All Forum Posts by: Andrew Valeri

Hi Benjamin,

I send out a pre-show Questionnaire prior to showing. Basic questions - It is pretty much just confirming if they qualify or not. I'll hold a showing for those that qualify and are interested. Then I tell them the qualifications again at the showing and invite them to apply if the qualify. People will still apply that don't qualify - but it will be way less than who will try to see the rental if you don't screen it at all.

@Connor Sheehan As a new investor I would recommend narrowing down a specific market you want to live in first. Identify your reasons why you believe in that market. Once you target a specific town/city you can much more easily evaluate what would make sense for you in that market. It is difficult to truly analyze 10 different towns and cities. If you narrow your criteria and aim to learn a ton about your target area you will waster less time in analysis paralysis because you will be confident in property values and rental values.

 I wouldn't expect to break even in year one while house hacking and looking to put down a small amount. However - if you look at all your overall expenses you might be able to find yourself saving ~$800-$1000/month in rent on a triplex. This can help you get your next one down the road. 

Unless you are "solving a problem" you are rarely going to cashflow in this area while house hacking and putting low money down. If you can find out what problem you can take on that will cost you less/have the resources/knowledge/time/skillset to deal with. That may differentiate something that is a deal for you vs a problem for the owner/other potential buyers.

Hi @Kevin Patel, Real Estate Investing is exciting. Is there any specific type of investing that has interested you most as something you would like to do? Or are you still just trying to find what is out there?

@Eric Newcomb

It has to be terms that works for the seller. The seller is the bank the bank decides the terms based on what it’s comfortable doing.

It’s a scale that you can offer. There’s a high down payment with lower monthly payments. Or there’s high monthly payments and lower down payment. 

If it’s a heavy rehab and you need more capital you likely need to go to low down payment so you have capital for the rehab. 

If the seller is looking to sell his house and immediately do something with that money (like buy another house to live in) then it’s unlikely you’ll make seller financing happen. Taking payments over time is great for many reasons unless if you need the money today.

Don’t decide for the seller what makes sense in your mind and get stuck on those terms. Has to be what they want.

For it to work - the seller has to really understand seller finance. A confused mind always says no.

Hey @Jacob Mitchell

Your goal will be to bring value to them as an investor.

A few things I'd recommend:

Although you do not need to be an investor yourself - there's no substitute for experience. A new investor will likely be more confident if you can pull from experience.

Be an expert on the area that you service. Know what different neighborhoods get for rent. Know what areas are better/worse so you do not waste someone's time showing in a location that is the opposite of what they are looking for.

 Have a list of provider- contractors/lenders etc that are quality that you can refer. 

Consistently providing knowledge and value will reinforce the confidence of a new investor to do business with you.

I’m in!

@Veronica Veiga If you're travel nursing and get both of your units rented and is cash flowing you could possibly get a servicing company to show that the debt is being "serviced" (Paid) by other parties and would not count as debt against you.

I have no experience doing this myself but it is the root how a buyer can purchase a house Sub to (subject to the existing mortgage) and have the seller still qualify for a new loan in their name despite having not discharged the previous loan.

@Patrik Kisucky

1031 requires like-kind property. I would look into if the types of multifamily will qualify with your single unit apartment you have. 

The 10 MF's goal is great. Do you have a specific # units in mind? Not sure where you own your apartment (I imagine Boston.) 

There's many area's outside of Boston that you can buy more units at a time or more properties with your capital.

If you want to scale but dont want to lose a cash flowing asset you could take a heloc on your apartment to buy a MF and BRRRR it. You don't pay taxes on debt.

Boston is not a market you will cashflow in year 1 if you are buying on the market and not solving any sort of real problem - unless you are bringing a ton of capital.

 Sure we are at a peak currently, but not forever. Appreciation likely to be way higher in Boston than the Area's of $500k 3 fams. Prices will surely go up over time.

You have to operate with your goals in mind and work backwards. If your goal is to reach 1000 units - tying up $500k capital (25% down) on 3 units isn't likely a great first step towards that goal. 

You can likely land a 10+unit in another area of Mass with that capital => generate more profit in the short term and begin to snowball. No right or wrong, just a matter of what your goals are. 

@Ernest Partin

Hi @Tim Donovan,

If you are house hacking and can make the payments yourself and are not overleveraged then I wouldn't consider it as putting your mom "at risk."

Worst case scenario if things change in a year and you are having trouble making payments while living there and need extra income - maybe you move in with mom to get an extra unit of income from the triplex until you can get your capital back up. 

Ultimately you know yourself more than anyone can give advice about. If the thought of your mom co-signing is a huge stressor and will be mentally "more trouble than it's worth" then don't do it. The goal for most in real estate is to get financially free because that lets you live with less stress and lets you do what you want. Your goals have to align for you to be happy.

From the knowledge I have of your situation - if your numbers make sense I would do it.