All Forum Posts by: Lee G.

Fannie Freddie loan

Maybe it's his college experience that's giving him the wisdom to keep an open mind to learn from the mistakes of others.  Bashing education is the new low hanging fruit argument these days.  It's popular but doesn't mean its correct. 

Tyler,

I am currently under contract for a 4 unit property and I'm able to get 20% down.  I spoke to several lenders and only 1 of 5 I talked to was willing to allow a 20% down payment.  Based on the lenders I spoke to, I felt fortunate to only put 20% for 4 units.  I also notified the bank that I would live in one of the units.  If you want to do better than 20%, you may need to shop around and expect a high rejection rate. 

Zach,

I had similar feelings about my first rental 4 years ago with several cap expenditures and two rounds of bad tenants in about a 18 months span.  However with patience, my luck turned around now that I've had the same tenant 3 years and counting and on two occasions they have been the ones to ask me to sign a new one yeas lease after the old lease expires.  Since putting a new HVAc unit in 2012, my expenses have been less than $300 for 3 straight years.  I think brighter days may be ahead of you. 

@Ben Leybovich any opinion on this?

I have researched a duplex for weeks and finally made an offer and now the seller and I are going back and forth.   It's my turn to counter offer or accept!

Here's the Pros

1) I love the location (good rent appeal)

2) its already rented 

3) it would cash flow and have acceptable ROI numbers even at the price the seller has countered my offer with.

Here's the Cons

1) there are no comps for this duplex!   

How do you negotiate in a situation when there aren't comps?  

It's my understanding that duplexes are valued by comps similar to single family properties.  I found a house on the same block, only 2 houses down that that sold a little over a year ago and the price per square foot was $3 cheaper.  This house had many features and qualities that this duplex does not have.  Therefore, I think it would be logical to assume at minimum a comparable price/sq foot.   If I use that house as a comp, and multiple that sq footage by the comp price per sq foot, I get a value that is $8,000 lower than the current counter offer price.  Is this a valid way to look at it since there are no apples-to-apples comps?

This property would make sense either way, but it's a matter of a good versus really good deal situation.   

Great topic!  Once an acceptable emergency fund is in place, would anyone begin paying down on the loans?  I guess everything depends on personal situation .. Risk tolerance, etc.  I am hoping to have 5 units renting by the end of the year.  I will have the same decision to make down the road... Buy the next one or pay down.  Also depends who much you're making at your day job.