All Forum Posts by: Nathan Grabau

I have used my primary residence, that I house hack, as the mailing address for all of my properties. 11 MF doors, and a MTR and no issues yet! This seems like an expense that does not help you, and just forces you to drive somewhere to get your mail. 

You can probably find a portfolio lender that would let you use the income since it will show up on your 2022 taxes. I would contact @Grant Schroeder, he has a product that allows people to only have to put 10% down with no MI on 1-4 unit investment properties. I am assuming that since you do not have 2 years worth of income from it, and no current income, that it would be really hard to get this conventionally underwritten. 

Management is a brutal business, but they are the ones who signed up to by PM's. With the 2 vacancies are they listed on websites like apartments.com or zillow? Have they recommended a price cut? If they are listed publicly and are not moving, they are likely over priced. We are seeing rents come down in some places. 

That being said, a lot of PM's just totally suck, and it is very normal to move on to yourself or a new one. I am very happy with my PM, but I know that is not the norm. 

Their fault: No listed online, slow response time to issues, expensive repairs, not telling you to cut the price

Your fault: Not cutting the price when they tell you, buying properties that are run down and expecting a low maintenance expense, buying properties in crappy neighborhoods and expecting good tenants

I do not have enough info to figure out which category this falls into, but this would be how I would determine whether its a property issue, a you issue, or a them issue. 

There is an argument here to be made that they are compensated for Wednesday-Friday's rent, which should not be a big hit for you. Do you require renters insurance in your lease or do you just highly recommend it? If they believe they have other costs they should be compensated for, I would tell them to open a claim with the renters insurance they are obligated to have per your lease. 

You also could run into some state specific issues. If you are in a generally landlord unfriendly state (think like CA or WA), you probably have extra legal requirements you have to follow here. 

You could also ask for receipts of the things they had to pay for when they were displaced, though this seems pretty generous to me.  

This is market specific. I do not expect much appreciation out of my properties in Iowa, but I do expect and underwrite with more appreciation for my Colorado properties. Housing supply, historic appreciation, and how desirable an area is(population change) are the primary things I look at to determine how much appreciation I expect. 

I have a property in Colorado that is an MTR that cashflows about $500 a month. It is worth 625k, and if its long term appreciation is 4.5%, which is very reasonable in Colorado, that is over 2k a month in appreciation. For me, that is better than a similar property with 1-2% historic appreciation, but 800-1000 in monthly cashflow. 

This really depends on your strategy, but generally, you exchange cashflow for either: appreciation or time(think STR or rent by the room).

Leasebacks and post occupancy agreements are very common. In Colorado, if it is going to exceed 30 days, a lease that is separate from the sale of the property is necessary. 

Some things to think about:

If you want to do this, you are reducing the buyer pool, investors know they are only competing with each other because no one can buy the home with a primary home loan if you are going to live in it for more than 90 days. This will negatively impact your sale price. 

You also have Realtor fees and closing costs if you sell. If you sell straight to an investor they are pretty much going to give you a cash price that reflects these fees. When I underwrite exits, I assume that I am going to pay 7-9%, between: realtor fees, closing costs, concessions, and inspection items, and that is if you price competitively. If you do not price competitively, I would assume you will take a larger haircut. 

I would make sure that you have a plan to redeploy the capital. If you sell, you are losing the foothold that you have on your current property, which is something I would not recommend, but run the numbers and see if it makes sense. 

I interviewed with eXp and then a few KW branches and ultimately decided to join the NoCo KW Empire. All of the NoCo franchises are jointly owned. As a part time agent, I have been very impressed with the space and flexibility I get when I need it, but also the support that is readily available when I need it.

If you send me a message I can get you connected with our team, and I can share our calendar. All of our trainings are open to anyone who wants to come, because we are confident that anyone who attends will ask "Why isn't my brokerage doing this?" 

I think this is pretty event specific and different people are prepared in different ways. That is a common question though, when we saw things like the FTX collapse or the Evergreen Defaults people asked how far it would spread. I think about the 2008 crash, the fundamentals of the RE market were bad, and it was not a contagion issue as much as an oversupply issue. 

I think with regards to the speed limit issue, it is not that everyone wants to go slow, but everyone is forced to by a limited number of people. 

The 6 percent interest rate seems low for an investment property with today's rates, so I would be prepared for that to be higher. 

If this deal is in Tampa, it is great. If it is in an area with a declining population like Cincinnati I do not think there is enough meat on the bone. 

I would walk into some local banks and ask to talk to someone about lending. You sit down, ask them about what they are looking to lend on, chit chat with them, then I would share your story with them. There is a reasonable chance that after some no's you will be able to find one that offers cross collateralization, this is the process of essentially using the home you are currently in's equity as equity in a future deal, that if you defaulted on the new property, would cover their costs to foreclose on you. It is a unique situation, but local banks are having a really hard time getting money out the door with how high the rates they have to charge to make money is. 

The small local banks are also going to be less strict about your source of income, and care more about confirming that it exists and is reliable vs making sure it fits into a small box.