All Forum Posts by: Anthony L.

Hey @Stephen Igbeka,

Sounds about right - there are a lot of different things that factor into closing costs. Title insurance, appraisal fee, closing/settlement fees, etc. Pre-paids are comprised of initial taxes due plus escrow, full year or homeowners insurance up front plus escrow, any PMI that is required to be escrowed, etc.

If you're at $6,600 without counting pre-paids, I would say that's a little high.

There's no easy formula or set percentage of the loan amount/property value, and every lender is different. Let me know if you'd like to chat for a few and compare rates and terms! I'd be happy to help out.

I also know the Worcester market very well, having previously helped operate and manage an investment company that owned 200+ units in the area.

@Rich Hupper it depends on how you file your taxes (if you file as a sole proprietorship, s-corp, c-corp, etc). With some more info I can give you better information.

I'm assuming your 1099 income is your sole source or at least majority source of income?

@Steve Bracero count me in for this if you think I would add any value. Would love to help and share any ideas/experience I have.

Hi Jorge,

I'm in Beverly and specialize in multi-family/investment property financing. Let me know if you'd like to discuss your options, I'd be happy to help out!

Anthony

@Seth Williams is right - the easiest way to think about it is the property will be valued based on the income it produces. A quick update/re-splash of the units should command higher rent, therefore increasing cap rate. GRM (gross rent multiplier) also comes into play (and may be the primary form of valuation for this type of property, depending on a few specifics), but the same principle applies.

Higher rent = higher value

Depending on the property and lender, they may want to include expenses, vacancy, delinquency, etc in their calculation. It's not always as cut and dry as gross rents - So having a stabilized property (proving low vacancy/delinquency over time) where you can minimize expenses and maximize rents will get you the highest possible value.

In my experience, usually only single family homes are valued by "comparison approach." Any income producing property/asset will be valued on the income it generates.

@Thomas Hickey I am also in Peabody, for the record, and invest locally. We should connect some time.

I own and occupy a 2-family house in MA which I purchased and financed with an FHA loan in October of 2013. This was my first of hopefully many real estate acquisitions.

Keeping the details short - the apartment I live in has 3 bedrooms, I occupy only one and rent out the other two. I see a huge opportunity to move out and rent the entire place, netting a $500+ cash flow monthly (after PITI), and move into another multi/condo/SFH.

My question is: what are my options, regarding the FHA financing on this property. It's my only property at the moment, and I'd love to find a way to refi out of FHA or structure a deal in which buying another property is possible.

My financial details: $32k in savings, steady income of $45k+ per year, mortgage on property 1 of ~ $1900 (including PMI, taxes, insurance). The rental income more than pays for the property at $2,400/month (fully rented).

Do I have any viable options? Or am I severely limited due to the FHA restrictions? Any thoughts, ideas, comments, or advice is appreciated.

Thanks everyone for the welcome messages and words of encouragement. This is something I plan on doing for quite a while so it's nice to have an outlet like this to network and speak to others with the same interests.

@Mike Hurney - To answer your questions...

1) My strategy for now is to hold this property, I estimate for the next 3-5 years. I don't plan on living in it any longer than is required - Fully rented, it cash-flows nicely so it may turn into a longer hold period. I figure over the next few years I can add some good value just updating the basics and hopefully sell it off for a good return to fund another deal. If I can build enough equity I can always cash-out refi to do the same...plenty of options. It all depends on where the market is at that time, but for sure it's worth holding for a while.

2) Yes, unfortunately PMI. I did everything to avoid it but got stuck anyways. I'd LOVE to be able to refi out of it (sooner rather than later). I'm working on learning the process behind that as we speak - I know there are some specifics to FHA loans.

3) Most important rules I've learned from my dad - that's a tough one. There isn't anything specific that jumps to mind, but the basics behind cash-flow and having tenants pay the mortgage, build equity, etc are the most significant. Additionally...minimizing vacancies, maintaining the property, handling problem tenants, and overall just being hands-on rather than an absentee landlord. Since I've been involved in this industry on a much larger scale with my job, I've actually been teaching him a few things as well!

Hi everyone. My name is Anthony, from Massachusetts, specifically North Shore area. I found BP while doing some research and learning more about real estate investing. I've been making my way through all the podcasts over time, and I'm just about halfway through.

I learned the basics of real estate investing at a young age, watching my father manage two properties which he inherited, and quickly realized it was a great way to make supplemental income. Since this realization, I've been in love with the idea.

I work for a real estate investment firm managing a growing portfolio of over 100 properties. I've learned a ton about being a landlord and property management in the short time I've been at my current job...too much to explain in this short post. In that time, I've also begun investing on my own - closing on my first property just over a month ago.

I'm very eager to build upon my first investment and continue growing my own personal portfolio. I'm also very interested and driven to complete a flip sometime in the near future.

Specifically, I'm interested in the financing behind these deals that would allow me to continue to grow my investments. My personal property is an owner occupied 2-unit that I was able to get with an FHA loan on. I am trying to find out more about how to leverage this property into my next venture, but I'm afraid I may be somewhat limited due to the FHA and general financing restrictions.

I'd love to connect with and create relationships with other investors/lenders in my area so that we could share experiences and ideas, and network to ultimately help each other out. I'd be happy to go into more detail on anything I've mentioned so feel free to get in touch with me!

We (the company I work for) just recently purchased a Nikon D3100 for the exact same purpose. It's on the higher end of your price range, maybe even above, but the features made it worth the investment. Very easy to use, great picture quality, tons of additional settings and features.

Ultimately you want to find something with as wide of an angle as possible to hopefully get pictures of an entire room in one shot. The standard lens that comes with this camera is more than sufficient. I'm admittedly a camera rookie, especially one of this caliber, but a friend of mine in the electronics industry pushed us towards this one for all the reasons I've mentioned.

Good luck!