All Forum Posts by: Connor Dunham

@Wade Stahle if you're waiting for the market to soften, I think it has a little bit if you look at the inventory numbers. Waiting also means you're subjecting yourself to interest rate risk. If the rates go down, you can always refi, but if they go up, you're locked in. What is your strategy (and time horizon? Value-Add, Long Hold, cash flow, total return, etc. The answer changes significantly based on your strategy. In figuring out your strategy, you'll answer your timing question.

Try talking to some local mortgage loan originators such as first rate or titan. I'm sure they originate more than just conventional notes. The recorders office like was mentioned before is the other place to look for clues. 

to do a deal of that size... You would need: 

17,500 3.5% down payment

10,243 3 months PITI for reserves (conventional requires 6 months)

$5,000 for closing and other costs. 

PMI can be a killer. it goes down for every 5% step you take towards 80% LTV. If you put 5% down, rather than 3.5%, you're going to see a reduction in PMI required each month. @Ali Boone has some good info. Highly recommend reading up on crunching the numbers, getting real numbers to work with for expenses, insurance, reserves, etc...

Trevor Burns I would hit up all of these banks as they have access to the big money: http://www.aidea.org/Programs/LoanParticipation/EligibleFinancialInstitutions.aspx Also, I'm in Anchorage (travel to Fairbanks often) and always looking for deals.

Hi Jim, 

Welcome to BP. Definitely listen to all the podcasts and use some strategies recommended on here to work a better deal. One I can think of for commercial, is to offer where the numbers make sense, then come back after they counter with 5-10% seller financing.

Good luck!

 I think, if you make real estate into a business (not just an investment), you might be able to hit that 25% per year growth you're looking for. Good luck on your goal!

Welcome to bigger pockets. If you are looking for some reading or maybe an audiobook, I highly recommend Millionaire real estate investor by Papason and Keller.

Welcome to the site.  Try the podcasts. Cheers.

Hey Jo,

I did not catch if there was property management expense in there... Important to pay yourself.

Your vacancy seems high (I use AEDC's number - currently 3.2%), and you can expect about a 100 / month improvement if you upgrade the boiler. On the plus side, you don't need to account for 1 unit of vacancy if you occupy one unit. 

I think if you are going to evaluate price too, square footage is a good measure for how much you should pay and how much each unit should rent for. A 1200 sf 3-2 without a garage can rent for less than a 1400 sf 2-2 with a garage. The info in your spreadsheet doesn't include this, but it's essential to analyzing the deal.

As far as the PMI goes - you have to go in with a strategy to refinance. I've read fha PMI stays for the life of the loan, but haven't checked up on the rules recently. So, with that in mind, your plan would be to buy, watch the market and hope it goes up. Traditional loans (non fha) would be able able to drop PMI at 80% ltv. So, then you'd have your downside case at least be known. I'm a fan of using a 5-1 Arm for the buy-refi out of PMI strategy.

What is your strategy for raising the rents? All at once, $100 per year? Just be prepared for the time it would take to re-rent or raise to market. 

@Connor Maloney After purchasing the property in January (of 2014), I had the energy Audit done in February. This starts the timer to complete the improvements and get a post-audit done. 18 months for the rebate or 12 months for the rebate and interest rate reduction if AHFC is financing your loan. So, I should have waited for two reasons: I wanted to do the work myself, but didn't budget the time correctly, which lead to me needing to save up funds to pay for the work, so, I should have waited until I had the funds to pay for at least half of the improvements before getting the audit (5k). Second reason was that after buying a house, you usually want to make it feel like home rather than a rental. This leads to you going around buying things like furniture and decor further putting a strain on your budget. 

As to getting the best bang for your buck - buy any big plumbing and heating items from supplyhouse.com, and have a plumber install them (stay away from the big guys). they take awhile to ship but are better than the price you get on parts after the contractor markup on parts. places like ferguson only sell to contractors (If you know one that can buy here great!). The contractors then mark up the product they buy at ferguson. Central plumbing and heating, even after their PFD sale, are super overpriced. For insulation - just go with the most basic materials. you can gain the most points for the least amount of money in this area. Always get three bids for each project.

finding energy rater - I just had them assign one. I've found angies list helpful to find contractors and read reviews.