All Forum Posts by: Ryan DiCanio
Ryan DiCanio has started 9 posts and replied 43 times.
Post: New Investment in Aurora, IL
- Aurora
- Posts 44
- Votes 24
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $266,000
Cash invested: $15,000
My goal of 2021 was to obtain my first investment property and I can successfully say I have done that with this duplex in Aurora! I have updated the following to the property:
- Ripped out carpeting and installed Vinyl Flooring
- Refinished all bathtubs and sinks from a deep green to a bright white finish
- Fresh coat of eggshell white paint and high gloss on the trim
I have learned so much from this first property that I wouldn't have learned without the experience of just jumping in! I can't wait to see where my real estate investment journey takes me.
What made you interested in investing in this type of deal?
It was in the area I liked and the numbers worked out very well for my first deal!
How did you find this deal and how did you negotiate it?
I found this deal from Real Estate investor on the MLS.
How did you finance this deal?
FHA Financing with the help of gaining a sellers credit.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I would highly recommend using Paul de Luca as he is a superb realtor, as well as Cross Country Mortgage for a primetime lender! They helped with making this whole process easy for me!
Post: Mediation for Zoning Issue - FHA Loan
- Aurora
- Posts 44
- Votes 24
Hey @Tim Herman,
To my knowledge, the issue is that for a FHA loan 100% of the duplex has to be able to built within the same zoning parameters that it is in right now.
The appraisal I got said that only 50% of the duplex would be able to be rebuilt, but according to my lender to obtain a FHA loan 100% of the duplex will need to be rebuilt within the same zone.
Thats how I understood it.
Post: Mediation for Zoning Issue - FHA Loan
- Aurora
- Posts 44
- Votes 24
Hi BP Community,
I am currently in the process of closing on my first multi family property, but the issue I’m having right now is if more than 50% of the duplex was damaged the zoning would have to be brought into compliance.
Duplexes were a permitted use at the time the permit was issued for the construction of the duplex, as well as other duplex use properties on that same road. The current use is legal and in compliance with the zoning ordinance in its current condition and occupancy.
I am acquiring an FHA loan which is whats making getting the loan approved a tricky one because of the zoning issue.
Are there any steps / actions either I, my lender, or attorney can take to mediate this and be able to close on my property?
Post: Why Sellers Are Not Accepting FHA
- Aurora
- Posts 44
- Votes 24
Hey Bigger Pockets Community,
I am running into the issue where I find properties through my analysis that I am interested in, but the seller is not accepting FHA loans from buyers. I have 2 questions regarding this:
1. Why does it matter to the seller whether I have an FHA or Conventional loan?
2. What can I do to mitigate the situation other than trying to switch to a conventional loan?
Any and all thoughts would be appreciated!
Post: Am I overcomplicating my analysis?
- Aurora
- Posts 44
- Votes 24
Originally posted by @Brent Coombs:
Originally posted by @Ryan DiCanio:
@Andrew Kougl so my plan as of right now (but obviously could change throughout my education process) is to house hack again after this house hack. I would keep the my first property for the cash flow while living in the next property (that is why I don’t have a PM expense). Looking for residential multi family homes.
Hope this helps!
Your logic escapes me: Why won't you need a Property Manager after you stop living in your house-hack? I won't plan on moving far away when I want to move into my next property, so I would manage my new property and my cash flowing one. Not everyone hires a property manager out of the gate. Once I feel I am at the point where I can't personally manage all of my properties, then I will look to attain a PM.
ie. You should allocate monthly expense (~10% rent) for a Property Manager for all investment properties, even if you think you want to Manage them yourself. You make a good point. Even if I am managing the property myself I should still account for this expense down the road.
It'll save you from financial-miscalculation grief later when you realize you do need a PM.
Secondly, you earlier mentioned that Water isn't sub-metered. Is that always the case where you want to invest? In regard to the property I am putting an offer on right now, that is not the case. Now that isn't to say it is always the case, but for the property I was referring to in my original post it is.
Thirdly, if you're already buying/hacking multi-family from day one, is there any real need to move each time you want to do the same again? The need is so I can rent out the room I am living in and gain cash flow from that property. Then move into my next house hack, still have tenants paying a majority of my mortgage, while now having additional cash flow every month.
ie. Why not buy each subsequent dup/tri/quad-plex as pure investments from day one? That takes a lot of capital that I do not have right now starting out. You are only allowed one FHA loan at a time, so I would need 20% on an additional property. Or find a partner - which I will be looking to do - to fund my next property while my first property is still under that FHA loan.
ie. You only get one primary mortgage at a time anyway, right? [If I'm wrong, tell me]. You do not have a set limit of the amount of mortgages you can have.
ie. Have you taken into account from day one that your investments will not retain primary mortgage Interest/terms status? I have not, but in my analysis I have my interest rates higher than the average of what they are now.
Fourthly, as stated by others, your vacancy, repair and capex should be more conservative. Yes, I have agreed on that topic and have adjusted my numbers accordingly. I currently am doing 10% capex, 8% vacancy, and 5% repair.
Well done for asking. Good luck...
Thanks for bringing up those topics, I hope my responses made sense!
Post: Am I overcomplicating my analysis?
- Aurora
- Posts 44
- Votes 24
@Patrick Flanagan that is exactly how I've changed my mindset! I personally learn the most from doing / experiencing, reading and educating is needed but can only take me so far. So I appreciate this and I will be implementing your advice moving forward.
Post: Am I overcomplicating my analysis?
- Aurora
- Posts 44
- Votes 24
@Ian Walsh you bring up a great topic that I would love to pursue further and become more knowledgeable on.
Can we connect to discuss this further?
Post: Am I overcomplicating my analysis?
- Aurora
- Posts 44
- Votes 24
@Justin Sullivan you hit the nail right on the head with what I was trying to articulate!
And I agree with you 100%, I feel as the more analysis that I do on multiple properties, the more comfortable I will get the process and the more confident I will become.
There’s a saying that I believe in which is: “Work ethic and knowledge mitigates fear.” So essentially the more you do something and the more knowledgeable you become of that topic, the less fear you have of jumping into an opportunity.
Post: Am I overcomplicating my analysis?
- Aurora
- Posts 44
- Votes 24
@Eric Bilderback I love that advice, thank you Eric! I have a saying that is similar: "A year from now, you are going to be happy that you started today"
Post: Am I overcomplicating my analysis?
- Aurora
- Posts 44
- Votes 24
@Michael Plante the only reason I say “too conservative” is that a lot of advice I’ve been hearing to newcomers in the real estate investing business is to get your foot in the door. So I was saying as everyone has their own subjective numbers in regard to capex, vacancy, etc. Could have numbers that are “too conservative” be a weight holding you back from ever getting in the game?