All Forum Posts by: Simon Wold

Hey All-

Do wholesalers stick strictly to SFRs or do some have small multifamily deals?

Thanks,

Hans

Also, do you have the gut to deal with Hilltop tenants? You will be turning over more tenants in this part of Tacoma than others.

Run the 50% rule... 

How much are you willing to put down? Are you trying to owner occupy? 

I am buying multifamily in Tacoma, but am using the owner occupied 3.5% down loan. At 239,000 this would make my P&I payment around $1,150 a month, while the average rents for a 4 bedroom in the area is $1,300. Using the 50% rule this gives you a cash flow of $150 a month.  Being build in 1910 you are probably going to realize the expenses are going to exceed the 50% rule. Keep this in mind!

On the other hand, you will be lucky getting a positive cash flow using the 50% rule with MLS properties in the area. I would recommend putting effort into off market deals... harder to find but more lucrative.

hope this helps,

Hans

Thanks for the responses! I greatly appreciate it.

Hey All-

Im just starting to run through and analyze deals on the MLS. Entering in all of the pro forma data for every multifamily property would take forever, so I am going to implement the 50% rule in order to weed out the good from the bad. Thoughts on this strategy? Does anyone use another strategy or rule to quickly run through deals?

Also, I am not sure if I am implementing the 50% rule correctly.  Here is a link to one property I looked at: https://www.redfin.com/WA/Tacoma/3276-92nd-St-S-98499/home/2825569

So monthly income is $6,700. This leaves $3,350 / month after half of the income has been spend on expenses. Using the Mortgage Payment Calculator from BP, putting 20% down at a 4% interest rate gives a PITI payment of $3,917.74 / month. The question I have is, does the insurance and property tax get calculated in as part of the 50% expense? If so, I am including these numbers twice...

Best Regards,

Hans Wold

Hey @Billy Lakkham.  Looking for multifamily properties in the Tacoma area.  Let me know if this is something you come across!

Thanks @Alex Chin and @Account Closed!  I'll give Tim Tran a call and start looking into insurance policies! 

Hello All-

I am looking for a RE Lawyer in the Seattle, WA area. Anyone have any recommendations? Specifically, I am looking for a RE lawyer to advise on which type of business structure to set-up for my rentals (LLC / LLP / S-Corp / C-Corp).

Any information is appreciated!

Thanks!

Hans Wold

Hey @Ty Monroe

A book I would recommend is called "Investing ins Duplexes, Triplexes and Quads" by Larry B. Loftis.  It lays out all of the options you will have when investing in a residential building (4 units or less). Also, give the podcast a listen.  You will find a ton of useful information there.

In my area, you can get what is called an owner occupied loan. This loan only requires 3.5% down, but it comes with PMI and the requirement of living in one of the units for a year. However, I was speaking with my lender the other day and he mentioned that you can refinance out of the original loan after 7 months to get rid of the PMI. I would recommend finding a knowledgeable lender that works with investors regularly and set up a meeting with him/her. They can lay out all of your options for you.

Side Note: The FHA owner-occupied loan won't lend if the property isn't in livable condition, which limits you if you are looking for a place that needs an extensive remodel for value add purposes.

Best Regards,

Hans Wold

Hey @Eboni Allen! I did end up finding an agent for my next deal, but I'll PM you so we can stay in touch.  Thanks for the response!

Hans Wold