All Forum Posts by: Jeff Schemmel

Well.  I got back to the September meeting results, and I have to say these notes are a horrible read and it's really hard to follow; I do get the concept of "frameworks" but it feels so scattered when I read it back.  There's quite a bit of fear-mongering in the comments and little to no actual data represented as a backbone to some of these comments from the board members.  I hope we get something a little more concise.  For example, the 3% cap without CPI consideration is noted to be "the most important thing", but I wish there was some basis for understanding why that comment is there.  I'm going to keep reading for now.

@Kali Terry very helpful, thank you!  Do you plan to have it appraised?  What did you end up with for new rent value?  I'm curious if you added metering for gas/electric and if you have a house meter for those in addition, and what that cost?  Did you need to have two entries, and with a 3rd floor did you encounter any issues with egress?

@Kali Terry so you bought at 220k with an FHA loan, ($7,700) down payment + closing costs, and put $4,000 into renovations (finishing a whole attic and permitting a triplex) then sold for $240k? I feel like I'm missing a piece of information. I'm very curious about the triplex conversion, and I'd love to hear about your experience in accomplishing that in more detail. Is it still underway or are you done?

thanks for posting.

-j

Welcome, Tyler!  you're exactly where you should be to learn and meet people who can help you reach your goal.  My wife and I are on our second house hack in Saint Paul, It's been full of good experiences and I'd absolutely recommend it as a great way to get started and gain some well-rounded experience in your first year or two of investing.  Link up with some good lenders who also invest, and some good realtors who also invest and start to build some partnerships to help you get there.  Your network is one of the most important things you could build early.

I just use apartments dot com.  it's been nice and easy and free.  they never plug anything, and I manage all my docs there.  I also use authentisign for electronic signatures on everything.

 I know of two options at 10% down and 15% down that could work for your situation.  they sting a little less than the 25% down non-owner occupant requirement fannie and freddie have on their loans if you can find numbers that work for you.

The 10% "down vacation home" (second home mortgage) is an option.  happy to make some introductions to lenders who have experience with it, as there are some specific requires regarding location and use that matter.

the 15% down nonowner occupant option is with a local lender and is allowed for 1-6 units.  You've gotta hit the criteria I presume, but I've had @Sam German speak with a few of my clients about it.  Just talk to him if it's interesting.

Anyway, happy to help if I can.

@Connor Guinn welcome! I am in the hold camp unless you have a good plan for what to do with the proceeds. if you've lived in it for 2 of the last 5 years you should be able to avoid capital gains on the sale of whatever portion you lived in. You could, with that cash flow, just hire a STR property manager. I'm sure there's a way to make keeping it a desirable option. Hopkins is nuts for rentals.

@John Woodrich once again, thanks for a thorough answer.  always learn so much from you, man.  CD terms are really popular now, sellers tend to prefer those over price drops, and even come on market out of the gate with acceptable CD terms being mentioned.

 Yeah, that makes sense.  It needed about 125k minimum to be rent-ready.  It's also not likely a lender would provide a loan for it.  best done with hard money or cash.  There are also two lots at play with that property.  I house hack in saint paul, hit me up anytime if you'd like to chat.

hey @Megan Blasena!  Welcome :)

First, you're in the right place.  Second, there are a few things you can do now to leverage that anxiety and channel it into productivity.  As an anxious person, myself, hindsight taught me a few of these things.  I will preface this by saying I assumed you had a goal or two in mind heading into this.

1.) connect with local, investment-minded, mortgage lenders.  This is so important, I can't stress it enough.  any old lender doesn't cut it, and you'll want to meet someone who is responsive, has househacked/owns rental property themselves who can demonstrate their understanding and show you the way.  The bottom line is, you have optionS, and you'll want to discuss the obvious and less-obvious creative ways to harness debt to progress forward to your next place.  I know a few I can introduce you to if you'd like..

2.) Agree on your strategy with your partner.  buy-and-hold long term rental, househack and rent your first primary, get a second vacation home with a 10% down program, buy out of state, build a tiny home... It may not be completely clear what makes the most sense for you at this time, but start to develop one or two of these that you see as the best pathway to your goals.

3.) read the market.  connect, browse, analyze, drive, call.  whatever you have to do to know what you get for what price, what rental rates are by the room, unit, 1-month, 3 month, etc.  As you start to narrow your strategy this gets less cumbersome.  There are some excellent resources out there to help you gather data to help you make a decision, but the most important part to do now while you're saving is to practice and learn what the market offers.  This doesn't tell you "where you fit in the market" so much as it tells you how to spot a good deal when you see one!

4.) connect with a local investor-friendly realtor who owns rental property themselves and can demonstrate their knowledge of the market and strategies that set you up to win. They will bring along a multitude of connections and information to set you up best to hit your target.

last, I would just say try to avoid taking "easy-street".  lots of people claim to say they have the quick and easy route to get you what you need fast.  The best thing you can do is arm yourself with the knowledge to spot a deal yourself.  Nowadays, you're much more likely to knock it out of the park focusing on something that has future potential than what looks good on paper as-is.  Very few properties are just immediately cash-flowing to your expectation right out of the gate, and most (especially those newer) make money over several years of ownership and by putting in some early sweat-equity to improve the rate at which appreciation is earned.  There will be up and down years, but you make money while you wait in this business, not when you buy or sell.

Reach out anytime! :) good luck.