All Forum Posts by: Jared Stroebele

I have a duplex and both sides need new carpet and pad. Stairs, two bedrooms, and a short hallway on both sides. Has anyone had a positive experience with a company they would recommend?

I will refer you to this article https://www.magnifymoney.com/blog/mortgage/iowa-first-time-homebuyer-programs/ it contains a few programs as well as good requirement details.  I would check carefully if any of these apply to multifamily properties.  The First Home program for example only allows single family homes.

Anecdotally, I got into my first house hack (a duplex) with a 5% down payment. I received a conventional mortgage at 15% down and a piggyback HELOC to make up the missing 10% of my down payment. I got this by shopping around. I prequalified with a giant mortgage broker* to get into properties. I told them I was interested in buying a duplex to owner occupy. Once I had the property under contract, I very quickly reached out to a number of credit unions and local banks I had identified previously, to find my best deal. I ended up with two credit unions* offering loans that were much better terms for my situation than the lender I prequalified with.

Take away: 

Just get qualified for an FHA with one of the big guys to start seeing property. Know you have a backstop of an acceptable FHA loan. With an actual property identified it is easier to talk to a broker, "I want to buy 123 Main Street" vs. "I want to house hack a multifamily investment property". That is when you can go looking for best terms at the local banks.

*New American Funding, I did not end up using them but they were entirely electronic and I would recommend them even though they weren't able to give me the best deal of my situation.  PM me if you are interest and I can give you contact information of the broker I used.

**The lender I ended up using was Green State Credit Union (formerly University of Iowa Credit Union).  PM me if you are interested and I can give you contact information of the broker I used.

Welcome to Bigger Pockets.  In Des Moines I attend DSM Real Estate Meetup.  It is an in person meetup that has gone virtual due to social distancing.  It is run by Mitch Coluzzi and Darson Grantham both of them are generous with their knowledge and would be great connections. 

I use Mike Ward at Green State Credit Union.  I talked to him about a refi of my primary resident recently.  They are inundated with request so lending has slowed to a crawl but they are still lending on primaries.  You should reach out and see if they are doing investment refi right now. 

Hi Bryan, Welcome to the investment community in Des Moines.  I just recently pulled the trigger starting my investment journey, it is a very exciting time. Feel free to reach out if you ever want to talk shop.

When I run my house hack numbers I usually run two sets of numbers.

First I run complete numbers renting out all units with property management (BP calculator is good for this).  This will tell me if it will be a good investment when I move out. 

Second I run numbers assuming I am living in one of the units and managing the property and doing most of the upkeep work myself. Basically I want to know much money am I losing every month. Nothing too much more complicated than Rental Income - ( PITI + Capex + Vacancy) if I am making money or losing less than I would be while renting this looks pretty good.

These numbers work for my goals. I want to live there for a year repair/stabilize the property and save money then fill my unit and pass it off to a property management company.  Use the money I saved to move into another property.  I don't mind the snow remove, lawn mowing, painting, and minor repairs.  "Entrepreneurship is living a few years of your life like most people won’t, so that you can spend the rest of your life like most people can’t."

@Cherian Koshy

I suspected the building cost might be inflated right now.  There is a lot of building going on in the cities surrounding Des Moines and that drives up prices.  I do like the location and believe that the area will hold value and am glad to hear others share that opinion. 

I think this is going to be a question of return and to know return I need accurate numbers. So my plan of attack:

1.  Get my realtor to pull sale information of the neighborhoods surrounding, find days on market and comps.  
2. Get the Developer to give me the plans and price of building the existing units.  
3. Get a second and third opinion/estimate on the building cost.   
4. Project rental figures on the condos. (craigslist, rentometer, zillow)
5. Figure out cost of money, and loan options. (local bank and credit unions)

Any other steps to get my numbers nailed down or anything I might be forgetting? If number look good I will need to find a real estate attorney and then that starts a new process.

@Shawn Devoid

Thank you for the reply.  Some of my first questions are definitely going to be about the developer and builder.  Why the project was only partially complete and questions about existing plans top my list. I like the idea of asking how much the other units cost.  I also think I will try to speak with some of the neighbors make sure the builder put up a solid home and learn what I can from them.  

Condo development and regulations in Iowa and West Des Moines will be thoroughly Googled before the end of the day.  I am guessing the city zoning website will be read though as well. 

I do not know if this is a route I will end up taking  but these properties appear too small for most people/companies with the necessary experience to be interested, and too big/daunting for newbies to want to tackle.  If I am right this might be a nice niche where I can take advantage of the lack of competition.  If nothing else I will learn something new in the process.  

Does anyone in the DesMoines, IA  area have experience building investment condos? or building in general?

There are two properties that caught my eye 5590-S-Prairie-View-Dr and 5570-S-Prairie-View-Dr. I am searching for an investment property in the area (live-in if it makes a difference).  I have been looking at properties and have done research into house hacking, flips, buy-and-hold and the BRRRR combination but I have not put any attention into building.  So I guess I was hoping to be pointed to some resources and have a few questions answered.

My thoughts on a simple strategy:

The four unit seems like it would make a good investment.  If I build four units, as condos, depending on how I finance it I would sell 1 or 2 units, keep 1 to live in, and rent the other.

The two unit seems less attractive from an investment standpoint because I would want to keep both live in one and rent the other and lose the flexibility of selling units. 

What due diligence is requires when building new? (What questions should I be asking?)

How much does it cost to build a house? is there a rule of thumb for estimating to give me a quick feasibility? (Maybe an X$/sqft for Des Moines) 

How/where do I start to get actual cost estimates? (Call contractors same as rehabs? Will I need an architect to do drawings? How do I find a contractor with in house architect? is that recommended? )

What are the steps in building a property particularly condos if there are any differences? 

Where can I get financing for a project like this? (Banks, Credit Union, private money (syndication, partnerships),  specific recommendations)

Is anyone doing something similar that I could help with or shadow? 

Is there a specific book recommendation that would help bridge my knowledge gap? 

Sorry about all the questions, and thanks for taking the time to help answer them,

Jared Stroebele