All Forum Posts by: Alvin Sylvain

So, how many mortgage brokers do you know? How many banks? How many lenders?

You don't suppose all of them use the same criteria? No, I don't think so.

So if you can't get a loan from this lender, maybe it's time to find a different one. Find out what their policy on rental income is before you start with them.

BTW, getting your friends to sign a commitment letter of some kind, maybe even a lease, sounds like a very good idea.

But still, this guy isn't doing you any favors, dump him and find somebody else. Oh yah, you've already started the process with this guy, haven't you? Shucky Darns! OK, so start another process with somebody else. If he gets offended, too bad, explain your reasons and move on.

I remember my wife and I were quite upset with our lender a few years back, even though we did get the loan. So when I went to get pre-approved for another loan, I was ready to go to anybody else. I don't know how, but somehow he found out my credit was pulled and he called me up, all bent out of shape. Oh well, them's the breaks, pal.

I hear the banks are tightening up their requirements in the face of the pandemic. However, there are lenders who will lend. Not all of them are banks, there are also mortgage lenders, hard money lenders, and even folks with some money in their mattress who are looking to find a safe investment.

You can search BP. Seems not a day goes by that I don't see people posting up here that "WE'VE GOT MONEY! WE'RE LENDING! COME SEE US!"

My point is, OK, fine, she got turned down. Happens to the best. Keep looking. Just because one lender doesn't like some nitpicky detail doesn't mean the lender across the street will be the same.

You know how many publishers are kicking themselves right now because they turned down J.K.Rowling's first "Harry Potter" book? Twelve. "Jonathan Livingston Seagull" sold 70 million copies in 1970 and was turned down by eighteen publishers. If you got everything you need to qualify, somebody out there will get you what you need. But they are not looking for you ... you have to go find them.

(BTW, forget about the LLC for the time being, it's going to be more work than it's worth for most people starting out.)

First, full disclosure, I am no legal expert.

1. You don't need to refinance after a year. You just can't convert to a rental until after a year.

2. You don't get depreciation on your primary residence, so this question doesn't make sense to me. You get depreciation only after converting it to business use (rental).

3. I can not say the advantages of disadvantage of 20% or otherwise down payment. The thing to do is to pull out your handy-dandy BP calculator and work out the numbers in various scenarios.

Purchase David Greene's book on this topic. Or stick around, maybe he'll do another webinar. There may be a forum dedicated to that, not sure.

Also, if you a particular market you're interested in, e.g., Birmingham, search for a forum dedicated to investing in that market. You probably won't get better advice than people who actually live and invest in the area you're interested in.

 Take the asking price, the closing costs, the maintenance, the debt service, all other expenses, and the rent income. Calculate how much cash flow that generates.

Now, take the cash flow you want to have. Work the numbers backwards to the price that will create that cash flow, and that's what you offer.

Maybe a little less, so you can haggle upwards to what you need to generate the cash flow you want. If the seller won't give it to you for that, decide how much less than ideal cash flow you can live with, or just move on to another deal.

You can substitute ROI for Cash Flow, or Internal Rate of Return, or whatever you feel is most important, and do the same exercise.

It's pretty much the same as a flip. Figure out how much money you want to have leftover, how much rehab will cost, and how much you can sell it for, and calculate what you're going to offer.

I am no legal expert in this area, but my expectation is that it would only work if you and your wife were legally separated. Otherwise, for all intents and purposes, the two of you are only one entity.
I suggest you seek legal advice before you try it, although I also expect the only penalty is the lender will laugh at you when you attempt to buy the second 10.

 However, I also think you're thinking way too far out. Concentrate on getting your first 10. You're asking about burns from air friction from running too fast, but you still haven't conquered walking.

Another thing I just thought of -- also consider, 10 loans doesn't necessarily mean 10 doors. You can get 3 loans on 3 separate 4-plexes, and there's 12 doors right there.

 Get the preapproval and MOVE FAST. The preapproval gives you an advantage over your competition, and you do have competition. It's only good for a limited time, so consider that as additional motivation to get out there and find your deals.

 I'd be very interested in knowing how you could rewire each unit into a separate meter without rewiring anything or adding meters.

What they did at an apartment I was at in Florida was divide the bill by the number of units and add that as a bill to each tenant for the next month's rent. As I recall, they slipped each bill under the door near the end of the month.

You figure it out by sitting down and working the numbers for all available scenarios. The scenario with the best numbers is the one to choose.

Remember, real estate investing, especially holding and renting, is a business. And every business ultimately is a numbers game. Which strategy is going to end up with the largest number of dollars in your bank account?

Why don't you make the neighbors an offer too? If you have both properties, that solves your "dirty neighbor" problem. Otherwise, take that into account in making your purchase offer, since it may be necessary to lower the rent. Figure out what you can rent it for, the work the numbers back to what your purchase offer should be.

Bottom line, if you can't make the numbers work given a situation that you can't improve, then take a pass.