All Forum Posts by: James Lusk

Cameron Marmon As Chela O'Connor mentioned, you can request estoppel letters from the seller to verify current leases. An estoppel is a letter with the terms of the tenant's current leases that is signed by each tenant. This should satisfy the lender. I agree with Cody L. , I have never requested or had anyone request tax returns. The banks used the seller provided leases to verify property income.

Jeremy Hart Have you asked them to strike it as previously mentioned? There were a few unsettling clauses in my PM agreement that I brought up and to my surprise, my PM was perfectly fine with dropping them. I'd say give it a whirl!

Karen Ortiz Do you know what type of property you are targeting? The lender you will want to use will likely depend on the loan you need. Some banks will have more competitive terms for conventional residential products while others have much better commercial products. Some questions will depend on the loan type as well. Such as amortization period, prepayment penalties. Also, we found that in the area we invest (Class C) that some banks will loan at very low DTI due to the inherent risk. We found that larger national banks were actually giving better terms for our scenario. To sum it up, I would say to know what product you are looking for and start calling around to see what terms different banks offer and compare. Best of luck!

Javier Guanda I just pulled out a HELOC on our SFR rental through PenFed credit union based out of VA. We are in Washington and they were very easy to work with and gave us up to 80% LTV at a solid rate. I don't know if they will work for you but I highly recommend them. Best of luck.

To me, if the triplex numbers fit my criteria, that would no doubt be my option. The 5 plex in my opinion, sounds like a poor option. If it would be hard to keep full now and the town is dying, what will it be like in the future? If you aren't making enough income to maintain the property, it will further deteriorate and become a huge headache. Also, you mentioned that they will bring in the same income. Does that assessment account for the extra vacancy that you will have at the 5 plex? Just a couple thoughts.

@Christina Tkacs there are a lot of novice investors or investors not looking for cash flow, but looking for the appreciation as mentioned by @Rudy Manna. Also house hackers that are making offers. A house hacker can justify paying higher prices knowing that they will still be reducing their living costs over buying a SFR.

Also, as I mentioned above, I am definitely not saying that is for sure isn't a deal, just based on the loose figures provided, it seems like a poor cash flow investment from the surface. 

What it comes down to is learning how to accurately run the numbers (as close as possible) and knowing what you are comfortable with. Something that I might have no interest in could work great to accomplish another investor's goals.

Agree with @Tyler Blackwell. Also, he is correct in regards to the utilities. We have a 4 plex in East Tacoma and WSG paid by owner is the standard. 

A couple things here. First off, the odds of finding a 2% deal off the MLS are really non existent in the Tacoma market.

Second, the price at $245k doesn't appear to be a stellar price, from the surface. Unless there was a value add component to this deal that would allow you to increase the rental income (utility bill back via separate metering, reconfiguring to add another unit, renting storage space, etc), this doesn't seem worth pursuing. I personally am aiming for a 1.5% rule in that area.

What is your reasoning for the 15 year term? I know some people are shooting for a 15 year retirement plan. But this kills your cash flow. If you are looking for cash flow, I would strongly suggest a 30 year amortization. 

Those are just my thoughts. 

Oh, and just for reference, the insurance on my 4 plex in that area is just under $100/mo. It was built in 83' though.

Hi Peter! Congrats on your decision to pursue multifamily! My wife and I started investing in the Tacoma and Lakewood markets about a year ago. We began with a 4 plex in the Midland area and just purchased a 12 plex in Tillicum back in January this year. We have learned a lot and I would be glad to share whatever information I can that might help you out. Feel free to PM me if you want but you might find that posting specific questions on the open forums will get you a wider array of responses. But like I said, feel free to shoot me any specific questions you may have.

@Curtis Bidwell Thanks for the info. How do you deal with the coins? It seems like such a hassle to have to empty machines and deposit funds each month. So far, the best solution we have come up with is leasing the machines. We were able to negotiate a price of .66 cents per machine per day. Was it strictly the cost that turned you away from leasing the machines?