almost done with the BRRRR book, and excited to get started building an out-of-state investment portfolio. I have some capital and looking into getting started w/ some BRRRRs, ideally multifamily properties (I really like 2 units for lending purposes, yet not super picky). I like Cleveland, Chicago, and Detriot because the price points there could still command some good rents, and also seem good for beginners. The ability to scale a portfolio and recycle the capital is really what has me excited about the process.

I'm curious, though, are BRRRRs still a thing, or has that space/strategy become too crowded? Is anyone still having success getting 100% of their investment out of the property to repeat the process? If so would love to chat. 👍

Also curious about what agents, lenders, or anyone in the BP community sees as a potential pitfall for BRRRs going into 2023 and the shifting housing markets. I worry that if values drop in 6 months the ARV will suffer making it harder to retain 100% of the initial investment.

 I understand that it ultimately depends on the price that you acquire the property for, and having all cash makes for getting some great deals.

Thx BP! 

_Nash Mittelman 

Compass 

www.nashmittelman.com

 Yea dawg, they are getting easier to do now then they were 6 months ago when every seller was getting 40 offers on their property the day they listed it.

 I hear that! There will probalby be some great deals coming up for sure! 

Quote from @Crystal Smith:

Quote from @Nash Mittelman:

BP! 

I'm an active real estate agent and investor in the Bay Area, almost done with the BRRRR book, and excited to get started building an out-of-state investment portfolio. I have some capital and looking into getting started w/ some BRRRRs, ideally multifamily properties (I really like 2 units for lending purposes, yet not super picky). I like Cleveland, Chicago, and Detriot because the price points there could still command some good rents, and also seem good for beginners. The ability to scale a portfolio and recycle the capital is really what has me excited about the process.

I'm curious, though, are BRRRRs still a thing, or has that space/strategy become too crowded? Is anyone still having success getting 100% of their investment out of the property to repeat the process? If so would love to chat. 👍

Also curious about what agents, lenders, or anyone in the BP community sees as a potential pitfall for BRRRs going into 2023 and the shifting housing markets. I worry that if values drop in 6 months the ARV will suffer making it harder to retain 100% of the initial investment.

 I understand that it ultimately depends on the price that you acquire the property for, and having all cash makes for getting some great deals.

Thx BP! 

_Nash Mittelman 

Compass 

www.nashmittelman.com

Yes- BRRRRs is still a thing.  What we are doing in our market (Chicago) to minimize the risk associated with potentially miscalculating the ARV is only going back 3 months & using the average of 5 recently sold, not 3.   Regarding getting 100% of your money back.  While the ultimate goal is to get 100% of our $ out of the deal, we have another goal- Can we hit our hurdle rate (ROI) if we still have cash in the deal?

Example- Looking at a deal now where our objective it to pull $100K out when completed. If the appraisal comes out 10 to 15% below our original projects we may only be able to pull out $70K to $80K.  But we'll still only have $30K in the deal w/ great cash flow. We'll take it. 

 Thanks Crystal! Do you think that were going to see prices decline more in CHI? I have heard that its going to be a good market for buyers in 2023 which makes me a little hesitant to pull the trigger on a property, yet i now that people get pretty good deals during the holidays! :) 

_Nash

BP! 

I'm an active real estate agent and investor in the Bay Area, almost done with the BRRRR book, and excited to get started building an out-of-state investment portfolio. I have some capital and looking into getting started w/ some BRRRRs, ideally multifamily properties (I really like 2 units for lending purposes, yet not super picky). I like Cleveland, Chicago, and Detriot because the price points there could still command some good rents, and also seem good for beginners. The ability to scale a portfolio and recycle the capital is really what has me excited about the process.

I'm curious, though, are BRRRRs still a thing, or has that space/strategy become too crowded? Is anyone still having success getting 100% of their investment out of the property to repeat the process? If so would love to chat. 👍

Also curious about what agents, lenders, or anyone in the BP community sees as a potential pitfall for BRRRs going into 2023 and the shifting housing markets. I worry that if values drop in 6 months the ARV will suffer making it harder to retain 100% of the initial investment.

 I understand that it ultimately depends on the price that you acquire the property for, and having all cash makes for getting some great deals.

Thx BP! 

Ok Kanye. 

Quote from @Adam Bartling:

@Nash Mittelman Ya man jumbos 1M+ typically have need good documentation, VA Jumbo now!!! Woah 0% DP at 1M. 10%DP on 2M oh ya!!!

The cool thing about the ADUs is that 70% of the ADU rental will be used to calculate your income for ability to repay the loan. Keep asking questions for all to learn!

Thanks @Adam Bartling! I wasn't aware that you can use ADU income to repay the loan... What banks/lenders let you do that?

Thanks, @David M.! Any properties/ areas you recommend to get started? Everything in the Bay Area seems like it would be too pricey, as I would likely need at least 25% down. 

Quote from @Adam Bartling:

@Nash Mittelman so there are some options but maybe not want you want to hear.  The programs you talk about, such as the 2-1 buy down, the best way to use that is with seller's concessions so they can buy down your interest rate 2pts for 1 yr the 1 pt the 2nd yr then returning to the agreed rate on yr 3. 

But these are more suited for the owner occupied property.  

The other rental properties will be based on the Debt Service Coverage Ratio (DSCR) Meaning the percentage of the mortgage that the renters cover. It may sound odd but I have a lender who will do a .80% DSCR. That means you are actually bringing in 20% less rent than the cost of the house. ( good option to purchase a home, when lease it up then you go for a serious value add! Then rent at a profit.

As far as interest only for commercial, guys am I wrong?, but I have only seen these options for fix n flip and very capitalized multi tenant commercial properties.

There is not going to be a mortgage crash...the regulations and standards of having true underwriting have changed to buyers must be well able to afford the home.  The Crash came from pushing loans on people that could not afford the home and getting them in Adjustable Rate Mortgages that priced the people out of affordability due to rising payments.

What other questions do you have?

Thanks BP! Also should have mentioned that I am looking to owner occupy, becuase I'm trying to use the benefits of a loan that people use for a primary residence. The spot I'm looking at has an ADU and potential for another jr ADU.

I found one today that had a loan amount of up to 1m, but anything over 1m the rate was like +10% for an income-stated program... or require 20% down... trying to work w/ 10% down... 

Hi BP! 

I incorporated last year, and I don't think my personal income will do me any favors for getting financing (meaning it's low). My business generated a fair amount of income, and my rental property might generate about 1k once I rent out the unit I live in. I also have a fair amount saved up for a DP, and for context I'm looking in the San Francisco Bay Area, where one of the biggest upsides to real estate in the appreciation, so hoping to get something at a discount w/ the shift we're seeing in the market.

I'm trying to take advantage of the shifting market and buy another spot at a discount and hoping to get a loan in the short term and then refi onto something more long-term; essentially, buy at a discount and the refi. Also looking for creative ways to get around the payments equated with high-interest rates; I have heard of buydowns (2/1, etc.) Does anyone have any insights or experience with w/ income-stated loans or have any other creative ways to obtain a loan for buying another spot if my income is low? I would also love to hear this group's thoughts on if an interest-only loan could be the move right now to keep payments low, then refi (if and when) rates go down, and curious when this community thinks that might happen. Any pitfalls or flaws in this plan?

An interest-only loan seems exactly like what caused the 2008 meltdown, and don't want to be a party to another crasssshhhhhh. 

Thanks BP!