All Forum Posts by: Isa G.

Hey Charyl, 

I've gone through Jeremy Drobeck at Amerifirst Home Mortgage and he was really helpful at explaining all of the factors that determined my rates. He also invested in REI himself at one point so he understands the mindset/needs of an investor and was patient in explaining loan options such as 203k if you want to finance rehabs as well. He also provided good referrals for insurance brokers and I'm guessing he has lots of other local referrals for contractors, inspectors, etc.

I also heard Arbor Credit Union can do 100% financing for conventional mortgages although I haven't worked with them yet, but worth checking out. 

Hi Chang, 

I've heard Gary Apps is a local real estate lawyer you may want to try. 

Hi Griffen, 

Welcome to BP! I don't own any properties in those neighborhoods but I'm somewhat familiar with them. Both neighborhoods have high student populations as Western Michigan University and Kalamazoo College are right there. So there's good rental potential with likely higher than average maintenance costs. My guess is that Vine is preferable to Stuart from a crime perspective given Stuart is adjacent to the Northside but this may depend on the specific block you're looking at. I definitely think you'll want to at least meet the 1% rule in these neighborhoods given the headaches that may arise with tenant/neighborhood issues, and you might be able to find deals that even surpass the 1% rule if you can find any off-market. 

I'm pretty new to this as well and hoping to grow my local network. I'd love to hop on a call with you sometime to learn more about what you are looking for and to see if I can help!

@Matt Moreland Thanks for the thorough response on this! And agreed, I'd love to hear from these lenders too.  

Just listened to BP REI Podcast 440 and was intrigued by the no-money-down strategy they discussed. Does anyone know of a bank or credit union that gives loans based on the appraised value rather than the purchase price?

Hoping to buy low and use the left over spread to cover the down payment on some buy and holds. 

Thanks,
Isa 

Hi Chang,

I'm following this discussion as well since I'm looking for referrals too.

I've heard other local investors recommend Erin Gallagher at Seber Tans and also Hamacher and Associates. You could also go out of state since many CPAs offer remote services. 

I have a vacant lot zoned residential in Kalamazoo, MI under contract that I’m planning to wholesale. It’s a .22 acre lot in a nice neighborhood (Westwood). The properties around the lot average around $180k.

Around what cash price would developers/investors pay for this? Also, if you know anyone that might be interested DM me and I can share the details.

@Marc Desrosiers

Thank you! I'll keep that in mind for future offers I make.

I found a solid on-market foreclosure wholesaling opportunity in Portage, MI, ran the numbers, and called the listing agent to learn more about the property and potentially submit an offer. My buy price was 140k so I figured my earnest money deposit would need to be around $1k. However, when I said I was prepared to submit an offer at that price, the agent asked if I was prepared to make a 14k EMD. When I asked why this number wasn't around 1k the agent said that standard practice is 10% EMD for all-cash offers.

I've never heard of this practice of requiring 10% EMD on all-cash offers. Is this specific to foreclosures? Is this a tactic sellers/agents use to deter wholesalers?

@J Scott

Thanks for the insight and recommendations! I've enjoyed reading your books on flipping and estimating rehab costs.

For others hoping to learn (and for my own future reference) here are J's six rules for investing knowing that we are currently at or approaching the top of the market cycle: 

1) Be extra sure on the numbers. When at a lower point in the cycle, the numbers don't need to be as precise because there's more potential upside and a longer time to flip may actually lead to a higher sale price due to appreciation. But right now, there should be a smaller margin of error because the market may have a negative impact. So be sure to do due diligence 2-3 times before buying any properties. Get quotes from contractors on rehab costs and work hard to get an accurate ARV estimate.

2) Avoid deals that are going to take more than 3-4 months. During a rising market, it's ok to take on big projects that require more time, but this is risky right now because there's a chance that there will be a downturn while holding properties. 

3) Make sure to have backup exit strategies on every deal. If you can't flip, at least have reasonable backup options including holding it as a rental, doing a lease option, turn it into a commercial space or short term rental (obviously not a great option now because of covid). 

4) Avoid thin deals. Figure out the biggest drop the market could take right now and make sure that's the minimum profit target. I.e. if the market could likely drop 20% in the near future, go into deals with the goal of making 20%. So if worse case fears are realized, you at least break even. 

5) Don't leverage more than necessary. A depreciating market may mean lost money for you AND your lender. Reducing holding costs is especially important during this time because it may take a long time to sell if the market declines. 

6) Stay away from high-end properties/vacation rentals. When the market starts to soften, often those are the properties that slow down first.