All Forum Posts by: Crystal An

@Nicholas Covington Thanks so much Nicholas! Would you be willing to share what other things about the property that you might check in order to determine whether to lend on it (aside from it’s financials, location, market potential, etc.)?

Hi BiggerPockets! If there's anyone that's familiar with commercial lending, I'd love to get your expertise. I'm looking to purchase a duplex with a giant lot that is zoned as multifamily. The initial purchase will be with a standard loan with 20% downpayment. 

However, we are looking to build a couple more units in the lot (with permits) so that it will be 10 units. Does this automatically qualify the property for a commercial loan when we refinance? Or are there additional considerations we should be aware of that would prevent this?

Thanks in advance! 

@Carnet Williams There are multifamily syndicators that put out free content for choosing markets and neighborhoods, and where to exactly get that data. You can check out Neal Bawa’s “How to choose markets and neighborhoods” course on Udemy - a google search should get you there.

He has specifically backtested data so he gives thresholds of what you should be looking for (i.e. pop growth over 20% since 2000).

Joe Fairless, another syndicator, also has a podcast on how to choose markets - he looks at similar indicators as Neal. The transcript of the podcast is in his Syndicator School website. Both Joe and Neal have systematic approaches to choosing markets.

I felt that having thresholds was really helpful in analyzing markets so I could have some comparison point. Otherwise, it was hard to tell what the data was saying.

@Will Barnard

Great tips! I wasn’t aware of the rule for realtors — some of the ones I am in touch will work with wholesalers to provide deals. I’m guessing this funnel won’t be allowed either?

@Mike S. This is really practical advice for vetting wholesalers -- thanks so much for such a detailed and thoughtful response! Are you a wholesaler yourself, or do you tend to purchase from wholesalers? 

Hi Mark,

Thanks for your reply. Is there anything you could expand on what you think due diligence should include, that most investors might miss? 

I personally would: 

- Ordering an inspection

- Checking public land records for liens 

- Using title insurance and checking the title report 

Looking forward to hearing your thoughts. 

Hi BiggerPockets,

I'm aware that purchasing deals from wholesalers is risky. However, I'm wondering what the difference is between a deal from a wholesaler vs. an off-market deal from a realtor. Are off-market deals from realtors still regulated? 

If anyone does purchase from wholesalers, what "checks" do you have in place to protect yourself before you decide to close? Please let me know if you know of any resources out there that answers these questions already.

Thank you all in advance! 

@Account Closed 

Congrats on starting your first BRRRR -- that's really exciting! How many OOS properties did you invest in before you were comfortable doing a BRRRR? Also, do you mind if I ask what cash on cash rates you look for before going through with an offer? Using the MLS I've seen very few surpass 10%, but I'm not sure how much more to expect when having a team in place.

I haven't flown out yet -- so far, I've been using Google Street View and an assortment of neighborhood data sites. However given the responses to my post, I think it's definitely worth flying out to meet potential team members and getting a sense of areas to invest in. Thanks for the tip! 

@Joe P. Thanks for sharing your experience and being so transparent! Did you have anyone do an inspection prior to purchasing? Or if you did get one, was the inspection report not detailed enough to highlight the potential problems? 

And a question to you or anyone in this forum -- 

When estimating capex and repair costs, is it better to: 

(1) Have an agent + contractor walk through the property and perform an estimate then

(2) Get a third party inspection report, and then send it to contractors for estimates? 

@Ray Johnson

Ray, thanks for your reply. I'm looking at SFRs that are 75K-100K range that can cash flow from 800-1.1K. The areas appear to be around B- to C. I didn't find many areas where median home values surpass 100K and still cash flow well. Since you look at B class properties, let me know if you saw differently than me. 

Also, where do you assess vacancy and rental demand?