All Forum Posts by: Erica Osborn

Orlo! Hey, I know these fabulous people who commented here :) @Corey Chonsky and @Taylor Hudgins! 

The main things I thought besides what Corey and Taylor said....

1. Are you planning on living in one unit? If so, think about using your VA loan if your eligibility is not already in use. (You had mentioned previously being in the area while in the service). You've collected a nice savings for your self, use that wisely!

2. If you do not want, or can not use your VA loan and are still planning on living in it, think about using an FHA loan with a smaller down payment in the 3.5%-5% range. Then you can use your cash for an additional investment property for yourself.....boom 4 doors instead of 2 out of your hard earned/saved money.

3. Keep scouting neighborhoods, analyzing properties and getting real comfortable with the numbers you can see here in HR! Best of luck! Hope to see you around at some networking here in Hampton Roads when things lighten up!

Hey Joseph! If you are analyzing a residential MF deal (4 units and under) you can use basic sold comps of like properties, an agent can help you identify sold and listed comparables and if you are super comfortable running comps for yourself, Zillow and Redfin will give you a head start to see what has sold in the area. 

When you are talking about commercial MF (5+ units), this is where you need to analyze the deal based of of the current rent roll and trailing 12 month profit and loss (provided by the seller) come up with the Net Operating Income and then an area commercial agent should be able to give you the area cap rate (capitalization rate) that like properties are trading at. You then apply that cap rate to the NOI and boom you have your value. NOI/CAP Rate = Value. This is a very basic description, but there are tons of videos on Youtube to help you through a basic eval. MF is a different beast, but can be a blast!!! Good luck!

3/2 SFH in Omaha NE, in our neighborhood in 2011. It was a foreclosure, we were going to fix it up and rent it out. It was a very old home that had been moved and placed onto the current basement that it was sitting on, so the house was older than the foudation and basement. It previously was a duplex, but we saw it as a SFH. Bought it using a regular convetional 25/75 LTV loan and fixed it up with our own money with no intention of BRRRR (I didn't know what that was then). We fixed it up, rented it out ourselves to college students (then the military sent us away), placed property management on it, held it for a few years and cashflowed about $300/m. The tenants eventually moved out and we discovered they had not told us or the PM about an ongoing plumbing issue in the basement bathroom, which leaked into the whole side of the basement each time anyone took a shower in that basement bathroom. Now, picture this...the house was vacant and needed a large repair, we are distance property owners, so we took a trip up to NE from FL, demo'd the basement ourselves, and had professionals come and correct the plumbing leak. While trying to figure out what to do next either renovate and sell, or renovate and hold we received a post card in the mail from an investor wanting to buy it, we were in FL both working in over full-time careers and didn't want to deal with the renovation, so we sold to that investor and walked away with a few thousand dollars. Lesson here for everyone else: MAIL CAMPAIGNS WORK! :)

What I wish I knew: Reply on professionals from the get go, trades, contractors, and property managers. If property management doesn't interest you....trust that because you won't do a thorough and good job! I should have had property management place the tenants and do the screening from the get go. It took 3 months to finish and get tenants in there when we could have paid a professional and had it done in 1 month, the costs would have washed and we wouldn't have stretched ourselves (timewise) to thin. I should have left it a duplex! What I know about small multis now......this would have changed the whole outlook for that investment. I didn't know anything about small multis then. I wish I would have taken on the renovation and flipped the house. The investor who paid me a few thousand in profit then made a nice chunk for herself. 

So many lessons learned!!!!!! The school of experience is where I've learned the most and unfortunately the bad times teach you way more than the good times, so pay attention and do not be afraid to share your lessons learned with others, they are your battle wounds and they make you stronger and better!!!...and sometimes the stories are just plain funny!

My opinion, in this lending environment, is to buy and rehab using your own cash (if you can (you said you have $ to buy & rehab) and you aren't trying to do multiple projects at once (opportunity cost isn't too much for having your $ tied up while you want to do other things with it)), this will save you loan origination fees, interest, lender's title insurance, and some additional closing costs. Then place financing on the project once complete, rented, and the seasoning period is over and pull all of your money back out along with your FIL piece (if properly budgeted). *Note; Identify your end-lender ahead of time to get an idea for their seasoning period, terms, etc. for use in your analysis. (I learned this the hard way). Good luck!!!!

Hey Kyle! Welcome to BP and to Hampton Roads investing :) It's so exciting to be on the brink of your new investing journey. How have you been educating yourself (outside of BP, of course) to prepare yourself? When allowed to gather again, you should frequent any local networking meetups and start to meet the faces investing here locally too, you can look here for them, search Facebook, or Meetup.com! 

In my opinion...First step for you, identify the strategy you want to pursue, that fits your needs/wants/goals right now. Second, identify how you are going to fund that opportunity when it comes across your plate. Third, pull together your team of pros to help you make it happen! All of those can happen at the same time, but it's at least a starting point to help you create that momentum! 

Go get 'em!!!!

@Andrew McCartin Hey Andrew! Amanda has great advice. Basic things I love to see when I am contacted by a new investor looking for an investor friendly agent; 1. Know where you want to start, it doesn't have to be where you end up, but have an idea of what you are looking for, $/door, expected return, neighborhoods you want or don't want, house/building characteristics you want or don't want, strategy you want to use! 2. Have a system for running numbers and analyzing properties. 3. Be ready to get pre approved, have proof of funds, or already be pre approved. 4. Know what you don't know and educate yourself! 5. Be able to laugh and have some fun!!!! A good investor friendly agent should be fun to work with and a great addition to your team. Good luck out there!!!!

@Jeffrey De Los Santos You can place a commercial loan on it in the name of your LLC, the terms are different than a residential loan, but this is the proper way to do it. Seek out commercial financing, a residential loan lender will not be able to do this. That way your investment, insurance, and loan will all be with your LLC. I am not an attorney, but the whole point of putting it in an LLC is to limit your liability. From my understanding, having everything to do with that property in the name of the LLC is the way to keep that liability limited. Please consult your attorney! 😁 Go get 'em!

@Dan V. Hey Dan! When dealing with the city I wouldn't chance it and close up. There have been investors who have told me horror stories about having to open the walls back up in order for them to inspect. The cost of doing that will be more than your holding costs of waiting for the inspector. Be persistent and polite and continue to engage with the inspections department to try to get an idea of when they will be able to inspect, or an alternative way to seek their approval to close up! Good luck!!!!

@Breanna Mackroy Are you a retail agent or do you go after motivated sellers for discounted props? This is what I am thinking the difference is between your sellers and Bill's are. He's a wholesaler his marketing is probably targeted toward seller's who are sitting in more a motivated position, preforeclosure, divorce, probate, high equity, etc. Your sellers, if they are retail, have more of a choice to stay put and wait out this tipping into a buyer's market vs. the seller's market that it may have been resembling before COVD-19. Best of luck in Orlando, I love that area (lived there for 4 years!).

@Jourdan Johnson There are plenty of us investor/agents in Hampton Roads! I am happy to connect you with who ever you may need here. CA money translates well over in VA! Good luck!!