All Forum Posts by: Jared McCool

@Douglas Snook this happened today.  This is my first deal, for a buy and hold small multifamily property. The point of the post was to share with other new investors and experience, and my mindset to overcome that experience.  Thanks for the input.  

@Douglas Snook - I was overwhelmed with the numbers.  It was not as simple as a monthly mortgage payment that was less then my projected expenses, a down payment, and an estimated closing cost. It was a panic attack.  However, after reevaluating,  to the experienced eye, in fact, they are just simple numbers.  Just the first time I saw them, I wasn't as prepared as I thought I was.  

This was the one deal that i decided to write about, don't most contributors pick a deal as the basis of their topics?

Hi all,

I thought I would share on this experience. 

Step 1 - Educate myself - I have been an avid BPer educating myself for months. Podcast, reading and contributing to forums, questions, more books, upgrade to PRO, online seminars with @Brandon Turner, build connections, relationships, teams, setting buying parameters, creating goals, long term and short term, and a strategy to reach those goals.  Once I got a firm understanding of real estate (enough to be dangerous, but always continuing to learn) I went on to 

Step 2 - Preparing my finances. I was told by my loan officer that I was in great shape (years in front of my age) and will have no issues in any direction I go.  Pre approval on demand! On to 

Step 3 - Shopping for a deal - With my team in place my realtor helped me find deals.  After my 5 minute property analysis with meeting the 1% and 2% rules, onto deeper analysis with the BP rental analysis tool.  The numbers make sense! Research the market and comps.  Everything is aligning and making sense, lets see the property!  On to the walk thru.  Re-adjust the numbers to reflect findings, still makes sense, got my offer price in mind!

Step 4 - The Offer - I go to my loan officer with my offer, and he runs the numbers to show me what it looks like and sends the pre approval letter!

WAKE UP CALL! - Hard right hook to the jaw, and Jared goes down for a count. 6 seconds later with wobbling knees, I make it make to my feet! MAKE APPT WITH LOAN OFFICER TO UNDERSTAND WHAT I AM LOOKING AT!

In the 2 hour conversation I had with my loan officer, I felt like all the research I had been doing for months meant nothing!  I felt like I had learned nothing!  I left the office feeling hopeless, beaten, and unready to move forward in real estate.

THAT WAS 2 HOURS AGO.  Now  I am back on BP, sharing my story... WHY?  Because I just learned a hard lesson that now has MOTIVATED me even more.  I can't imagine how many people get to this exact same point, that have gone through the exact same steps I wrote above, got to this point and QUIT!  Not even a farewell speech on BP.  Just back to there jobs and daily lottery tickets preying for early retirement at the age of 65! (yes 65 will be considered early retirement when my generation gets there)  THIS IS NOT A FAREWELL SPEECH.  

This is a hard lesson that didn't cost me a penny, and in return I felt obligated to share it with my peers.  In the past 2 hours before writing this post, I have adjusted my goals, redesigned my strategy to reach those goals, called my Realtor and put that new strategy into action!  I will not QUIT because of some yellow/orange tape!  If it was easy, than everyone would be doing it!

Joanna N. Gromotskie

WILLIAM RAVEIS REAL ESTATE
2 Huntington Street

Huntington, CT 06484
Shelton, CT 06484

I can't post contact information in this fourm, so feel free to private message me, or you can google her.

This is my real estate agent.  Does amazing work around the clock for me, and understands the investor mindset. She also helped build my team with my mortgage broker and lawyer. It took me a while to find her as I was building my team, but glad I did. She is hungry, aggressive, experienced, and goes to bat for me. Of course I would love to keep her to myself, but the way this business works is by networking and bringing value to others. She bring tremendous value to my business, and and in return I am happy to bring her more clients / investors she can bring value to as well. Win, win, win.

@Ryan Keenan, I know I am just a little late on this post, but the VA is approving a loan for a property that needs 20k in repairs? To my knowledge VA was a whole lot more strict than FHA, and would deny a loan for a missing nail in a perimeter fence.

How did this deal turn out?

I am beginning to do walk throughs on small multifamily (2-4 unit) properties that I have done analysis and pro forma due diligence on. If the numbers make sense, I am doing a walk thru with my contractor. My contractor does ask a lot of good questions, however, I am wondering what other Buy and Hold investors look for and questions you may ask while doing a walk through? I am buying through FHA owner occupied route, so most properties are in near turn key conditions that I am looking at. What questions should I be asking? What red flags should I be looking for? I want to make sure I am confident to move to the next step of making an offer, and confident that it will pass FHA inspections.

Hi all,

Thanks for the input.  Im glad to see that this was a useful topic for others besides myself. 

 @Brie Schmidt I like the idea of contesting the assessments with lawyers.  Is this a lawyer specific to tax law?  Are the cost associated with paying the lawyer to appeal the assessment worth it?  Have they ever not been able to lower the assessment when contesting it?

Hey all,

This is my first discussion on BP. I have been a follower of the fourms for months, and finally found a topic that seems to not have any coverage.  It almost scares me, that the answer is so obvious that no one bothered to start a discussion, but I figured I would bite the bullet anyway.

Assessed Value of a property for property taxes, should this have any indication of the sales price of that property?  For example, a turn key property that is move in ready, priced reduced from 205,000 to 194,000.  All the close to comps for this property sold for 210,000 to 245,000 within the last 6 months.  I will cash flow will cash flow and be happy with an offer accepted around 164,000.  However, the assessed value of this property is for 135,000.  I don't know when the property was last assessed, should be within 2-3 years ago.  Should I be worried?  Should I shoot to have my offer match or below the assessed price?  I know I am cash flowing already with an offer of 164,000, but do I have ground to stand on if I bring up this point, or just look like an idiot?  Save me from making a mistake either way. INPUT? 

Hi all,

New investor, looking to pull the trigger on my first owner occupied property.  After reading this post, I had two questions that I want to add for input.  

Regardless of purchase price, what is an appropriate or average down payment amount? Does this depend on the cash flow goal that you expect to receive from this property? For example if I'm using an FHA loan with 3.5% down required, and with the properties that I am looking at, I have a hard time creating cash flow at all especially since I will be owner occupied for at least a year. If I was to put more cash down, then cash flow will be possible. Of course a lower purchase cost would negate the need for a high down payment, but with FHA requirements on property conditions, this is tough.

My second question would be, even in a situation of an owner occupied property, if the numbers after I moved out in a year (FHA requirements) proved to cash flow, would it still be okay to break even or have negative cash flow for that year?

Thanks for the input!

@David Dachtera

That is great information.  Thank you for taking the time to revive this discussion.  I will follow up on the above.