All Forum Posts by: David Espinosa

Thanks! I should be closing within the next few days doing a house hack. I haven't figured out my long term goals yet but will be saving for future adventures for sure. I plan on getting my licence and experience as a landlord so the banks will consider me for larger deals. Making connections in the REI world now and learning as much as possible. As far as the appraisal my area has very little multis in the recently sold category and he used what he had and didn't use any singles. It cant hurt to get to know your local appraiser/s and even add them to your team of people you call for situations just like this. The more people you know the better!

I've just had my first appraisal done on a 4-plex they only used multi-family and even used a 16 unit that was made up of 4 of the same buildings as mine. I would call your local appraiser and ask how he would appraise the property. They used similar comps method and revenue method for mine.

I would look and talk as professional as you can.  I would also have very organized paperwork.  Be prepared look up what a bank or realtor or whoever you will be meeting with will be looking for. You want a realtor to take you serious have a preapproval letter from a bank and a clear idea of what you are looking for. You want a bank to take you serious look up what banks need to service a loan and have it all neat in a binder or folder prior to talking to them and bring it all in with you. You want a fellow investor to take you serious listen to them and don't act like you know everything but know what your talking about as much as possible. And don't be ashamed or feel insignificant just because you are young. Alot of people will actually be impressed and help you out more than you think. Anytime you say you're going to do something, do it!  Never be late to anything. You will be fine don't stress. If someone isn't taking you serious, you don't want to be working with them anyways.

So far Raphael posts here on bigger pockets and also on meetup.com the kreia group you can go to kreia.com there are also a few other meetups on meetup.com for rei 

We have a newbie biggerpockets meetup that was started last month the new date should be posted soon.

I would suggest using different banks it makes it easier to not to cross contaminate your accounts. I would suggest using local non-national banks they are eaisier to work with and you can establish a relationship just going to use them regularly instead of just poking in one day asking for what they have for you. Hope this helps.

David Espinosa

You most deffinatly can. The most successful flippers all they do is go after the next deal. They have teams of contractors to fix the places so they can work more on there buisness and less swinging hammers. You need someone you trust to run the rehab and keep everyone accountable. If all you are doing is calling contractors from afar they will do bare minimum and take shortcuts to make it more profitable to them. Be carefull. Hope this helps.

David Espinosa

I would look at properties that are simular and a touch older/not renovated and compare. I would only pay at current occupancy not projected occupancy or projected rent rates. Only what it is now. I would also suggest since its a larger purchase to have an electrician, plumber, hvac, type people do their own perspective inspections, It may cost a little more but will give you a better piece of mind. Also look up what else these flippers have sold and call the owners and ask about the quality and longevity of their flips. I personally think your vacancy and maintenance estimates are a little low. You also need to factor for cap-ex, even if everything is new now everthing has a life expectancy. Also if managment says 7% I would bump it up to cover for placement fees and such if not included. Hope this helps. 

David Espinosa

Look into who pays what utilities. If you pay utilities you have to factor that in for sure makes a big difference. Also I would suggest using an estoppel, it will help in the future if say for instance the tenant claims the last owner required a double deposit because of his bad credit. You can get one for free from this site just go to the files section. Also factor for lawn or snow removal since its a triplex I doubt you will be able to put that on tenants. Hope this helps.

David Espinosa

1. For insurance it can depend on location, how old the house is, what the construction of the house is, if you plan on getting full rebuild or just enough coverage to cover the debt service. I personally use realtor.com or trulia to get my estimates, it's been close for me anyways.

2. I would personaly call some of the bigger managment companies in your area and they can give u a round about number but remember location is key in alot of markets and one streets are more desirable while others are less desirable.

3.Closing costs can vary lender to lender and on type of loan. Typically it is around 2 to 4 percent of purchase price.

4. I can't help much here but I've heard Jay Scotts book on Estimating Repair Costs can help.

5. Pmi can be .5 to 1 percent of purchase price annually and fha also has an upfront one as well at i believe 1.75% of purchase price.

6. Repairs are going to depend on age and condition of house. If you have a 100 year old house your repairs will be much higher than a 5 year old house. Dont use a percentage on this number instead use a hard number because if you buy a cheaper house it may not be realistic to say its going to cost less to repair than more expensive house. The plumber is going to charge by the hour not by how nice your house is.

7. Cap-ex is going to depend on how old your house is or how old your mechanicals are. If you have an old roof you better use a higher percentage for cap-ex if you just replaced all the plumbing, electrical, roof, heaters, ac units, probably not so much but still be conservative. I would also use a hard number not a percentage but soley based on specific house. 

8. You can estimate on market trends but don't use as hard, this is deffinatly whats going to happen. Look for long term growth in jobs and population. It tends to tell you that people like it there and want to be there. So if property prices have been consistently rising you can ususally assume the same for your property as long as its not in a lower class neighborhood which tend to not rise in value. 

Hope this helps

David Espinosa