All Forum Posts by: Brian Ellis

There is an old motel, with a large single family home, and 5 cottage style rooms on the lot. They only have one room with a bathroom.

I would like to live in the single family house and airbnb the rest of the rooms. The property has an 8 room license.

Every lender I speak to says I will need commercial financing, and that commercial financing will not allow me to owner occupy.

My argument is the field card has the property listed as 2 units, and if that is the case then it should be an issue to get traditional conventional financing right? As long as 51% is considered "residential". But thats where I get confused because what determines residential/commercial?

Any help is greatly appreciated!

Brian

Congrats on taking action. Youre already ahead of the game. Everyone wants to invest, but no one wants to put in the actual work.

I too was very active on BP for the first few years in my career. 

I also just received my license, well see how that goes. I dont think ill get rich from selling real estate, but im confident it can help propel me forward in obtaining more of my own real estate. 

I went from w2 working nights and weekends fixing up my own houses, to starting my own remodeling business, and now rentals & real estate full time. Its been rewarding so far, and definitely wouldnt have been able to fully pursue my dreams/goals without real estate.

Good luck, wish you the best

 Who installed it? if its brand new then there should be some sort of refund or repair by the installer. As mentioned above it would have been necessary to put them in a hotel for a few days. And even now it would make sense, I would assume your state requires you provide hot water.

I cant give advice in regards to your situation and a credit to the tenant. Every situation is different. From my experience, im a little more relaxed and have provided credit for that one minor incident that prevented the place from having water damage. I would do everything I could to get the water heater up and running within a day or two, which would prevent this type of situation where a credit is even considered.

 I have given rent credit twice to one tenants.

First is when he replaced a leaky toilet on a whim. Gave him money for the cost of the toilet, and a little extra on top. I only allowed this because I was out of town and it was crucial repair. The second time was when he brought me a highly qualified tenant for the unit next door. I offered him $150 off his rent for the following month. Normally I wouldn’t give credits, and I haven’t to anyone else. But some tenants are really good, take care of the property, and are worth the investment. 

My only regrets as a self managing landlord is buying property with large yards and driveways. I always included snow removal and landscaping in my leases. Its not that much work, but the fact that I used to work at a w2 job, I would need to find time throughout the week to cut the grass, and shovel driveways at 4 am. I NEVER regret doing maintenance work like fixing minor issues. I can pay myself $120 an hour and write it off as opposed to paying someone else $120 and writing it off. 

Once you get to 4-5 properties it can become a real pain in the butt. But all in all, I have saved a lot of money by self managing. Thousands of dollars a year in savings makes a big difference for someone trying to grow their portfolio.

There is a possible deal on the table. 

410k purchase price.

50k offered for construction costs

Using 150k heloc for down payment and holding costs

550k ARV (conservative)

111k cash back at refinance

$550 cashflow when all said and done

high amounts of leverage here. What are your feelings? It’s definitely worrisome but I do have other property I could sell worst case scenario?

The first thing I did was become financially responsible. Meaning, I would stop spending money on things that werent a necessity. I quit cigarettes, stopped ordering out, started making coffee at home, cancelled subscriptions, etc.

The second thing I did was start a side hustle. I would buy items from yard sales and clean them up and sell them on ebay (specifically vintage tools). Youd be suprised the value you can find in someone elses junk. One mans junk is another mans treasure. That helped me pay off my credit card debts and delinquent accounts.

All in all it took me about a year to be in a position to actually buy. But I had to think long term. In the meantime I would come on biggerpockets and learn as much as I could from my predecessors. Read a lot of books which helped me stay motivated.

You can do it, just buckle down. Goodluck!

Going to attend this @Jack Dalrymple

I had reached out on IG a few months back. Looking to expand my network and get larger deals. 

 I’d advise you to get familiar with running numbers, and how to analyze a deal. Once you’re able to do that with confidence, then you need to consider that using a heloc is basically getting 100% financing on a property. So make sure your numbers work. 

I would still shoot for a good return after all is said and done.

good luck 

Good morning BP

are there any low down payment options for an owner occupied 3-unit mixed use property? Bottom floor is retail, with two residential apartments above.

thanks for the help!!