All Forum Posts by: Anthony Thompson

Jose, while I would "never say never", generally my experience is exactly as you describe - lenders don't want to go above 70% loan to value (LTV).

It's generally the case that even in rising markets, the market doesn't move enough in 2 years for you to be able to get much (or any) of your down payment back through a refi - assuming you paid market value to begin with of course.

(If you paid below market, then obviously you have some additional built-in equity you may be able to access within a year or two after closing, in fact that's a strategy I've used a number of times.)

Generally, if paying market value even if the market trends upward the whole time, just for planning purposes I wouldn't plan to be able to get any of your original down payment back through a refi within the first 5 years.

All that said, it's possible you may be able to find a private lender who might go higher than 70%, maybe if it's someone you already have a relationship with. I haven't seen it, if anything I've seen a lot of private lenders have a lower LTV (like 65%) than banks, but that doesn't mean it's not out there.

When you deal with people instead of institutions, sometimes it's possible to negotiate a better deal due to the relative desires and negotiating strengths of the parties. This is true of buying houses as well as getting mortgages by the way, in fact some would say it's the entire basis of wholesaling.

Bruce, I think in this case you're probably best contacting a mortgage broker rather than a specific bank or credit union. Mortgage brokers are familiar with a variety of different loan programs and sometimes have connections to private lenders as well. It's quite possible some of those programs/lenders might be able to do what you're asking.

Michael, first of all welcome to Bigger Pockets and congratulations on your deals so far and the ones you're moving forward with!

A few weeks back there was a thread about an accountability group for Mass & Rhode Island that you might be interested in, if you're reaching out to like minded individuals in the New England market.

Eric, I think you're going to be hard pressed to find someone who's going to say "no, don't get a lawyer".

However in my experience it's common in smaller #s of residential units, say up to 10 or 12 units, to use the "standard" (RIAR) multi-family P&S since it does cover the bases for residential rentals.

The fact that the financing is "commercial" doesn't necessarily affect the rest of the deal, other than your taking into account different loan terms in your analysis of course. But whether it's 4 units or 6 units, you still need to look at all the leases, make sure it's up to fire code (or that seller will bring into compliance), etc.

Of course, as a not-attorney I could be completely wrong about this. And if you have the money or time, it's always better to have an attorney review or prepare things - if you have the money or time, which depending on the deal you may not (as Ron Legrand said, "you can't steal in slow motion"). 

However I used the RIAR P&S to buy a 6 unit and as far as I can tell, the deal went through pretty much exactly like the 4 unit we'd bought a month earlier, the sky didn't fall on us, etc. YMMV, don't blame me if I'm wrong, yada yada yada :)

Also remember that one of your realtor's main concerns might be her/his liability and it's fairly standard in Realtor pre-license classes to teach that every third word out of an agent's mouth should be urging the client to consult an attorney, for exactly that reason. Which is not at all to say it's bad advice, just to consider what one of the motivations behind it could be.

Steve, welcome to Bigger Pockets!

Besides the great resources you've already been reading, for a different perspective you might check out Mr. Money Mustache (mrmoneymustache.com).

I'm not 100% in MMM's camp either but it's a worthwhile alternative viewpoint to consider.

One other app I've heard some people recommend, again this is mainly an agent thing for if you already have MLS access, is something called RPR.

From what I understand it allows finding comparable properties and pulls up some of the tax information as well. I haven't used it myself but a few people have mentioned it now so I thought I'd pass it along.

Octavian, at one point I'd installed a bunch of real estate apps, but like most of my apps, I found that I rarely used them and eventually forgot about them.

About 6 months ago I upgraded my phone and don't think I remembered to install any of them on the new phone, and completely forgot about them until you mentioned them.

For agents, the RI statewide MLS recently switched from Fusion to Matrix, and I think part of the reason for switching was a better app/mobile experience, so that's probably one of the few apps I could recommend.

Other than that, maybe Google Sheets or Numbers for iOS - spreadsheet apps - would be useful.

One other app I could maybe recommend would be Venmo for payments, as some tenants and contractors have asked about using that. Similarly if your bank has an app that does mobile deposits that's probably worth looking into.

There probably are apps like you're talking about and I'm just unaware of them, so it would be nice to see what others have to say.

I will say that there are some big property management solutions such as Buildium and Appfolio, that probably have apps which tie into their system and provide some of the tenant and building/portfolio tracking that you're asking about - but those systems as a whole aren't necessarily cheap, either.

Personally, I just make sure to carry around at least one envelope - so I can always do "back of the envelope" calculations when necessary :D 

I'm not sure I'm reading the question correctly because I can't see any cons.

As long as you can personally afford it since you'll be living in it, which the lender will ensure of course (that you can afford it), I think it's a great way to start out in real estate.

As long as it's habitable (to your standards ;), you'll be able to really "get your hands dirty" with some repairs (even if hiring some out) but without the stress of having a tenant bothering you asking when the repairs are going to be done.

Again, maybe I'm not understanding, but this seems like a great & classic "sweat equity" way to get started. If you're up for the work, it should make a great start.

One minor thing though, I would recommend living in it for TWO years before renting it out due to the fact that you can sell it and keep any profit (up to 250K for a single person or 500K for married) tax-free, as long as you've lived in it for 2 out of the last 5 years.

There are several good options. For Pawtucket, one you should consider is Lyon Property Management.

Of course, as with any referral, if you contact them please mention where you got the referral from (me).

@Robert Wodogaza I completely agree, I find myself doing the same head scratching that I did in 2005-2006 where I say, wait, they paid how much for that property? How can those numbers work?

What's the saying, history doesn't repeat itself but it rhymes? :)