All Forum Posts by: David Cruice

@Jeffrey Mcintyre best of luck with your real estate investment career.  Keep at it and success will come your way.

Welcome @J.D. Barton, hope you find what you're looking for - education and deals!

@Andrew Lawrence, finding yourself a new lender. The scenario you give above screams of trying to fit a square peg into a round hole. If you are planning to live in one of the units (house hacking) you can get an FHA loan with only 3.5% down and an interest rate usually in the high 4's to low 5's. Check out this link for FHA Loan Limits in 2018 for Washington State. https://www.sammamishmortgage.com/washington-fha-limits/

@William Huston, you'd be overdoing it if you purchase Quickbooks Pro.  QB is a general accounting software that can be used for nearly all small businesses.  However, you're not really a small business; you're going to be a property management company so get yourself some good property management software.  All the good ones have a robust accounting module as part of the platform, so you'll be good to go.  You can also list your properties, have prospective tenants apply online, screen them, accept online payments from them, and have them enter work orders online.  Does QB - Pro or not - do any of this?  I don't think so.  Look into Rent Manager, Yardi Breeze, and Appfolio all of which are very good.  However, I've heard particularly good things about Rent Manger.  Best of luck to you.  

@Jeffrey Mcintyre add NPV and IRR to your list. Brokers and owners aren't going to share their rent-rolls and P&L statements just because you ask. Most of them with larger deals will want to see proof of funds before releasing such information. Once you know how to set up your model and analyze a deal, it just a matter of inputting the numbers that will "eventually" be given to you, and doing your due diligence to confirm those numbers are correct and no expenses have been left out. To assist you in this, I would suggest your purchase Frank Gallinelli's excellence book, "What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Key Financial Measures". You can get a copy on Amazon.

Check the HUD/FHA web site. They should have a listing of them.

@Spencer I. please give examples of the types of title issues you are referring to?  Did you acquire these properties at a tax lien/deed sale or traditional purchase?

Hi @Brandy Downing.  It's a dud.  Most seasoned investors wouldn't go near it.  With a basis of $138k and only $1,000 monthly rent, your well below the 1% rule (a basic back-of-the-envelope calculation used by investors to quickly determine a go or no-go decision).  In addition, you're also well below the 2% (income-expense ratio) rule.  Too much squeeze for too little juice, and you'd be very close to getting burned on the deal should you have an unforeseen major expense such as a nightmare tenant you'd have to evict and/or capex such as replacing the AC or roof.  You'd need everything to run perfectly for this dog to hunt!  Sorry!

Clear title is squeaky clean free of any and all encumbrances.  An example would be an owner who owns the property freed and clear of any mortgage.  Marketable title is one that has "manageable" encumbrances that can be cured prior to closing, examples of such encumbrances would be a mortgage, mechanics liens, municipality or code enforcement lien, etc.  The VAST majority of property titles full into the latter category.  Basically, the chain of title is unbroken and free of defects and transfer of title can take place with little to no additional work involved above and beyond a normal closing.

HI @John T..  I try to help you along by answering some of your questions, but I am not from your neck of woods so I'll not advise on where to invest, Union City, etc.  

(1) Follow your mortgage broker's advice and go with a low down payment on your first deal.  Always leave yourself with some cash reserves.

(2) Get yourself an independent mortgage broker - preferable one who specializes in, or at least is familiar with, FHA loan. Better yet, try to get your mortgage through a small regional bank or credit union in the area you are trying to invest in. The big banks are a nightmare to deal with should any last-minutes issues come up prior to closing.

(3) If you are able to live in the small MF that you are going to acquire, consider "house-hackng" and getting an FHA owner occupier loan with 3.5% down.

(4) Finally, don't be overly concerned about analyzing crime statistics online.  You'll only drive yourself crazy and scare yourself out of deal.  Pick 2 or 3 areas that you think you might like to invest and live in, then drive those areas on the weekends and evenings.  Get a feel for each area.  If you don't get a warm fuzzy feeling while you're in the area stay away from it.  Basically, as yourself a simple question:  Would I like to live here?  If the answer is "No", then find another area.

All the best with your first deal.