All Forum Posts by: Jason Taken

Do you want a  loan quote? 

Hi there,

When you're dealing with a 7-unit multifamily property that has been deconverted into 7 condos, each with its own PIN, the financing options can be a bit tricky. Here’s what you need to know:

- **Conventional Loans**: These are typically used for single-family homes or small multifamily properties (up to 4 units). Since your property has 7 units, it's unlikely you'll qualify for a conventional loan.

- **Commercial Loans**: These are more suitable for larger multifamily properties like yours. Even though each unit has its own PIN, the fact that they are all under a single roof usually means lenders will treat it as a commercial property.

To finance this property, you will most likely need a commercial loan. Commercial loans often have different terms, such as higher down payments and shorter loan periods, compared to conventional loans.

Here are some steps you can take:

- **Consult with a Commercial Lender**: Talk to lenders who specialize in commercial real estate loans. They can give you specific details on what you'll need to qualify.

- **Use BiggerPockets Resources**: Check out the BiggerPockets forums and articles on commercial financing. There are many experienced investors who share their insights and strategies.

- **Run the Numbers**: Use the BiggerPockets calculators to see how different loan options will affect your cash flow and overall investment.

If you have more questions or need further guidance, feel free to ask. Good luck with your investment

Hi there,

Congratulations on starting your real estate investing journey and completing the rehab on your Detroit property It sounds like you've done a lot of work and are now at a critical decision point.

First, let's break down your situation:

- You've already done major rehab and have a tenant in place.

- You analyzed the hold option and know it can cash flow.

- The property is not getting much traction as a turnkey, and your hard money loan is maturing soon.

Here are some key things to consider:

**Refinancing with a DSCR Loan:**

- DSCR (Debt Service Coverage Ratio) loans are great for investors because they focus on the property's cash flow rather than your personal income.

- Make sure the property appraises for the calculated ARV (After Repair Value) to get the best loan terms.

- Consider the loan terms, interest rates, and any prepayment penalties. You can use BiggerPockets' loan calculators to run the numbers. You can also use DSCRANALYZER[dot]com.

**Conventional Loan:**

- Conventional loans might have better interest rates but often require higher credit scores and more personal income verification.

- They might not be as flexible as DSCR loans for investment properties.

**Other Ways to Flip:**

- If you decide not to refinance, you could consider partnering with a local real estate agent who specializes in investment properties to get more exposure.

- You might also look into staging the property or taking high-quality photos to make it more appealing online.

- Another option is to list it on multiple platforms, including local real estate groups and social media.

**Additional Tips:**

- Ensure you have a solid exit strategy, whether you decide to hold or flip. Knowing your next steps can help you make a more informed decision.

- Keep an eye on the local market trends. If the market is slowing down, it might be better to hold and wait for a better time to sell.

It's great that you're thinking ahead and considering all your options. Remember, it's okay to take your time and seek advice from experienced investors.

Feel free to reach out if you need more specific guidance or have further questions. Good luck with your decision

### Understanding REO Properties

First, it's crucial to understand what REO properties are. These are homes that have been foreclosed on and are now owned by the bank. They are often sold at a discount, but they can come with significant repair needs since they are usually sold as-is.

### Due Diligence

Before buying an REO property, conduct thorough due diligence. This includes hiring an inspector to check for structural problems, arranging for a pest inspection, and getting a professional appraisal to ensure the property's value matches the bank's asking price. Also, look out for red flags like neglect, possible liens, and unpermitted renovations.

### Financing

Make sure you have your financial matters in order. You may need to explore different financing options such as short-term fix and flip loans, home equity lines of credit, or even remortgaging another property. Companies like RCN Capital offer specialized financing for fix and flip projects.

### Renovation Planning

Develop a detailed renovation plan to maximize the property's value. Focus on projects that will bring a return on investment, such as updating the kitchen, bathrooms, flooring, and installing new appliances. Ensure you have a clear understanding of the repair costs and any hidden expenses that might arise.

### Market Analysis

Perform a comparative market analysis to understand the local real estate market. This will help you determine the property's fair market value and ensure you're not overpaying. Also, keep an eye on sales activity in the neighborhood, including how long homes are sitting on the market and recent price trends.

### Avoid Common Mistakes

Be cautious of common mistakes like underestimating repair costs, not having a solid exit strategy, and overpaying for the property. Working with a team of professionals, including real estate agents, contractors, and inspectors, can help you avoid these pitfalls.

### Finding the Right Property

Work with a real estate agent who specializes in REO properties to find the right deals. These agents have access to a large inventory of bank-owned properties and can provide valuable insights into the local market.

If you follow these steps, you'll be well on your way to successfully fixing and flipping REO properties. Remember, it's about careful planning, attention to detail, and making informed decisions.

Feel free to reach out if you have more specific questions or need further guidance Good luck with your real estate ventures.

 We deploy capital there often. Give me a call.

Hi there,

It sounds like you're looking for some advice on how to navigate a complex situation with your brother and your wife.

First, let's address the joint account and mortgage issues. In a community property state like Arizona, your wife's involvement can be crucial. Even if you're not on the mortgage, your wife might still be affected because of the community property laws. It's a good idea to consult with a real estate attorney or a financial advisor who is familiar with Arizona laws to understand the full implications.

If you're considering a joint account with your brother, lenders will typically look at both parties' credit and financial situations. Since your brother will be living in and rehabbing the property, his credit and income will be significant factors. However, your credit could also be impacted if you're co-signing or jointly applying for the loan.

Regarding the funds, lenders usually require that the down payment funds be seasoned, meaning they need to be in the account for a certain period, often 2-3 months, to ensure they are not borrowed. As for the gift for the down payment, it's generally allowed, but it must be properly documented as a gift letter to the lender. The amount can vary, but it's typically subject to the lender's guidelines.

Remember, communication is key. Make sure you and your brother are on the same page, and it might be helpful to have an open conversation with your wife about the potential risks and benefits.

Hi Omer,

Welcome to BiggerPockets You're looking for good markets to implement the BRRRR method with an all-in budget of up to $150,000. Here are some key points to consider:

### Market Selection

When searching for markets, focus on areas with:

- **Affordable Properties**: Look for places where you can buy distressed properties at a low price.

- **Appreciation Potential**: Areas with growing populations, new developments, or improving economic conditions are good bets.

- **Rental Demand**: Ensure there is a strong demand for rentals to guarantee steady income.

### Budgeting

Remember the 70% rule: Your total investment (purchase price + rehab costs) should not exceed 70% of the property's After Repair Value (ARV).

### Financing

Consider using hard money loans or fix-and-flip loans for the initial purchase and rehab phase. These loans can provide quick access to funds but often come with higher interest rates.

### Example Markets

Some markets that might fit your criteria include:

- **Midwest and Southeast Regions**: Cities like Indianapolis, Indiana; Columbus, Ohio; or Tampa, Florida, often have affordable properties and growing rental markets.

- **Up-and-Coming Neighborhoods**: Look for neighborhoods that are undergoing revitalization. These areas can offer undervalued properties with potential for significant appreciation.

### Resources

- Use online real estate platforms and local real estate agents to find distressed properties.

- Check out BiggerPockets' resources, such as the BRRRR calculator, to help you estimate costs and potential returns.

### Next Steps

1. **Research**: Start by researching potential markets and their current real estate trends.

2. **Network**: Connect with local real estate investors and agents to get insider tips.

3. **Analyze**: Use tools like the BRRRR calculator to run numbers on potential properties.

If you have any more specific questions or need further guidance, feel free to ask. Good luck with your real estate journey!

Best!

Hi there,

Thanks for sharing your project details. It sounds like you've put a lot of work into this renovation.

First, let's break down your options:

### Selling the Property

- You've estimated a potential profit of $58k, which is a significant return on your investment.

- Selling now would give you immediate cash to reinvest or use for other purposes.

### Renting the Property

- With a projected rent of $1450, you need to calculate the Debt Service Coverage Ratio (DSCR) to ensure it's viable.

- DSCR = Net Operating Income / Annual Debt Service

- If the DSCR is above 1, it's generally a good sign.

- You mentioned you don't need the money right now, so holding onto the property could provide long-term rental income and potential appreciation.

Here’s what you should consider:

- **Financing Costs**: If you decide to rent, ensure you factor in all expenses, including mortgage payments, property taxes, insurance, and maintenance.

- **Market Conditions**: Check the local rental market to see if $1450 is competitive and if there's a high demand for rentals in your area.

- **Long-term Goals**: Think about your long-term investment strategy. If you plan to build a rental portfolio, holding onto this property might be a good start.

To help you decide, here are some steps:

- Use the DSCRANALYZER to determine what the cash flow numbers look like.

- Research the local market to understand rental demand and pricing.

- Consider consulting with a real estate agent or property manager to get a better sense of the rental potential.

If you're not in immediate need of the cash, renting could be a good option, especially if the numbers work out. However, if you're looking for a quick return and have other investment opportunities lined up, selling might be the way to go.

Feel free to reach out if you need more specific guidance or have further questions Good luck with your decision.

Give me a buzz. No upfront payments and begin a beginner is OK.

Hi there,

Considering a duplex as your primary home and renting out the other unit is a great idea, but you need to understand how interest rates work in this scenario.

When you buy a duplex and plan to live in one unit, you can still qualify for a residential mortgage, which typically has better interest rates compared to commercial loans. However, the lender will consider the rental income from the other unit when calculating your debt-to-income ratio.

Here’s what you need to know:

- **Interest Rates**: You might not have to pay higher rates just because it's a duplex. If you're living in one of the units, you can often get a residential loan with competitive interest rates.

- **Financing Options**: Look into FHA loans or conventional loans that allow owner-occupancy. These can offer better terms than commercial loans.

- **Rental Income**: Lenders may use a portion of the rental income to help qualify you for the loan, which can be beneficial.

To get the best deal, make sure to:

- Check your credit score, as it will impact your interest rate.

- Shop around for lenders that specialize in owner-occupied multifamily properties.

- Use tools like the BiggerPockets mortgage calculators to see how different interest rates and loan terms affect your cash flow.

If you have more questions or need further guidance, feel free to ask Good luck with your duplex venture