All Forum Posts by: Doug McLeod

This might be a long shot, but I've seen the Century 21 office in Cypress TX advertising properties with 203k possibilities on their digital sign occasionally.  If nobody else answers, Google that office to get a phone number and see if someone there knows the ropes and can give any advice.  It's not your area (Cypress in outside Houston), but they might be able to describe how to find a consultant, etc. and explain what's typical for fees, etc.

If it is a place where you want to live and it is more affordable than other options, go for it.  Condos can be hard to sell, but you may be able to rent it if you move out someday.  If you were just looking for an investment, I'd say stay away from condos generally, but if you need a place to live, can't afford a house in the area you want, and can live in the condo and build a little equity vs. renting an apartment, that works.  Or at least it sounds good, but I've never owned a condo.

Would be interested to hear from condo owners who later kept as rental or tried to sell.

Love it. What area of Houston do you think you'll focus on for your clients?

Hi Kathy-

If you just want listings, go to Loopnet or another commercial listing service.  The best deals are not on there or any other list.  You need to network with brokers or work with people on the ground who have access to the players.  Or you need to contact owners directly.

Are you looking to own yourself? Syndicate?  Invest passively?  Are you talking about small multi (2-4 unit) or apartments?

Typically same or more for investment property. You can get 80% loan to value (LTV) for purchases up to 4 financed properties (20% down) and up to 75% LTV for properties 5-10 (25% down). That's for conforming Fannie/Freddie loans, which gives you the lowest rates (and fixed rate periods) and longest amortizations.

Welcome to the US and to BP!

Save your money and take a little time to establish your credit.  Do you have a SS# or tax ID? Start banking.  Get a credit card and put your groceries, gas, utilities, etc. on it and pay if off in full every month.  Do that for 6 months and then get another one.  In a year you will have both job history and decent credit and it will be well worth it when you start trying to get mortgages.  It may be slow the first year or two, but having good credit will allow to move much faster and more confidently. 

Sounds like it could be a great rental.  If you are managing it yourself and you do a nice job on the rehab such that you expect little maintenance and capex, you should do well.  Even if those expenses materialize per your numbers you will do well because of having so little cash in the deal.  Rent/value ratio is questionable (1100/136000 = .8%) but your rent/all-in-cost ratio is >1.2% which should cash flow well because you're buying it well. 

How old is the house and how well do properties rent and stay rented in that neighborhood?  If it looks like the management will not be difficult and the vacancy will be as low as you've planned for - it looks like a keeper.  

Congratulations (now make sure you screen your tenants and manage it like a boss)!

For conforming Fannie/Freddie backed mortgages, investors generally will pay about 1% more than they would for their residence.  So 5.2% in your example.

Again, for conforming Fannie/Freddie mortgages on Singe Family 1 unit properties, you can typically get 80% LTV (so 20% down) to purchase on your first 3 rental properties (assuming you already own a primary residence - otherwise this applies to first 4). Fannie Mae actually allows 85% LTV up to your 4th mortgage on investment property (purchase loans), but I haven't seen any conventional lenders that go above 80%. After that it's generally 75% (so 25% down).

Most commercial loans also require 20-25% down on investment property.

Private lenders, owner financing, etc. can be all over the place, but are generally close to the 75/25. 

Here are Fannie Mae guidelines that apply on first 4 properties:

https://www.fanniemae.com/content/eligibility_info...

Here is the Fannie Mae guide for properties 5-10:

https://www.fanniemae.com/content/guide/selling/b2...

I'm not there yet, but working on it.  My mentors suggest you want to have about $100k to get started as a solo owner in the my MSA.  Might be less in the midwest.  

All the options you mention are potentially viable.  You could also do some flips using hard money and cash partners to generate some additional capital.

I'm buying SFRs to generate cash flow and capture equity that will allow me in a couple years to have the capital to jump into MF if I cash out a property or two.

It depends on the lender. I can understand if you don't know the buyer and their lending situation, it is hard for you to vouch for their ability to close. If you got to know some hard money lenders and how they work, you could get comfortable with a quick close if they already had worked with a buyer before - even if you don't know the buyer. 

Typically a buyer using hard money has already been pre-approved and only needs to show the numbers to the lender to make it happen. Some lenders will want to get an appraisal, but they can still close in 10-20 days. I've closed in as few as 5 days. 

Might be hard to convince this seller, but keep this in mind for the next time. If you have direct experience with such buyers and lenders, you will be able to expose your must-sell now  sellers to a larger buying pool.