All Forum Posts by: Alexander Zurn

@Ron Turner to get the convo going again, I might suggest calling a few credit unions or smaller banks/lenders. These lenders will have portfolio options that do not conform to traditional mortgage guidelines and requirements. In other words, they will take a more subjective approach to your individual circumstance rather than objectively looking at you as a candidate to sell your loan to Fannie Mae or Freddie Mac.

Good luck!

@Andrew McIntyre a lot of great screening can be done over the phone before you even pull credit and check their background. Check this article out!

https://www.biggerpockets.com/renewsblog/4-steps-pre-screen-prospective-tenants-phone/?utm_source=newsletter

Some red flags: eviction on their background check, bad mouthing previous landlords, not providing photo ID, hurrying the process, saying they will provide two months rent up front, bad gut feeling

Credit score - depends on the tenant you are looking for/advertising for. Anywhere from 680 - 810 can be good but "good" tenants could have a "bad" credit score, it will come down to more than that. There are some other great articles on this I would suggest searching through the Blog posts

Good luck!

@Tim G. 25-30k is a nice chunk of equity! Have you run numbers on if you refinanced your SFH - would you still be cash flowing after the new P&I? If so, this sounds like a tough opportunity to pass up. Taking out 25-30k to put down on another property (could avoid PMI if you go conventional, 5% down) and then still cash flow on your SFH.

If you do not still cash flow after a refinance, I would consider your qualifying income for a new mortgage on the MF. How much can you afford? Is it enough for a MF in your area right now? What price points allow you to cover everything necessary? Obviously run the numbers and don't forget the reserves, cap ex, repairs in those calculations.

Good luck!

@Edgar Hernandez that was a great podcast. Very informative and educational. I know the part you are talking about and my only reservation is to be careful with the Landlord. Getting into the fine print of a lease, you will either have to be upfront about it with your landlord or perhaps not mention anything, not sure if there is an in between. Zeona mentioned how lucky she got numerous times with her Landlords and discussed the timing of what she did (i.e. how Airbnb was that popular yet). Well as Airbnb has gained popularity so has REI. Just be careful, be clear, and communicate! The place you describe sounds like a prime place for such a strategy.

Oh - and run the numbers too!

Good luck

@Pearce G. to give you a place to start, my interpretation is that it really depends on the Broker and/or your relationship with the Broker. Even with those two variables though, communication will be the key. It may be worth networking with a few different agents and asking about their Brokers. If that is something their Broker would allow, if he/she already does allow, etc. Do you know any agents or Brokers? Start with them! I have a feeling as REI grows so will this type of agent but I am not an expert on this.

Good luck!

@Jason Malabute

It is risky but contingencies are the way to go if you decide to blindly submit offers. I personally try to avoid that but something like that is a decision you make as an investor. You could include a viewing prior to inspection contingency so that you don't have to pay for the inspection in order to see the property.

@Marty Gold for college rentals you'll want to consider a few things.

1. The size of the college relative to the location of the property. Is it within walking distance? How many minutes? If not, how long is a drive? Are most student houses the same distance?

2. $500 a bedroom can be considered high or low but the numbers are likely better run considering each bedroom to be x amount. You can figure that out by searching local rentals and dividing by the # of bedrooms.

3. Consider the colleges off campus living policies. Do they allow it? Are they increasing it? Cutting back on it (i.e. making it harder for students to be approved off campus)? Search the schools "off campus living policies" and something will come up

4. If the college were to dismantle, would the town itself support the rentals? i.e. is the school the only thing in town?

College rentals are certainly different and they can be either good or bad, depending on how your manage the property. I suggest listening to a BP Podcast on college rentals. I forgot which number it is but a simple search should suffice.

Good luck!

@Emma Kate welcome to BP! I spent 2 of the last 4 years in Dublin. Lived in Swords, Dublin & Balinteer. It's a shame everything is so overpriced. It started a while back and clearly hasn't adjusted for the investor...but you're deals are out there!

I would suggest being on BP a ton. Go through forums, read blogs (love those things), and listen to podcasts. You'll want to look for podcasts/blogs about investing in an expensive market. It's not impossible...it's harder for sure, but doable!

Good luck!

@Kyle Nelson it will not be hard for the appraiser to find market rents. They literally have to, it is a part of the appraisal. They would even go back a year or 2 if they had to, so don't worry about that.

I was barely under the highest I could go on a loan (just my market). I was mistaken to say the rents are why mine fell through but it was the first thing that lead to me losing it. I couldn't afford to have the rents lower.

So, yeah. If you have the numbers all worked out, great. You never really know in these situations. My experience was that the appraiser went low, but I've read plenty of cases where the appraiser has gone way higher than expected. Homework is the best thing you can do.

I'd ask your agent for MLS rental comps of similar units: bedrooms, sq ft., location, parking, etc. on ALL units because that is what your appraiser will do.

@Kyle Nelson I had a property fall through due to this exact situation. In my opinion, the rents on the property were well below market rent but the appraiser determined them to be only $50 more (he gets paid to do it so I'm sure he knows better).

Anyway, a suggestion would be to look at the comps yourself. It actually bodes better for you, I think, that the units are vacant... for this first hurdle... because there are no long-term tenants that haven't had a hike in rent for a while. This gives you a prime opportunity to identify similar rents for yourself, review them with your agent and lender, and then perhaps (if allowed) mentioned to this to the appraiser in a friendly, helpful well.