All Forum Posts by: Aaron Arnold

@Rhia Mckissic It sounds like you're going through a tough time with your property. Here's a bit of advice: Marketing a property effectively involves several steps. You've already taken some good ones by listing the property on Avail.co and MLS, but since it's been vacant for 9 months, consider if the property is priced competitively for your area. It's also important to ensure your property is presented well with professional photographs and possibly a virtual tour.

Additionally, expanding your marketing to social media, real estate forums, and local community boards could help increase visibility. Since you mentioned the house is suitable for professional roommates or a family, you might also want to reach out to local businesses, hospitals, or universities, where there may be potential tenants looking for housing options like yours.

Lastly, feedback is invaluable. If you've had viewings but no offers, try to get feedback from viewers to understand any concerns or objections they might have. With this information, you can address issues that might be turning potential tenants away.

For beginner investors exploring the BRRRR method (Buy, Rehab, Rent, Refinance, Repeat), managing reserve requirements alongside capital for new investments is a key part of the strategy. It's indeed common for lenders to require 2 months of reserves for loan payments on each property as you expand your portfolio. Savvy investors often navigate this by leveraging various assets as reserves, including investments and retirement accounts. Some lenders may allow you to use funds in retirement accounts (like IRAs or 401(k)s) as part of your reserves. This approach can help you meet lender requirements without depleting the cash needed for down payments on new properties. Always ensure you're clear on each lender's policies regarding what qualifies as reserves.

When it comes to reserve requirements for mortgages, it primarily depends on the purpose of the property. For primary residences, lenders typically don't require PITI (Principal, Interest, Taxes, and Insurance) reserves beyond the down payment and closing costs. So, if you're buying a home to live in, you might not need to worry about having 3-4 months of PITI in reserves.

However, for investment properties, the standard is a bit different. Conventional loans usually ask for at least 2 months of PITI in reserves. This helps ensure you can manage payments even if the property isn't generating income right away.

Given your situation, if you're aiming for an investment property and have about 3 months of PITI saved up, you're likely in a good position for a conventional loan. But remember, requirements can vary by lender, so it's always a good idea to check directly with them

Jumping into real estate investment, especially at such a thoughtful and exciting time in your lives with a new baby, sounds like a great move, especially with the equity you have available through your HELOC. Given your situation and the specific challenges you're facing in finding a lender for properties in the $80-90k range, I'm curious if you've explored options with Chase. I understand that navigating the minimum loan amount restrictions can be tricky, but Chase is known to offer financing solutions that could potentially accommodate lower loan amounts, possibly even down to $50k, which might align well with your investment goals and the price range you're interested in.

If you haven't already, reaching out to Chase could provide you with some additional flexibility in your property search, allowing you to stay within your desired price range and maximize your monthly cash flow from the investment. It's always a good idea to compare options and see if they can offer a loan product that suits your specific needs, especially given your preference to invest without moving from your current home.

Best of luck with your real estate investment journey!

Amending returns can rectify the mistake on paper, making sure everything's in the right place for both the IRS and any future buyers. However, if the thought of diving into tax forms and recalculations seems daunting (and it can be, given the complexities of tax laws and the potential for significant financial implications), reaching out to a CPA might be the smarter move. They're the pros, after all, and they can offer tailored advice, ensuring you're not only correcting the mistake but also optimizing your tax situation.

Good luck, and definitely consider getting professional advice to navigate this.

Jumping into the landlord game with your duplex is a smart move, but yeah, it comes with its fair share of homework. First off, while grabbing a lease agreement off Google might seem like the easy route, it's kinda like using a one-size-fits-all shirt for a diverse group of people; it might not fit perfectly. Laws are super local, changing from one place to another, so it's a smart move to get a lawyer to tailor that lease specifically for your spot. This way, you're covered legally, and your lease includes everything from rent details to what happens if someone decides to turn your living room into a circus ring.

Now, about finding those gold-star tenants, it's all about the background check. There are a bunch of online services that can run credit and criminal checks without breaking a sweat. You'll want to make sure your tenants can comfortably afford the rent—usually, their monthly income should be about three times the rent. And don't skip on chatting with their previous landlords; you'll get the real scoop on what they're like.

Remember, being a landlord is not just about collecting rent; it's about being fair, knowing your stuff, and keeping your property in tip-top shape. It's a bit like being part of a community. You're providing a home, not just a house. Plus, there's always more to learn, so don't shy away from landlord forums or local real estate groups. They can be goldmines of info and support. Good luck, and here's to finding tenants who treat your place like their own!

If you have been more than two payments past due or have been past due by two or more payments in the last 12 months, then the loan casefile is not eligible for delivery to Fannie Mae or Freddie Mac/ conventional loans. You may need to look at non-agency or portfolio loans.

Given your situation and interest in potentially expanding your investment portfolio, you might consider the BRRRR method as a strategic approach. The BRRRR method stands for Buy, Rehab, Rent, Refinance, Repeat. It's a real estate investment strategy that allows investors to build a portfolio of rental properties over time by recycling the capital invested in one property into multiple deals. Here's how it could apply to your case:

Buy: Use the equity from your current property to purchase one or more additional properties. Given you have $200k-$225k in equity in your townhouse in Clayton, NC, this could serve as a substantial down payment for one or more new properties.

Rehab: If the properties you purchase need updates or repairs, invest in making those improvements. This increases the property's value and can allow you to charge higher rent, improving your cash flow and the property's appraisal value for refinancing.

Rent: Lease out the newly acquired and rehabbed properties, preferably to reliable tenants similar to the family you currently have in your townhouse. This step is about generating income from your investment.

Refinance: Once the new properties are stabilized (occupied by tenants and generating income), look into refinancing them based on their new, improved value. This step is critical as it allows you to pull out much of the original capital invested, which you can then use to repeat the process.

Repeat: Use the funds from refinancing to invest in additional properties, repeating the BRRRR process.

This method could potentially allow you to expand your real estate portfolio more aggressively than simply selling your current property and buying a couple more. It leverages the concept of using "other people's money" (in this case, bank financing) to grow your investments. However, it's important to consider the risks involved, including over-leveraging, the costs associated with rehab, potential vacancies, and the complexities of managing multiple rental properties.

Given your conservative investment approach, it's essential to carefully assess these factors and perhaps start with one additional property to get a feel for the process before scaling up. Consulting with a real estate investment advisor or a financial planner who understands the BRRRR method and your local market conditions can also provide personalized insights and help you make an informed decision.

Your investment in a triplex in rural NE North Dakota, with a focus on cash flow and long-term appreciation, is a smart strategy, especially considering the distressed nature of the units and your plan for incremental updates. Using the MLS to find this deal and securing it with a conventional 30-year loan shows a straightforward yet effective approach to real estate investment. It would be interesting to learn about any challenges you faced during the negotiation and financing process, as well as any tips you might have for others looking into similar investments. Why North Dakota?

Hello @Account Closed

Thank you for taking the time to respond to my post. My primary goal is to develop a comprehensive understanding of real estate investment and property management, with a particular focus on expanding my portfolio responsibly and sustainably. Specifically, I aim to:

Acquire More Properties: I'm looking to grow my real estate portfolio by adding more rental properties, focusing on multifamily units like duplexes, triplexes, and quadruplexes. I believe these types of investments offer a good balance of risk and reward, especially in the Phoenix market.

Improve Property Management Skills: Having faced challenges in managing my first property, I want to learn effective property management techniques. This includes everything from tenant screening and lease management to maintenance and renovations, ensuring I can provide great living spaces while optimizing operational efficiency and profitability.

Financial Strategy and Analysis: I'm keen on mastering the financial aspects of real estate investing, such as evaluating deals, structuring financing to minimize risk, and understanding the tax implications of real estate investing. My background in mortgage underwriting has given me a good foundation, but I'm eager to delve deeper into strategies that seasoned investors use to finance and scale their portfolios.

Networking and Mentorship: I'm looking for opportunities to connect with experienced investors and property managers who can offer guidance and mentorship. I believe that hands-on experience under the tutelage of a mentor can significantly accelerate my learning curve and help me avoid common pitfalls.

Contribute to a Mentor's Success: In exchange for mentorship, I offer my dedication, time, and effort to assist with any projects or operational tasks. Whether it's conducting market research, assisting with property management duties, or helping with financial analysis, I'm ready to contribute value to my mentor's endeavors.

Ultimately, my ambition is to build a robust and profitable real estate portfolio that not only generates passive income but also contributes positively to the communities in which I invest. I'm committed to learning, growing, and overcoming the challenges inherent in real estate investing. Your insights, advice, and potential mentorship would be invaluable to me as I pursue this path.

Looking forward to your thoughts and advice.

Best regards,

Aaron Arnold