All Forum Posts by: Holden Latimer

@Brandon Turner

Thanks Brandon! Feels good to have a mention notification from a BP Legend!

In your experience, are there many conventional lenders who will value 2-4 unit properties on an income approach rather than a sales comps approach?

@Joseph Shevy

I had a similar thought process as you when we got into our 4-plex about 7 months ago. After moving into the property we made significant improvements, raised rents by about 20% and planned on trying to refinance into a conventional loan in order to eliminate PMI. Also hoped to be able to rinse and repeat with the FHA house hack. Unfortunately as others have said this is more easily said than done.

Property Valuation: In my mind I figured using an income approach of valuing our property (post renovations) was appropriate... I was wrong. My intuition had me valuing the property as follows - Post Renovation NOI / Market Cap Rate (used our purchase cap rate) = Estimated Post-Renovation Value. Using this method would have put us right at 80% LTV. Unfortunately most lenders will only value smaller multi-unit properties based on sales comparables rather than on an income approach. Your market may be robust but, because there is low trading volume in my area and we are now at the higher end of rents within that area, there is no way we would have gotten the appraisal back where we needed.

Despite not being able to refinance into a conventional loan, we were however able to take advantage of the FHA streamline program that will cut out PMI almost in half and lock us in at an even more attractive interest rate. Rates have moved quite a bit in the last couple weeks so I am glad we locked when we did. When we do have 20% equity in the property (according to the lenders) I doubt we will be in an interest rate that will be worth refinancing. Just have to save up for the next property based on conventional loan standards.

Best of luck and hopefully you are able to swing this strategy for your next property!

@John A.

Great advice. I thought the same thing. "Winterizing" should be something I can do myself, but I will most likely continue to have the experts take care of the start-ups and repairs.

@John A.

Thank you for the response. I figured it may be a bigger job than I wanted to take on and was absolutely right. Had the HVAC guy over here yesterday and several parts needed to be replaced on just about all the coolers. He was here for over 5 hours which means this would have taken me well over a days work. Unfortunately the final bill was also well over double what I had expected, but hopefully with regular maintenance we won't have similar issues in the future. 

@Jeffrey S. Breglio

Sounds like it would be a very helpful educational opportunity. I would definitely be interested in attending in person if possible, but distribution through the BP forum would be awesome. 

I would be most interested in learning about self-directed IRAs. Thanks for putting this on!

Sorry about the multiple posts. BP was struggling to send the post through and apparently I now have posted this thread 5 times. Hopefully replies will now only go through this forum thread.

Its time to start up the swamp coolers for the 4-plex I acquired last November. We had a couple breaks in the copper line during the winter that we need to fix. 

I was thinking of using a product like FiberFix, but figured I would just call my HVAC guy to fix the leaks and check on the units since this will be the first turn-on since we acquired the property about 6 months ago. 

He quoted me about $100 to repair the leaks and $75/unit for a start-up/tune-up. This seems like maybe a cheap do-it-yourself project, but wanted to get advice from the BP forum. Should I watch a couple YouTube videos and do it myself or is it worth the expense for a professional to do the tune-up?

P.S. I was told that three of the units were replaced last season and do look in good shape. One unit looks quite old.

Any responses will be greatly appreciated. Thanks! 

I will be following this topic as well. Jeffery Breglio may be someone to get involved with this thread. I don't know how to @jefferybreglio someone not in this forum discussion.

I listen to BP (of coarse)  and Creating Wealth with Jason Hartman. If you look at @Account Closed

@Tayvon Jackson

To my understanding, generally FHA will not issue more than one mortgage to any one borrower. If you are married and both spouses could qualify separately you may be able to do two FHA loans at once. Otherwise in most cases you can only carry one FHA loan at a time. With enough equity however, you can refinance into a conventional loan and potentially qualify again for another FHA loan and only works if you plan on house hacking.

I would recommend getting the first FHA deal out of the way and looking at your options after that. Second time around conventional may be your best course of action anyway. Best of luck!

http://portalapps.hud.gov/FHAFAQ/controllerServlet...