All Forum Posts by: Franco Li

All,

My colleagues and I have created a free real estate analytics platform, in hopes of allowing amateur and professional investors, agents, and lenders to get an unbiased and independent view of their opportunities and projects. 

Crunching an investment property is now multi-dimensional, shareable, and tremendously easy. You can run stress scenarios and observe market data, and even get sensitivity analysis on rental rates.

Check us out! Its free to sign up, and free to use. Good luck all!

www.divismart.com

To be honest, LoopNet is sort of misleading because they never provide you details on their calculations. Also, the agents who list on there tend to overvalue to make it look good. 

Real estate prices in certain areas are outrageous, and I'm hearing a lot of bears out there pining for a housing market crash before getting in. For all you bears, consider this: the real estate market in 2008 is less regulated than it is today, and barriers of entry as an investor or homeowner are higher than before. 

Today, we are experiencing considerably more financing requirements than the past, and lenders are learning to actually use metrics to gage a person's ability to service debt and the underlying collateral, rather than simply originate, recycling the loan, then walk away. 100% financing to individuals w/ 600 FICOs is laughable these days, but was a reality in the past. Today, getting a mortgage is a pain in the ***, and although there are non-traditional lenders who have filled the sub-prime space (thank you fellow members), another real estate crash seems very unlikely as foreclosures will probably never again be as dramatic than 2008. 

In saying that, there will likely be a market correction which may still effect housing prices. Easy money policies and cheap oil are overheating certain areas, and this tech fanaticism isn't helping - i.e. SnapChat valuation. But if you are a borrower questioning whether to buy now or to wait, consider other factors impacting the housing market and stop waiting to see another 2008 dip, because you'll probably be missing out on a lot of opportunities. 

Of course, I may be incredibly wrong HAHA. 

@Jeremy Baker

I would say to hit up the local lenders and credit unions. Conventional banks will not get you close to that, but there are other banks who need to originate!

Think from a lender's perspective, I'd want to hedge the worst case scenario. True, your investment might seem profitable now but who is to say in 5 years that your market is still attractive and rents are still performing. Moreover, who is to say that you as a borrower will be fully employed, have liquidity, limited debt, positive history, and I will not have to worry about your ability to repay me. Unless you have pledged some other assets to me, I would want to hedge all the downside, and 80% LTV seems like a good place to start.

Also, lenders have to recycle their debt. They originate their loan with you, but most likely they'd like to sell it in a pool to someone else; for them to get away from the convention (i.e. 95% LTV, 2.00% APR for 50 years?!) would be a tough sell.

Now, as an investor, you can certainly find lenders who are more flexible and can provide you up to 90% LTV on the home.

All,

My colleagues and I have created a free real estate analytics platform, in hopes of allowing amateur and professional investors, agents, and lenders to get an unbiased and independent feel for their opportunities. Crunching an investment property is now multi-dimensional, shareable, and tremendously easy. You can run stress scenarios and observe market data, and even get sensitivity analysis on rental rates.

Check us out! Its free to sign up, and free to use. Good luck all!

www.divismart.com

Here is a sample output/report:

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

Remember all, its free!

If you'd like you can pay her the standard broker's fee of 3%. If you don't want to pay that much, hell just advertise for her and get her a lead or two. That'll make her day.

So I invest in a lot of SFRs on the east coast. I can tell you that if you want to retire and live relying passive cash flow, this strategy is not for you. I invest through this medium because I want to make extra income (be my own boss as well) but I am an active investor. My investment horizon is short - usually 5 years - then I sell and turn my capital over. This way I do avoid major expenses on the home. In conclusion, I do not think there is really such a thing as sitting back and cashing in the rental checks. There is definitely a steady stream of hard work that comes into play. And to be honest, that is what makes this all so fun!

It shouldn't come as a surprise that lots of places cash flow, given that a lot of areas have a low price/rent ratio - i.e. a good sign for investment. I suggest keep crunching the numbers, but be extremely mindful that taxes come into play, capex, and other sudden expenditures might spring on you. Your strategy when you return home is spot on btw. Good luck!