All Forum Posts by: Jay Orlauski

@Gary -

start with people you know , like, and trust - has any family member or friends had a good experience with a particular lender? If not, How about a reputable Real Estate Broker? they usually work very closely with lenders and should know a few reputable ones in your area. You can also try your bank or credit union - let them know you are in the market to buy a property and talk to them about your options - they will pull your credit report and go over it with you , then use the data in the report as well as your tax info and paycheck stubs to confirm your debt to income ratio - this, along with your credit score will help determine your eligibility, max loan amount, and interest rate - these are things any lender can/will do so it is important that you find someone to work with that that you like. If you get a bad feeling about someone or just don't feel a connection, feel free to shop some other options and talk to other lenders till you find someone who is knowledgeable, friendly, and clicks with you. You may want to ask about their experience in lending on investment properties just to make sure they are a good fit for what your personal objectives are. Keep us posted on your progress!

Hi Gary,

If you plan to finance the property than you definitely want to get your pre approval process started as soon as possible. Buy getting pre approved, you will know exactly how much you can afford to purchase and it will also help you to focus your efforts on finding properties within your price range - you would hate to drum up a bunch of numbers only to find out that you do not even qualify for the loan to begin with - so getting that lined up first is KEY. Also by talking to your lender and running some numbers in advance , you will have a better idea about what your expenses will be since they can tell you what your expected monthy payment will be - you can use this as a base when adding in the cost of maintenance like pest control, water / garbage, property management , and other possible expenses. This should help you to make sure that the properties you are looking at are cash flow positive.

I hope this helps some - good luck on your endeavors!

@Mark - your absolutely right , I forgot about that 50% program as it is so rare and under utilized- I got it mixed up with the $100 down program - thanks for the info -good to know.

the $100 program is not just in certain states, but in certain localities and communities. The idea behind the program is to put qualifed buyers into homes in low income areas that need revitalization- so they are trying to build up the neighborhood. In many cases the program is only available to teachers, police officers or firefighters so you will need to do some homework to find if you qualify for the program and if it is offered in your area. There are usually not a lot of these available at any give time, but they do exist. I would talk to realtor who works with HUD homes in your area to find out more about it. You can find a HUD certified Realtor at HudHomeStore.com which is the government's official web site for HUD homes.

my math may be off on this - or perhaps I am missing something , but at $453 / month cash flow - that's $5436 a year assuming you manage the units yourself. If taxes are $11,000 a year - it seems like you would be paying $5500+ a year to hang on to the place. Are you looking for long term capital appreciation? Otherwise , it seems like you would be upside down on this for awhile - also - do your calculations account for a down payment of at least 20% ? It could make a difference in the numbers your quoting. Hope this helps you flesh it out a little

I'm not sure about Oklahoma, but in California, once something is permanently attached to the house, it becomes "Real Property" and is considered to be a part of them home, no matter who installed it. Building a storm shelter into the unit would definitely qualify as something has become real property - but again, that is in California, but Oklahoma may have similar laws - you should check on that to see what it says in your state. I like what Darren said - be in control of who the contractor is and let the tenants know they can build it, but it stays with the home when they leave -

Hello Sean,

Welcome to Bigger Pockets! You've stumbled onto a website with literally hundreds of years of investing experience all rolled up into one informative website. I'm sure you will find many people here to lean on and learn from. I am also an investor here in Fresno. I moved here 13 years ago and have had an opportunity to get to know the Fresno real estate market. I am also a Realtor, specializing in investment properties so I can also assist you in finding some really great deals. Just let me know what your looking for and I will happy to send you a list of homes in the area.

Hi Rodney,

looks like you came to the right place for advice - there are several really good answers here to ponder over. My first investment was a duplex - though I lived in one side of it. Eventually I moved and rented out both sides.

Some of the advantages I found in my experience was the ability to cover the bulk of the mortgage with only one unit. If one tenant did not pay the rent, then at least I had another rent check coming to help cover the mortgage. This, to me, was one of the greatest advantages - I felt secure that I would be able to cover the mortgage payment each month. With a SFR, you don't have much wiggle room for slow or no payments. If your tenant does not pay, you must cover the entire mortgage on your own now - If your evecting, this may continue for several months - with a duplex, at least you would have another rent check to fall back on.

Also, when you consider taxes and insurance - it would cost more in taxes if you purchased two homes and paid for two insurance polices Vs paying taxes on one property and only one policy. So you cover those things under one roof. Cost of acquisition is doubled also since you would be have to buy two houses. ( I know you are just comparing a SFR to a duplex - not two houses, but assuming you plan to acquire more )

This is why I have a personal preference towards multi family units over SFRs. That doesn't mean there aren't some great deals out there with SFRs - at the right price and location, there are several great investment opportunities with them - but given the choice, side by side, I would rather buy and hold a multiplex - which in my area are actually in high demand now.

Some obvious disadvantages are if both tenants stop paying rent, your going to have a big nut to crack - and as others have mentioned - multiplexes usually have the water lines tied to one account / meter and the owner is typically responsible for water payment ( unless negotiated in the contract). Also because usually all uits are the same age, you have the same thing go wrong around the same time, costing double for repairs -

Ex: one 20 yr old AC unit goes bad - two months later, the second 20 yr AC unit goes out.

so those are things to think about...

As a first time landlord 3 tenants may seem a little intimidating at first, but you may find that much like wild animals, many times they are more scared of you, than you are of them - just don't let them smell blood, cause they can still be dangerous. But, with a little practice, plenty of communication, and proactive landlording - you'll be looking for as many tenants as you can get- Good luck with your investments - always re-run the numbers and account for the unexpected ( like replacing a HVAC unit..or two) Keep us updated with what you decide. Best of luck to you.

When shopping for contractors , I typically create an excel spreadsheet and fill it with parameters that are important to me such as availability , time frame, cost , etc. Then I start calling around and I let them know up front that I am calling around and getting bids from other contractors - sometime they ask the best price I've gotten - sometimes they don't - either way - they are prepared to give me their best price and know that I may be using someone else - they always understand -and it makes it much easier to let them down knowing in advance - don't worry about them taking it personal - like others have stated , its a business -they are used to getting calls like that. good luck.

@Susan - yes - I did the same thing .. waited too long and believed ( with scepticism) their stories. I have since learned that regardless of the situation - after 3 days late its time for 3-day notice - I know every one has different situations and if they are willing to pay at least half the rent , then I will work with them till the 15th, but beyond that, I have grown to the point that the eviction process must start early on , otherwise, several months can go by without getting rent. I learned the hard way that being too nice for too long is a losing situation. Rent due on the 1st of the month is no surprise to anyone and if they haven't planned properly and decide to make me responsible for their problems - I cannot shoulder their finances any more than the mortgage company would shoulder my monthly payment.