All Forum Posts by: Nathan Grabau

MF in central Iowa. I have been able to get multiple deals for that amount of money. I like Story County, Iowa because it has good cashflow but also is not an area that has negative population growth like Cincinnati or Flint. My realtor is also an investor/ property manager so he has made out of state investing very easy. If you send me a message I am happy to refer you to him! 

What are the derogatory marks on the credit report? High usage/ hard pulls would worry me less than missed payments or unpaid bills. If you are concerned but still want to rent to them, you could ask for first month, last month, and a deposit as signing to minimize your risk. Calling their 2 or 3 previous landlords is not a bad call either here. 

@Nikolas Komatina changing the numbers on paper before you get the deal will not change the outcome of the deal. I would hold your numbers where they are. If you need cashflow today, and cannot afford being in the red initially from a monthly cashflow perspective, there are other markets that do cashflow. On the extreme end of the spectrum you have places like Flint or Cincinnati that yield 20%+ cash on cash returns. I have avoided these markets because I think their long term population losses will continue to lead to a shrinking tenant pool and below average rent/ value appreciation. It is still possible in some other mid west, ag(ish) based areas, like Ames, Iowa(where I am invested) to get cashflow on deals day 1, but not have areas that's population is decreasing. If you want to contact me, I can put you in touch with my realtor and property manager in Ames. I have been able to get deals done for under 30k down that cashflow about 8%+ currently. 

I am not a lawyer and this is not legal advice, but in Colorado buyers can sue a seller to perform on a contract they have agreed to. Typically, once a home purchase goes under contract, everything in the contract exists to protect the buyers and the seller is just along for the ride. You could try to ask if you can back out or negotiate a fee to back out of the deal with the buyers. I would mentally be prepared for this fee to be at very least 1% of the property value, but they could just let you back out. They could also tell you no and force you to perform. 

HELOC is the right move on a sub 3 rate. One thing that people do not realize is that when you refi into a higher rate, your amortization calendar gets worse too. You actually pay less every month towards principle.

A 200k 30 year loan at 3% will have a payment of 843.21, in the first month, 343 goes to principal 

If you were to cash out 100k, taking the loan to 300k at 6%, your monthly payment jumps to 1798, and even with the higher loan and payment, your principal on your first payment is 298, $45 lower

This is what make's the HELOC a no brainer for me. Even if the HELOC goes to 9%, on interest only for 100k this is 750 a month. When you add the 843 to 750 you get a monthly payment of $1593 total, $200 cheaper than the 300k 6% loan, and you are paying down an extra $45 a month

I have spent some time researching other major areas in Ohio, and it seems like everywhere but Columbus is cheap for a reason. If you buy the duplex for 200k as an investment property, you will have to put at least 40k down. With that 40k on an FHA loan, you can get a 3.5% down loan and buy a 1-4 unit property with a budget that is much larger than that.

Outside of Ames, Des Moines, and Columbus, I have yet to find a major population area that has reasonable cashflow but is not having a decreasing population. Columbus is going to be more expensive than the rest of Ohio, your down payment will be about a sixth of what an investment property is if you buy a house hack. It could potentially leave enough cash on hand to do both.  

6 months out in Denver you might be able to get a heloc on the property to get some more cash to use. Do you know what your current LTV is? Did you have to go over asking when you bought it? Quorum has a 90% HELOC that might be able to get you some funds. My experience with ADU's is that they generally are more so a cashflow play than appreciation, and tend to not increase a properties value by nearly as much as they cost. This is not bad if you can turn it into an airbnb or a house hack, but most of the time it will be hard to recover the money you spend upgrading it. In this kind of a situation, I think that some combination of house hacking and buying more houses that are rented by the room as your primary each year is your best course of action to help grow your portfolio.

Doing renovation work on your house too seems to be the best return on equity strategy of the two choices! 

Depending on how far out your closing date is this could be hard. How soon is your closing date? Are you trying to close on a loan for a property that will be difficult to get traditional financing on because of its condition. I would recommend contacting your realtor if your loan objection deadline is soon as this will at least allow you to recover your deposit. 

Hi Shannon! I am a real estate agent in Longmont, Colorado and I have been house hacking for the last 5 years! I house hack by the bedroom, which is not bad at all if the house is laid out correctly! If you want to send me a message we can sit down and come up with a plan to get you where you want! I have been able to use the equity in my house over the last few years to buy 3 more multifamily properties out of state! 

This seems like you are being fleeced pretty nicely here. Including my insurance, I have about $100 a month in desk fees, then a 64/36 split up to 18k, then the split goes to 0, which resets every year too. Coaching is 10% but only on the first few deals. With what you are explaining I would also check your contract to see if you are required to pay a minimum to the brokerage regardless of what you hit. If you would like me to put you in touch with a Keller Williams Office in your area, let me know. There is no shame in changing brokerages, especially if you feel like you got a raw deal.