All Forum Posts by: Da'Shawn Murphy

@Chad McMahan Hey Chad, what have you seen as an outcome if the appraisal comes back not in your favor, in terms of needing repairs?

Hey BP! I wanted to ask for an opinion, especially if anyone has been in the same position. Recently graduated college and will be starting work soon, so soon after I will be in position to purchase a property. The options I have would be to go in alone and get a duplex to at least get started and have the ability to rent out the other side. The other option would be to have my grandmother cosign on a loan to have the opportunity to get a 4-plex. However, she has more current debts than I do and we would have to structure how the cash flow would be broken down between us.

I am curious on what your opinions are on which strategy seems more feasible or better for starting off?

Thanks

Hello Anthony! Honestly, there can be a  number of different reasons why you cannot refinance as I have run into this situation trying to assists my grandmother. A couple of the issues that we have run into are, the amount we are trying to refinance is too small for what their requirements are, the way the contract is set up means they may not be able to credit back all of the money you have put into it (such as if you put down a down payment), and some lenders stated explicitly, "that is just not something we do". However, I will say to start with small banks and local credit unions as they are a bit more flexible.

Hey BP!

Does anyone know any good mortgage lenders or bankers that do refinancing for the Cleveland, Ohio Market? I am helping my grandmother search for good banks that will allow her to refinance out of her curent contract that is through seller financing. Thanks in advance!

 No, I had to quit my W-2 job so I could take this internship that I am so I can graduate early in December instead of waiting until next August of 2022. I have been trying to find the right deal that shows the house is undervalued and then be able to present this opportunity to someone who would be willing to put up the iniotial funds and credit, and the nwould be able to get all of the money back out. Have been certainly trying to find alternatives.

HI @Jackie Jake! I have not yet considered seller financing as of currently since most of my funds goes to my tuition that is not covered by financial aid and other loans. I have spoken to my grandfather about this after the 5th month of me graduating since he plans on moving after I graduate and he owns his home free and clear and this would allow me to utilize the equity in the home to create more deals.

 

 

That makes sense. I tried to do a lot of the research to find the deal and help manage the tenants since I have done that for about three years now so I am familiar with that. I figured if I do the majority of the work, especially upfront and still insist on them taking 75% of the profits, then I could show the experienced investor how serious and committed I am to being a real estate investor.

That is what I figured, it is the lack of credibility that is holding me back from finding partners. I know that personally I wouldn't walk away because this is a field that I am really anxious and excited to get into, those neighborhoods are just areas that I live or have lived in and I am familiar with. I can definitely understand skin in the game to show true commitment for someone who doesn't know me. I agree that it would probably be best to find people I personally know first, then this can help me build credibility and experience.

Hi Connor! 

Honestly, it all depends on what you are looking for. If you are looking for appreciation then you would look for data over the past maybe two decades to get an idea of the trend of that particular market and what the appreciation return is on average year over year (just don't rely on predictions). 

If you are looking at cash flow then you can begin with the simple rule of thumb with the 1%-2% rule to get an idea of it may be cash positive (again just don't rely on this method). In example, some markets in Cleveland have homes that meet the 1% rule, but because property taxes are high, it essentially wipes out a positive cash on cash ROI. You have to do some digging to get an average of what the property taxes are going to be as well get an idea of what the rents are going to be in that area. You also want to get familiar with the size of the home is and what is selling and what has sold to get an idea if the idea is undervalued or overvalued. This is just a few strategies I use so I don't spend 6 hours a day staring at homes (now).

Once you adapt some habits that work for you then you'll know an investment worth running the numbers on. Hope this helps!

I would agree with Jon, after looking at the markets you prefer, you will then be able to look at properties and say "yay" or "nay" to them. Example, in the Cleveland market, I know what areas are better than others and where property taxes are $2,000 to $4,000 more if they were in one of the neighboring cities. You'll also get an idea of what rents would be in those markets and can then make an educated guess on whether or not it may reach your preferences, or especially if you try utilizing the 1%-2% rule because if you know the area and can estimate property taxes then you will know if you should spend more time on it. One thing you could also do is look at square footages and compare to what it is selling to and what has sold previously and you will have an idea if it is possibly overvalued or undervalued.

Hope this helps!