All Forum Posts by: Franco Li

I think you're in a great situation - sort of - in that you've identified troubled tenants at the beginning of your rental investment. Better move them asap and look for better tenants. Hey, its a learning process!

I know that there isn't a one size fits all model, but efficiency to me is always the most important; measured by how much money does my $1 dollar generate - i.e. % ROI. In saying that, I've invested in both lower priced places and higher ones, and at the end of day its how effective your money is working. My lower priced homes make a higher % return, and I would do more units of those if I could.

Good luck!

Seems like your template is largely accurate - albeit messy - are you looking for something in particular? Only thing I can think of is the lack of a rental assumption; though I assume you did it on purpose? 

I grew up in Staten Island - South Beach! 

I think your strategy is an awesome idea. I started out investing part-time as well, and it became both a hobby and passion. I think the best advice I've learned is to understand every leverage option out there, and to understand how leveraging works and the process and requirements of banks. I recommend seeking out credit unions and local lenders to achieve higher LTVs, although you might be paying a premium on pricing. Make sure you have enough liquidity at all times - which is why you should probably have a full-time job first. Moreover, NY properties are harder to cash flow vs other areas, largely because the prices have bid up, but there are still some opportunities especially on the island. Lastly, learn how to model all your cash flows, and be able to compare different opportunities! 

I've worked with a local lender in upstate NY that allowed for 85% LTV! The rate was a point higher than market-going rate, but it was a good experience!

I've actually had this experience once. My first time investing, i didn't factor in the county/school tax in the area and was only looking at the local city tax, which was an additional $1000 per year. Ultimately the cash flow was still really good, but I did try to fight the county on the taxes - had a representative do a re-appraisal. At the end of the day, it still didn't matter because they gave every excuse to justify the tax $$ was correct.

After that, I typically am extremely conservative when I look at opportunities and do as much research as possible. When modeling these opportunities, I would use 5% of purchase price - even though it may not be realistic in different areas. 

Keep in mind please, that if you are buying the property at a premium to a prior sale - i.e. paying $100K vs previously sold at $60K - the taxes may actually increase, because the government may actually use your price as a justified appraisal value. 

Larger banks (WF, BoA, etc. ) will most likely never provide you anything higher than 80% LTV. They will also take extremely long time to process the mortgage, and leave no room to negotiate. What you may benefit from seeking financing through them is you may save (most likely not) on pricing if you are a customer already - i.e. checking, savings, brokerage acts, etc.

I think you should look into local lenders and credit unions who will probably be able to provide you 85%+ LTV, although you might need to pay a higher APR. Still, if the numbers check, bc your lower down payment, or initial dollar on investment, you may see even a higher % return! Good luck.

Hi Everyone!

I am the founder of a real estate analytics startup called DiviSmart.

As a real estate investor, I've found on numerous property hunts that investment-related information is not too obvious, and certainly not provided by many brokers/agents. DiviSmart wants to make real estate transactions as transparent as possible, so we work with both investors and agents to provide independent and unbiased investment analysis - think CarFax or a Moody's/Fitch Rating Agency for personalized real estate!

Here's one we did for an investor in Brockport, NY:

http://divismart.com/viewreport/divismart/61-westw...

Let us know if you or your team have any questions or is interested to learn more. If anyone is interested, you can signup for free and use the promo code BP2017 at checkout to get a free report - just to try it out!

Sincerely,

Franco Li

Co-Founder

You can sell when you are not present, especially since we live in a world where docs-sign should suffice for a good number of paperwork. Logistical complications is hedged by the technology of today. You can theoretically be holding while not present, and should not face any risk of losing ownership - unless you are a foreign diplomat based in the US, or you have some sort of personal ties to the government of your home nation. 

All in all, the scenarios are more improbable so I wouldn't waste time to hedge. Good luck though!

I've had to replace one for a property in upstate NY. It was similar to the price you've done it for, but still not surprised that someone would tell you 3x that....