All Forum Posts by: Daniel Lopez

There is an off-market triplex in my local area that is completely rehabbed and fully rented out. I want to purchase it but I don’t have the 25% down payment to get a conventional loan (non-owner occupied). My creative solution is to use a private money lender to supply the down payment and then qualify for the conventional loan under my own credentials. Does any one know if there are any legal issues regarding this strategy?

@Brian J Allen

How would you go about getting an accurate appraisal of a SF in a MF neighborhood (and vice versa)? I feel like the bank would be hesitant on agreeing on a high appraisal if there aren't any comps to justify it. Would you have to evaluate the property as a rental property and calculating it's value based off the rents you can get?

@Syed Khan

I’d love to hear more about your work with the Local Housing Authority. Is this to have Section 8 tenants in your property? Do you have to be in a particular zip code or neighborhood to work with the LHA? I’ve been looking at rehab grants to fix up some multi family properties, but they require renting to the units to Section 8 tenants for around 70-80% market rent depending on the average income in the area. I wonder if that is for the portion that the tenant pays or the entire rent. If you have any connections in the Local Housing Authority, I’d be interested in speaking with them on some opportunities.

@Syed Khan

That’s a great strategy Syed. I’ve heard of finding local small time landlords and seeing if their interesting in selling before. I’ve always wanted to try it, just been focused on my properties. Do you look at Craigslist or Facebook Marketplace for current landlords? I’ve gotten some great leads from there. Just look at their rent ads and call them asking about their interest in selling that property or any other property.

@Joseph Belgrad

I'll definitely try to connect with Brian, he sounds like a great agent. How has he assisted you in your investing in Worcester? Would like to hear about your experience in the area.

@Syed Khan

I'm an investor in the Worcester County area starting in 2019. I currently acquired a triplex in Millbury last December and I'm always looking for more properties to add to my portfolio and increasing my network. I'd like to hear about your business model in the Worcester area and how you've adapted throughout the pandemic

@Nate Mullen If you wanted to reuse the FHA/203k loan, you will have to first refinance your current FHA loan to a conventional loan. You are only allowed to have one FHA/203k loan in your own name at a time. If you have a spouse or business partner, they can have an FHA/203k loan in their name so you can do it that way as well if you don't want to or can't refinance. Of course they would have to live there for a year and as long as its been over a year you do not have to owner occupy your initial FHA/203k property.

The typical 3-family property in Worcester goes for between $320k-$380k, if you were going to use a conventional mortgage to buy these as investment properties you would have to put 20%-25% down. The $50k you have earmarked my not be enough for this strategy, but if you were flexible in where you lived you could owner occupy the property for a much lower down payment (3.5%-10%) depending on what program you want to use. I'm using an FHA/203k loan to purchase a 3-family in Millbury, fix it up and live in one of the units for a year. I will then move out, completely rent out the property, and then refinance to get my initial investment out. This could be a viable strategy for you, but I suggest you do your research on these owner-occupying programs to see if they work for you.

Hi Nate, 

I'm also an investor looking in the Worcester County area. I think the BRRRR strategy is a good one to get into, but remember that the many of the multifamily properties in Worcester were built from 1890-1920's (at the latest) so be prepared to see possible asbestos, lead paint, old roofs and siding. These expenses could blow away your $50k rehab budget so make sure you do your due diligence and have a good contingency buffer (10-15%).

I suggest speaking with a local real estate agent to get a list of zip codes and neighborhoods where rentals are more desirable. Start your search there and just keep running the numbers.

Have you looked into using private money as opposed to hard money? You would be able to negotiate the interest rates much more than with hard money, and it takes the same amount of analysis.  

I’ve been looking for triplex and quads in the Worcester area for about a year now, and I have seen some that would cash flow with an increase of rents to market rate. I haven’t pulled the trigger on any yet because I didn’t know the area well enough and anything good enough to cash flow gets snatched up quickly by cash buyers. I’m currently looking for some multi’s that need some rehab that way I can force the appreciation and keep them long term.