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All Forum Posts by: Christopher "Bear" DeSanctis

Christopher "Bear" DeSanctis has started 5 posts and replied 7 times.

Quote from @Mark Munson:

Hi @Christopher "Bear" DeSanctis

The debt service coverage ratio is derived from measuring the PITI (+ Association dues if applicable) versus the gross monthly rental income. Most DSCR lenders are not reducing the gross monthly rental income for vacancy or expenses, they are just taking the gross figure determined by the appraiser via a 1007 or 1025. As long as the ratio is 1 to 1, you are good to go. Most lenders nowadays can go below a 1 to 1 ratio, but the LTV may get reduced and the rate will increase. Feel free to reach out if you need any advice.


 Mark, thanks for your response.  

And by "institutions", I did mean more  in the way of 'institutional lenders', like banks or private mortgage companies as opposed to private or hard money lenders.

Considering that 

DSCR = NOI / Debt Service

and 

NOI = Gross income less operating expenses

When institutions are looking at operating expenses for a new purchase, how are they calculated?  

For example, if we know the gross rents, how does the institution estimate operating expenses, vacancy, etc for the purposes of calculating the NOI so that they can determine DSCR? I suppose one method would be to use seller reported figures but that wouldn't be prudent for many obvious reasons. So how do the banks estimate OpEx? Is there a standard multiplier like say 20% of rent goes to vacancy and opex? Or are there other ways it is done?

I am looking at structuring a deal and I'm worried the DSCR will be too low and the deal may benefit from restructuring by purchasing the 2 vacant out of the 12 otherwise occupied units with hard money as opposed to trying to purchase all 12 with a institutional loan just because I'm worried the 2 vacancies will drag down the DSCR for the new purchase.

Post: General contractors Lancaster PA

Christopher "Bear" DeSanctisPosted
  • Real Estate Agent
  • Erie, PA
  • Posts 7
  • Votes 6

Hi everybody. I will be closing on a SFH in Lancaster PA. Initially I had considered using this property as a rental, which it is still viable for since I am getting a great deal, but after doing calculations and seeing that my monthly taxes were higher than my principal, interest, and insurance combined, I want to reconsider making it a flip.

I am originally from Lancaster, PA and have family and friends there, but I live in Erie PA and will have to manage the project from afar.


I am looking for strong recommendations for general contractors in Lancaster, someone who is accustomed to working with investors/flippers and can work with minimal supervision.

Project is a 3 story connected row home, brick, built ~1900

I want to:

Replace roof

Remodel kitchen

Increase size of 1st floor bathroom some (I can barely turn around inside)

Repair/replace interior doors which are damaged.

Refinish or possibly replace all exterior windows

LVP floors in home

Hang drywall/sheetrock over damaged plaster

Update electrical/wiring (potentially knob-and-tube)

Remodel 2nd floor bathroom.

Consult adding potentially master bathroom (adjacent to 2nd floor bath)

Paint interior/exterior (exterior has chipping paint, likely lead).

Any other maintenance or problem issues discovered along the way.

Please reply or message me with any information you have.

Thank you very much!!

In North Carolina.

I bought a duplex for a house-hack in 08/2020 and assumed a long-term tenant in the downstairs unit, who is a bit of a hoarder, has lived there ~10 years - he had been on a month-to-month lease since 2015. I currently live upstairs.

Recently my wife and I have decided to move back to PA for various reasons and before I leave I decided I wanted this tenant out, I wanted to do a light renovation, and then pass it to property management to get higher quality tenants and higher rent.

On 10/5 I gave my tenant notice to vacate the property by 11/10 (via delivery with signature receipt). When I went to inspect the property yesterday it was clearly not moved out, maybe 25% done. I had spoken with the tenant on the 1-2 weeks leading up to this and he told me he had a new place lined up. He has had a moving truck outside, but seems to be moving at a particularly leisurely rate. He also didn’t pay me the prorated rent for this month.

I can’t begin any of the structural work or electrical work because the basement is so hoarded that the workers don’t have the space they need to work.

So it seems like he’s moving, but he’s holding over the date he was given to vacate. I can’t get the work done until he is all moved out and that basement is clear. He has not paid this last month’s rent yet.

My goal was to have all of the work on the house done and be ready for new tenants by the end of the year.

What’s the best play here?

Do I give him more time to move his stuff with good faith that he wants all of it? How long would I give him?

Do I go down to the county office and start eviction at the small claims court?

Other?

Long story short. I decided to start my real estate investing business this year and closed on my first property on 8/5/2020 with an FHA loan as I was using a house-hack strategy on this first duplex in North Carolina.

In a somewhat unexpected turn of events, my partner and I eloped last week. However, for familial reasons, she will be moving to to PA next week and I plan to follow her as soon as I can.  Right now the only things I have to do here to move to PA is finish the basic repairs I planned for this house including a little work to manage a drooping floor, roof replacement, and some electrical work.  I plan to get a property manager to manage this place locally. 

So the problem is that the FHA loan requires I live in the property for a year. In your experience, can this requirement be waived by my recent marriage and planned relocation? Or will I have to refinance to a conventional mortgage to move on?

Thanks for the help!

Post: New investor from Winston Salem NC

Christopher "Bear" DeSanctisPosted
  • Real Estate Agent
  • Erie, PA
  • Posts 7
  • Votes 6

Thank you everyone for responding.  It means a lot for people to take time to stop in and say hey.

@Jingru Sui, with the current climate out there, what do you think would be the best way to approach lenders initially?  Online applications for local institutions, phone call, walk in?  

Post: New investor from Winston Salem NC

Christopher "Bear" DeSanctisPosted
  • Real Estate Agent
  • Erie, PA
  • Posts 7
  • Votes 6

Hello, my name is Chris DeSanctis. I'm 31 years old and I work full-time as a physical therapist and I live in Winston Salem, North Carolina. I have no background in real estate and at this time I do not own any property. My ultimate goal is to FIRE with a buy and hold/BRRRR strategy of SFH/MFH.

I discovered BP several months ago from an IamA on Reddit by a guy who went from nothing to nearly having 100 properties in about 10 years. I read every post he made then continued expanding and learning most recently finishing Rich Dad, Poor Dad, Brandon's Rental Property Investing book, and several dozen episodes of the BP podcast.

I found myself thinking more and more about my future, what I wanted from life, what my dreams were.

Last week I got home and saw an email for Brandon's 90 Day Challenge webinar. I don't know what came over me but I dropped what I was doing, sat down, and watched and took notes, which is something that I 'never' do. After I was done watching I realized that it was time for action. I can dream all I want, but I actually have to get up and do something about it.

Right now I am in the education and planning stage. I'm still listening to podcasts, working my way through other books on the list. I have a spreadsheet for analyzing properties and have started scoping out my local market, analyzing deals, looking up information with resources available. I feel like I've already learned a lot and the idea of doing this is getting a little bit less scary; numbers and math help make me feel comfortable I guess.

I've started driving for deals...really more just learning my area, but call it what you will.

I'm slowly putting together my 90 day plan – it's sparse, but I'm trying to follow some advice from one of the early episodes about just figuring out the next step when you start to feel overwhelmed.

My short-term 90 day plan:

Buy a 3-4 plex and house-hack

I intend to use property management company ASAP.

Must be FHA compliant because I plan on making the minimum down payment (estimating 10-12k to spend by August)

Light rehab okay, but no major work. I don't plan on getting my hands dirty because I'm not competent with that kind of work and the return on investment isn't worth what I can make elsewhere.

B/C neighborhood in southern Forsyth country or Davidson county.

My medium term plans:

BRRRR single and multi- family properties in this geographic area.

I want to make enough money to transition to part-time PT so I can more effectively accumulate properties.

My next steps:

Networking: I need to form my core team - Real estate agent, mortgage lender, contractor, property manager. I will use the forums to find recommendations from other members. I want to meet a really good real estate agent first and hopefully utilize them to help me search and meet other members of my team.

Learning:

Finish Unofficial guide to real estate investing book

Examine this listsource and openlettermarketing things that I keep hearing people talk about.

Continue analyzing deals. I have done 8 so far and will do 2 more tonight after the webinar. (This has been an interesting step. Some of the properties I thought would be excellent at first glance were TERRIBLE deals and others I thought were 'Meh' actually turned out okay.

So I know this is super long winded. I think I mostly did this to just establish myself and change my habits and start immersing myself instead of watching from the outside. I think it also helped me think out my plan and what I need to do next.

I look forward to growing here and hope to meet any locals to the Piedmont Triad.

Regards,

Chris