All Forum Posts by: Brian Miller

@Katrina Sokolosky, I am not a lender or an underwriter, but an agent who has worked with a lot of FHA house hackers. Some of those clients have purchased two multi family properties using FHA. They have all had to explain why they are moving from the originally purchased property to the underwriter. The issue that may come up, as I have seen in the past, is that you are moving from a SFH to a MFH. It is more typical for people to move in the reverse order, so red flags may arise in underwriting. They may also think you are buying strictly an investment vs an actual residence which is what your lender talked about. The area/zip code you move to typically has to be better than where you currently live. I'm not familiar with where you live or are trying to move to, so you'll have to use your best judgement.
As an example, you could explain that the cost of living is higher where you are moving to, and that you want the additional rental income to offset costs. You would have to prove that of course, and the underwriters do look into this since it is a Gov backed loan. Hope this helps! 

@Heath Watson. Got it. I am less familiar with that part of our great state, so I would recommend looking at other rental listings in your area. Check to see what others are charging for rents and what utilities are included. Your proximity to the property and the work already done is a huge plus. If you try to BRRRR the property, you'll get more out of rehabbing the units that you will for blown insulation, roof, etc. Go with nice finishes and people will pay for it. You'll also get a better class of tenant who will typically respect the property and pay on time. If you can get the numbers to make sense for you now, I'd say go for it. You can always refi when rates go down hopefully sometime next year. Try to negotiate the price as well. The market is shifting to a buyers market with raising interest rates and properties sitting longer. Best of luck!

@Heath Watson, what part of St. Louis is this in? What is the sq footage of each unit. I own a one story triplex, no basement, no washer and dryer hookups, 450 sq ft units, and get $675 per month. It is in the North Hampton neighborhood. I made the units really nice which is easy/affordable to do with the units being so small. They rent pretty easily since most one beds are going for $800+ in the area. If the property is located in STL county, you could have the tenants pay for water and trash. That's common to see in the county and I do that personally on some duplexes I own/manage in STL county. In the city it is more common for the landlord to cover sewer, water, trash, and lawn maintenance. 

@Dane Hartman, I'll message you an RE attorney here in the St. Louis area. 

@Galit Garsiel Make sure to pad your rehab and holding costs numbers. I generally add in a 5-10% cushion on the rehab depending on the scope of work. For your first deal, I'd recommend a condo, or SFH with 3-4 beds and max two bathrooms. Keep it to a mostly cosmetic rehab and don't get in over your head with a big rehab. That's where I see most first timers get into trouble. Life is not HGTV, and moving walls costs a lot of time and money. Keep it simple, research your comps, and if you break even on your first deal, consider yourself ahead of the game. You'll learn faster by getting into it than sitting on the sidelines seeing others do it. Just be smart about it. The market is shifting, so look at the most recent solds and current active listings to see how long they were or have been on the market.

Hello @Prakash B.! I am an agent and investor in the St. Louis area with Mogul Realty. Our brokerage has a PM company that you can work together or independently with, and I have other PM companies that I can recommend if you want to send me a message. Most PM's are going to charge 10% for this type of building. When you get into the the 10-12 unit buildings, you'll see them drop their fees to 8%. Filling vacancies is typically equal to 1 month rent. So if the rent is $750 per month, they charge $750 for photos, marketing, showing the unit, background check, etc. There will also be fees for maintenance trip charges. We hve a fee sheet that I can send that may be helpful for you as well. Hope this helps and let me know if I can assist any further! 

@Nicholas Jackson I am an agent/investor in the St. Louis area and help 10-20 house hackers like yourself per year purchasing MFH's and SFH's. My advice is to stick with MFH starting out and look for opportunities within a property that others don't see, or don't want to do. Turning a one bed unit into a two bed, rehabbing a unit, or asking a tenant with low rent to move all fall into that category. Most of the MFH's will be in the city which has it's rough parts, so you want to work with an agent who knows the neighborhoods well, and can honestly tell you whether it would be a good fit for you or not.

Off market properties are fine to look at as well, however most wholesalers want a quick close and sell as is. Your financing, which I assume is FHA, will require a 30-35 day close and can ask that items be fixed prior to closing. Sellers were and still are leery of going with FHA even on the MLS, but they are getting higher prices selling to an owner occupant than an investor so some just deal with it. Hope this helps and let me know if you have any questions about our market. We have a BP meetup in STL that mets up every last Thursday of the month with like minded people and investors!

@Hector Valadez are you looking to keep your SFH in California or sell and invest? My market in St. Louis attracts a lot of East and West Coast buyers because the dollar goes a lot further here and the city has a lot of multi families. Cost of living, taxes, etc, are all lower, and there is a strong rental market especially in our South City area where there are top med schools, hospitals, and a booming tech industry.

Out of state investing can be difficult so you want to make sure you have a good team in place. Our brokerage and sister companies offer RE services, PM, and construction services which a lot of out of stater's find convenient.  If you have any interest in learning more about our market, feel free to reach out. 

@Nathan Ravi, welcome to BP! I am a St. Louis agent who specializes in multi families and has the contacts that you're looking for. Let me know if you want to connect and chat further! 

@Josh Middendorf there is a BP meetup/happy hour here in St. Louis every the last Thursday of the month in Dogtown. There is a wide range of people there from investors, agents, insurance, lenders, etc who are great resources for anyone in RE investing. The link is down below with more info. Let me know if you can make it there next month and we can plan on talking more there!

@Nathan Murith and I have worked together as well and know he would be worth talking to about the STL Market from the investor standpoint as well.   

https://www.stlreihappyhour.co...

@Nathan Murith