All Forum Posts by: Brenden Mitchum

Hey @Arsalan S., welcome to the BP community!

Sounds to me like your best bet would be a portfolio loan. If these are separate then you can buy them individually with separate conventional loans. However, you will quickly reach that 10 loan limit so you'd probably end up having to portfolio refinance the properties out of conventional (or start using a different loan product). If you're purchasing them all at the same time, then might as well just start off with portfolio financing. 

I am not a loan broker so you will definitely want to speak with one to make sure this is the way to go. It will really just depend on your situation specifics. 

Hope this helps a bit though. Please, feel free to reach out anytime if you have other questions or just want to chat!

Hey @Alex Caplan, welcome to the BP community!

I would double check what your lender has told you. My partner and I have done exactly what you're describing except we are both on title (and have been from the day we closed). We were both on the contract but only she was on the mortgage. Now GA is a title theory state while Maryland is a lien theory state so this may change things for y'all. However, definitely something to follow up on. Can you ask your agent or another real estate professional you know in your area?

If getting on title turns out to not be an issue, you will also want to discuss with your partner how you two plan to hold ownership. Will this be as tenants in common (when one dies, their share goes to their heirs) or joint tenancy (when one dies, their share goes to the other). The closing attorney/title company will ask about this. 

Hope this helps a bit! Please, feel free to reach out anytime if you have other questions or just want to chat!

Hey @Devin Williams, welcome to the BP community!

Disclaimer: I am definitely not an attorney nor am I a mortgage professional.

However, I've had this conversation with my loan officer before and seems like there is a bit of leeway when it comes to that one year occupancy requirement. As long as it's a significant life change (like getting a new job or going off to school) and you did not know it was going to happen before purchasing the home, you'll be fine. 

Chances are the bank will never have a clue you aren't living there, anyways. Just keep making loan payments and they'll have zero reason to check in on you. If they do, it sounds like you have a legitimate reason to not be there. Double check with your loan officer if you have one. 

Hope this helps a bit. Please, feel free to reach out anytime if you have other questions or just want to chat!

Hey @Eric Bello, welcome to the BP community! 

I'd be happy to link you up with the broker we use on all of our deals and our clients'. He's also very familiar with refinances and does these regularly. Whether you're looking to portfolio refi or refi separately, he can definitely help. Shoot me a message anytime and I'll get you his contact info.

Hey @Artemio Alanis Jr, welcome to the BP community!

Having a game plan would be wise. What do you do if they say, "I'd love to sell my property to you - send me the contract and proof of funds!" ?? You'll need to have your ducks in a row before you reach out to them. Plus, nothing will kill this deal faster than them realizing you have zero idea what you're doing. 

Financing is important for a couple reasons: 1. You can show proof of funds which tell the owner you're serious about buying their property. 2. This will also give you confidence when speaking with these owners that you can close the deal.

Getting a hold of the owners should be the easy part as long as they have not been overly protective of their privacy. Just use your county tax assessor's property search tool to determine who owns the property. This likely also has an address for them that you can mail letters to or stop by in person if it's close. No guarantee it's up to date but wouldn't hurt to try. Now that you have their names you can also skip trace their phone number (email too if you want). Use free sites like White Pages or Fast People Search or paid tools like PropertyRadar or PropStream. Be prepared for what you'll say before you start calling numbers!

Hope this helps a bit. Please, feel free to reach out anytime if you have other questions or just want to chat!

Hey @Oscar Almonte

I hear your frustration - finding ARV on small MF in an area with very little small MF can be a huge pain.

My first question would be, do you need the ARV? If this is not a BRRRR and thus does not have an important refinance component, just calculate cash flow without ARV.

If you plan to BRRRR and need ARV for the calculations, it might help to think more about why you need that ARV. You're trying to guesstimate what the appraiser may value the home at in x months, right? Well, what do you think they'll do when they look for comps and find nothing? My bet is that they aren't going to use the income-based approach since this is residential but might instead look at smaller MF and use a per unit value to extrapolate the value of your quad. They will likely also use a cost-based approach and may even take more of an emphasis on this since the comps-based approach won't be as reliable as usual.

However, this is all speculation. My next move would be to speak with an appraiser in my area or lender. Essentially, figure out what an appraiser would do and you'll have your answer. 

Hope this helps a bit. Please, feel free to reach out anytime if you have other questions or just want to chat!

Hey @Dylan Domingue

Congrats on the find! Or maybe this is still hypothetical..Can't really tell from your post haha

Regardless, your best bet is to seek out info on the due diligence process for residential property. I've read a few on commercial but can't think of a good one for residential off the top of my head. It also wouldn't hurt to go through the BP video library here or on youtube to see if you can dig up something that might help. 

The process is fairly simple though but you might get into trouble if you don't take it seriously or skip steps. The exact order is sometimes important and sometimes not, just depends on the situation. This is what we usually do though:

1. Source the deal

2. Analyze deal

3. Negotiate terms

4. Put under contract with a due diligence period

5. Go out to property with contractor

6. Send inspector out (unless you're very confident in your/your contractor's ability)

7. Collect any important docs from seller (like leases)

8. Re-analyze the deal

9. Close the deal

I didn't include financing steps in here because where these fit in and what those steps are will depend on what type of financing you are using. 

Highly recommend getting with an agent if this doesn't make sense or you're still lost after spending some time researching the subject. 

Hope this helps a bit though and please, feel free to reach out anytime if you have other questions or just want to chat. 

Hey @Kam Ajani

Just responded to your other post on the Atlanta market but wanted to also provide a little advice on analyzing deals.

Utilities and who pays will depend on your strategy. If you're just renting a SFH to a single family, typically they would put the utilities in their name and pay for them. Garbage may be something that you already pay through property taxes so make sure you check that. Lawn care is not considered a utility and most folks write leases that put the responsibility for lawn care on the tenant. However, this is up to you.

7% for CapEx is fine. Really that just depends on the age of the home and its systems after you purchase and/or renovate. If the home/systems are brand new, you could get away with 5%. If everything is really old and you replaced nothing before putting a tenant in, 10%+ is smart. Typically you'll be in that 5-10% range. Make sure you're also including another 5-10% for repairs/maintenance. Don't forget another 8-10% for vacancy and another 10% for property management.

Hope that all helps clarify your calculations a bit! Again, please feel free to reach out anytime if you have other questions or just want to chat!

Hey @Kam Ajani, welcome to the BP community!

The problem you are facing is one that just about every buy & hold investor in Atlanta is facing right now. While rents are ticking up, home prices have shot through the roof. This, coupled with raising interest rates, has made cash flow close to impossible to find anywhere in the Atlanta MSA. This is especially true if you're looking on the market and for relatively turnkey properties. If you do happen to find one, you'll find yourself competing with the other hundreds of investors (and homebuyers) who have seen the same property. Likely, the closing price won't end up being anything that would have produced cash flow..

However, there are still investors doing well in the buy & hold space here in Atlanta. These are the folks who are getting creative. Either in their strategy or in how they find deals. Have you thought of other ways to boost income beyond market rent? Or maybe developing a direct to seller marketing program of some kind, if you have the time. Essentially, the days of just doing the same basic strategy as everyone else to find cash flow are long gone. Now it takes creativity, time (yours or your team's) and patience. 

Hope this helps a bit! Please, feel free to reach out anytime if you have other questions or just want to chat.

@John Joyce

I'm certainly not an expert in this and have never done it myself but I'm not seeing any obvious reasons that structure wouldn't work. As long as you and your Dad are happy with it, should be fine.