All Forum Posts by: Dustin Robideau

Good Afternoon BP,

I'm looking into building storage units in the basement of a 10 unit multi-family I own/manage and wanted to hear if anyone has done this and would be open to sharing some advice. 

There's 3 completely empty rooms(unfinished) in the basement that I'd love to be able to monetize so I was thinking of building storage units and offering them for $45/month or so. 

Does anyone have any experience doing this and if so, is there anything I should be on the lookout for?

I'm mostly curious about:

- What to charge tenants that are paying between $650 - $800/month for rent?

- What size would tenants deem desirable?

- What materials would you recommend using for the construction?

- Any zoning regulations to be aware of? 

- Is there any reason this may be a bad idea or anything I'm not thinking of? 

Typically, the smaller the bank the more flexible they are and I recently learned that it can also be helpful to work with a bank that knows the property. 

Last month I purchased a 10 unit and got financing from the same bank the previous owner used. I'm leveraged up to my eyeballs and roughly 40% of my income "doesn't count" so I was getting no after no before getting approved very quickly by the bank that was already very familiar with the property.

You may not be able to use the exact same bank if it's a national chain or the previous owner owned it outright but I'd recommend looking at local banks who may know the area well and/or have loans on comparables properties.

I'd confirm with someone with more experience on this and while it may sound counterintuitive, you might want to look at 5+ units since they will be considered commercial. For commercial properties, they weigh the building's financial situation much more heavily than your personal financial situation. 

Easiest option? Get a co-signer.    

Bigger Pockets strikes again. Got a problem? A creative solution I've never heard before is recommended by by a philanthropic stranger. 

Thank you very much @Frank Chin. 

This could be a great option if I can factor the additional expense into the deal. 

Hi BP,

Looking for some financing advice as I find myself in a terrific cashflow position that lenders should love loaning to but on paper I'm falling short. 

The primary factor for both circumstances is that I rent out 2 bedrooms in my primary residence for $2,000/month. The commercial lenders I'm speaking with won't lend to me because the income is not listed on my tax return even though I can provide transaction statements showing that I haven't had a single month of vacancy in either room in 10 years.

Supporting details:

Property 1 - Primary Residence

Equity: $200,000 

Owe: $343,000

Income: $2000/month

Property 2 - Rental Unit

Equity: $200,000

Owe: $365,000

Cashflow - $300/month

Currently paying down $2300/month in principal a month across the properties(one is 15 year)

2017 W-2 Income from my 9-5 is $103,000

My budget is based off of a $70,000 base salary since I work in sales and after all of my fixed expenses are paid I have $3,000/month of disposable income to spend on food/life and I live a modest lifestyle. I averaged an extra $1800/month after taxes of commission in 2017 so I usually save between $2,000 - $2,500/month in cash a month. 

Credit Score 745

Challenges:

Income on primary residence isn't being counted

I purchased the 2nd unit last year and had to evict my first tenant for non-payment so I have to use 75% of the income projections on the lease for the new tenants.

I'd like to secure my first multifamily as fast as possible but I'd really like to secure financing first so I know what price points I can target. I'll likely be refinancing one of the properties to pull out equity for a down payment as I understand I'll need to be putting down 25%. 

Questions:

Do you know any commercial/portfolio/private lenders that would lend to me?

What steps could I take to make me more attractive on paper?

@Robert P.

Hi Robert,

If you're still connected with that agent I'd appreciate an introduction for some help on a multifamily I'm working on. 

Hello, 

I'm currently working in sales and have been managing a few rental properties on the side for the last 10 years and it'd be great to get a job where I could learn more about the industry before transitioning to RE full time. 

Are you aware of any sales jobs in the industry aside from Real Estate agents and mortgage brokers?

Would there be any additional requirements/challenges to getting financing for a 10 unit over 10 SFHs?

I suppose another good question to ask would be: Do you know if building a portfolio of 50-100k properties is the best way to maximize ROI or would any markets provide a similar return for higher value properties?

Greetings Everyone, 

I currently own 2 condos in Boston that I rent out but am painfully aware of the low yields relative to other parts of the country. I work in sales and have been offered a position to work entirely remote which would allow me to move/work from anywhere in the country. I'd like to sell my properties and relocate somewhere with a more lucrative rental market to build a better income stream. 

Current Situation:

• I currently manage 2 properties that are worth a combined $1,015,000 
• If I sell I will be left with around $300,000 in cash to start
• Since my mortgages started with 20% and 30% down I'm hoping I could leverage even further

Since I've read the best investments are in the least desirable places to live, the goal would be to buy as many high yield properties as I could in 1-3 years and then pay a management company to manage the portfolio.

If you were in this situation what markets in the U.S would you be looking at?