All Forum Posts by: Jake Walroth

I've just started doing some Direct Mail and 4 days after sending 100 mailers to a focused area I've already received 5 phone calls, and 5 opportunities to do walk throughs with the owners. Whether a deal happens or not isn't what I'm worried about. My question is, if I continue to use Direct Mail and have a successful response rate, how do I turn those leads I can't procure into sales. I've read the forums on how wholesaling is illegal, but then I just listened to podcast #42 with Mike Nelson, who isn't an agent, isn't double closing, and is still wholesaling in Ohio-- granted that pod is from 2013, but I guess my question, is there anyway to attempt to wholesale whatever overflow I have from my Direct Mail campaign in Ohio? 

Cheers

@Ory Kelley I'm also an "investor" in Cincinnati.... wouldn't consider myself an expert, I bought a duplex near UC in Jan(my unit $850/month(i live there at the moment), 4-2 on 2nd & 3rd Floor $1750/month). I was under the impression it was a year before being able to refi and do another FHA. However, I spoke to my lender today because I'm looking at some other properties and I found one through direct mail in clifton out of my price range. However, he said I can refi into conventional at 6 months, and then use the FHA again. I questioned him on this, and he said he's done this 6 times himself...so this is all news to me, and I'm pretty psyched, because this means if I can wait 3 months to refi, the 3.5% aspect would put this property in my price range. Now, my dad will have to cosign, because they can't use my rental income on my current property until it's been filed on my taxes, but with my dad as a cosigner, I essentially just need to have the credit score, which is 750... so I should be able to househack and have another FHA at about the 7-8 month mark. He even said he'll write the owner a pre-approval letter for me right now.... Again, I'm not an expert, I've done a fair bit of research, my lender is the first person I've heard say this. But, this mortgage company is quite reputable in Cincy. @Ory Kelley if you want any more specifics on the lender PM me. 

@Conor Aylward FHA will allow for a cosigner, if you read my above scenario, my lender told me with me if I wanted my dad could even pay the DP, be considered for the 6 months reserves req, and the reason I'll need him as a cosigner is for the DTI aspect. Until my rental income is filed in my taxes, they won't count it as income, so my dad will offset their DTI requirement, essentially all your daughter would need is to have the requisite credit score.

Jake 

Are you a licensed agent? Wholesaling in Ohio without a real estate license is pretty dicey.... there's quite a few posts about it. If you are an agent, as far as I know you're ok, if not you're going to want to make sure you do double closes... contract assignment has been targeted and people are getting fines. 

Jake 

Was wondering if anyone here in the Cincinnati area has a good feel for the rental market for SFH's in Norwood(CINCY). I've got a 3 bed 1 bath(adding another 1/2 on first floor) no driveway(ample room for one) that's been remodeled(with some poor craftsmanship that will have be fixed). It's right near Tower Park and Norwood Elementary. I haven't been able to find any comps for rent, the nice part is, this house also works for a flip.... so I'm not to worried if I struggle to find returns renting it. (ARV with added bathroom and other cosmetics fixes is $50k(minus holding/closing costs etc) more than the purchase price, so I like the flexibility it has, but my goal is a long term hold so hopefully I can gain some insight as to what type of rents I could get... and maybe whether others would sell. That area seems to be gaining lots of steam.. lots of fixed up homes and I'd like to get in on some of that appreciation... so please someone just tell me the smart thing to do is rent it out!

I've house hacked a duplex, used the 3.5% down on a $176,500(appraised for $185k).  

My Mortgage $1305/month

2nd Unit rents for $1200/month(however, tenants have only been in place for a month)

Income- $78k 

765 credit score

$500/month Car Payment- yes I know, get rid of it, but it's paid through a car allowance at work and will be paid off in a year and half

$480/month school loans

No credit card debt

$20k in reserves

1. I know that's not a ton of info, but am I in a good position to purchase another rental property?(want 2-4 unit with value add opportunity- financed through hard money or some Credit Unions/lenders that can wrap Reno into loan)

2. My DTI is right on the 49% mark I believe with the last lender I spoke with.... however, very few lenders will count my tenants $1200/month towards my income- which is severely inhibiting my borrowing power-- are lenders that will consider this income that hard to find?

3. Any suggestions on how I should best go about financing my next property based on the info above?

Any advice, critiques, etc is much appreciated. 

Jake 

Hey BP, 

I've got a few questions regarding Mailer Campaigns as well as Wholesaling? My primary motive is to find investment(buy and hold) properties for myself to fix/ rent out/ the whole BRRR thing. However, the idea of wholesaling good deals I can't close on seems enticing.

So a lot of people say get a list together and mail a bunch of identical/generic type mailers. However, one of the BP podcasts, I can't remember which, had a fella who really did concentrated mailers, writing personal letters to a concentrated group of owners that fit his specific criteria. I found this to be much more appealing than sending a 1000 letters out. The idea of sending 50-100/month personalized to a concentrated group seems like a better route for me because 

1. I guarantee it will be on a street, in a neighborhood, in an area I would like to invest in/be in the path of progress. 

2. The more personal, IMO, the more likely you will be to entice a response, good or bad. 

3. I can do these myself, doing 50-100/month is something I can do while watching the Redlegs' road to the World Series... lol... I can dream. 

My plan was to physically "drive for dollars" and literally create letters for 50 or so houses that look vacant/run down/not occupied and place personal letters in mailbox? Is this illegal? Just don't know why people have to use companies to do this and I can't physically do myself if in a small concentrated area.  Then use a mailing list to supplement these. 

My next question, how do I have a contract written up that lends itself to wholesaling.... something to the effect that I'll offer X pending inspection.... because I believe this is an easy out if I can't find a buyer.. no? 

Any help is much appreciated. 

Jake 

I guess in the two instances I laid out, not sure what a lender's opinion would matter. I mean if you qualify for the loan, they don't really care how you'd fund your remodel.... and if a property costs less than $25k, there is no lender. 

1. It doesn't have to be used on down payment, can be used on rehab costs. 

2. If a house costs 20k..... what prohibits me from using that 25k to fund the down payment?

- sure it's going to hurt my DTI.... but other than that I don't see any issue with it.... 25k at 8.98% interest is better than any hard money loan I'd get.

If any of you wholesalers have some in the pipeline that are in or around Northside, Clifton, Corryville, Walnut Hills, Norwood, URBAN CORE- send me a message. 

Jake

Welcome @Kendra B. to BP..... I've grown up in Cincinnati.....I just bought my first Rental/House hack in Corryville near UC and the hospitals..... I paid a little $175k for the location, but my mortgage is $1300(FHA 5% down- and I used a Cincinnati Port Authority Grant that paid all of my downpayment, all I needed was closing costs $3800- requires credit score of 680+ i believe and there are income barriers, but if you fit into that criteria, check it out-I used NRL Lending) and the 2nd Unit(4-2) rents for $1500, and my unit rents for $800 when I find my next house hack... so there are deals to be had. The best part about cincy is you have so many different areas that lend themselves to different strategies. You can get great cashflow properties in areas like Price Hill, Cheviot, Westwood-I grew up on the westside, there are still many pockets of good neighborhoods. You could also spend some more in a place like Oakley, Walnut Hills, Norwood.... and be pretty sure your appreciation will be great. I'm choosing the Clifton/Corryville market because of the giant tenant pool and higher rents.... and hopes of appreciation-- afterall UC is growing year over year at about 7-10%... So I've got some med school tenants that will rent from me in May. Don't forget about places like Covington, Newport, Bellevue KY...... Best of luck and if you have any questions please ASK. 

Cheers

Jake