All Forum Posts by: Brian Ellis

I’ve dealt with this for a couple of years. It’s not fun.

DSCR loans are an option, but the higher rates usually kill the deals for me.

There is a sense of freedom leaving the W2 though, and I commend you for doing what 99% of ppl are afraid of.

1 Vote

Quote from @Lane Aakhus:

Congrats! If you are cash flowing it's a great purchase to get you REI career started and stay ahead of inflation. If you can self-manage, it will give you some experience for future properties. You may also look into whether or not short-term rentals are allowed to increase you ROI. Best of luck!

Appreciate the kind words. This is my fifth investment, I’ve just never dived into condos before!

0 Votes

Boston, Massachusetts

Quote from @Account Closed:

Are you ready for the New Reality . . . ?

**************************************************************************

It's one thing for a fringe, tinfoil, conspiracy theory website such as this one https://www.zerohedge.com/mark...to warn (repeatedly, for months) that with mortgage rates rapidly approaching 6%, the US housing market is on the verge of a vicious collapse, as discussed articles such as these:

It's another for one of the biggest housing-market linked companies to confirm just that.

On Thursday, Zillow plunged as much as 13% in late trading Tuesday after a dismal outlook stoked investor fears that rising mortgage rates will spark the next crash in the US housing market.

***************************************************************

Oh well, another Crash, another Cycle.

March of 2020 was worst… and here we are.

1 Vote

I just closed on a condo.

163k purchase price

5k in renovations (diyer)

Rent $1700

COC return = 14%

The only downside here is there won’t be much appreciation. It’s a small purchase price for my area. So I figured it’s a good hedge against inflation and at least my savings is bringing me a return. I also removed my ability to invest in larger deals shall one come along.

What is everyone’s experience with condos as an investment?

0 Votes

Boston, Massachusetts

Quote from @Pablo Flores:

What do you guys think. Have a bank that can do a cash out refi with no points at 4.875% 5/1 ARM 75% LTV and another bank that can do 4.875% 5/1 ARM at 80% LTV but with 1.25 in points? Value of the home is approximately 800k. I'll be able to pull out 40k more with the 80%LTV but $8k of that will go to pay points. Thoughts???

Hard for any of us to really say. All depends on your short term goals.

What are you doing with the cash? Can 32k make a huge difference in what you’re trying to purchase? That 32k will give you another 100-150k in buying power.

2 Votes

Quote from @Oscar Almonte:

In trying to get a grip of multifamily properties investing, I know with my criteria what I am willing to pay. I have recently been looking at some multifamily that have been sold on the MLS in the area that I am focused in and I just do not see what the person that bought it is seeing after crunching the numbers. Am I missing something. Can some savvy investor shed some light. This is a 3 unit.

PP 529k

Closing cost say 2%

FHA

Rent $4,495

Taxes $9,218

Water for MF for the area $51 monthly

Without expenses this person is only making 520ish after I plug in the data.

When I put my numbers of 5% repairs, 5% cap ex, water 51, vacancy 8%, PM 10%

I will be losing 7 hundred and change a month and will not cash flow until year 15.

I am over analyzing or missing something. Thank you....looking for some clarity.

$520 a month cash flow, for 3.5% down? While he/she lives there?

How is this not a good deal?

If your rent is based off of all three units being rented, and let’s say you are getting $3000 a month while living there. It is still a good deal IMO. Even a better deal if you can somehow manage to add equity to it. You’ll be paying $750 a month to live in a half a million dollar multi family, which will earn you quite a bit when you are ready to get something else.

0 Votes

Quote from @Courtney Kelly:

Wondering if you are still seeing many opportunities for off market deals, more specifically in the multi family space. Our realtor has only brought one to us in the last few months. Just wondering if that is typical, or if there are more off market deals to be considered. I imagine that unless your realtor is the one presented with the off market deal they would be hard to come across? Thank you for your input!

Kelly, I’m located just off cape. I am in the same boat as you. It’s tough around here, and I’ve been doing this for 5 years.

Send me a DM if you’d like to connect

0 Votes

Cape Cod, Massachusetts

Quote from @Noah Yoder:

I wanted to start a discussion around Section 8. It seems a lot of people have been burned by a bad tenant or don't fully understand how voucher tenants are placed. I work with some investors here in Columbus, Ohio who love it and some who hate it.

Personally, I think it's a fantastic strategy if you have the right team to manage and place the tenant. There are decent incentives for investors and rents are virtually guaranteed.

It would be nice to hear some thoughts, experiences, and maybe some insight surrounding this topic.

I think it depends on location. Where I’m from, section 8 pays extremely well. So well in fact, that some single family mls listings will rent for 1% of purchase price.

I think that investors need to shift their strategy with the market, and this is a perfect example of doing so.

2 Votes

Columbus, Ohio

Quote from @Dell J.:

if your in debt and have poor financial habits Dave Ramsey can be the best thing for you.

If you are already investing and have a higher level of financial literacy. already cash flow positive, already have a great credit score, then Dave may not have much to offer you.

I dont hate him and i understand why people follow him. ITs just not for me.

I think we put too much emphasis on what someone else says you should do. ONe person would tell you dont go in debt for an investment another person would tell you the opposite.

Really, each individual needs to think for themselves. Each individual needs to look at their investment approach and decide what is best for them and their lifestyle. A guru cant answer that question for you

I understand what you’re saying. I also use leverage. I’m a fan of it. But not with credit card debt, a financed vehicle, or without reserves in place.

My perspective is coming from a place of helping the person who doesn’t really know where to start. I think the fundamentals gets overlooked far to often

2 Votes

#1 would be selling. Sold my first house that had been rented out, stable, and in a high appreciation area. Probably missed out on a couple hundred thousand in equity and another 65k in cashflow (as of two years). Those numbers will only grow over time.

#2 using an agent to find a tenant. Turned out to be a disaster. They care about the commission, not the property.

4 Votes

All Forum Posts by: Brian Ellis

Brian Ellis has started 65 posts and replied 1157 times.

Post: Leaving a W2 and Lender Concerns

Post: Thoughts on condo investments?

Post: Zillow Drops After Dire Housing Outlook - there goes the market

Post: Thoughts on condo investments?

Post: Cash out refi with 75%LTV no points or 80% LTV w/ 1.25 points?

Post: Is there any profit in this deal.

Post: Do Off Market Deals Exist Anymore?

Post: Lets talk section 8!

Post: What’s with the Dave Ramsey haters?

Post: What is your guys biggest real estate mistakes