All Forum Posts by: Jordan Callaway

@Cody L. That’s good to hear. Agree, this way you know the deal has been somewhat vetted. If the listing agent’s quote is substantially higher than what a different lender you work with will give, at least there is some underwriting to give to your go-to lender to make it smoother. Some firms’ internal lending capabilities though are providing unbeatable financing! If it’s just a realtor also brokering a loan, rates may end up being higher than what you could get yourself

@Eliel O Martinez-Cano keep reaching out to lenders. Also if local lenders (local to the property) know the area they can look it over and some will make exceptions or adjustments... for instance if you open a bank account there and deposit $x,000 to show good faith they may work with you on construction financing and/or interest only while doing work for 3-6 months etc. or you can ask for a higher interest rate from them in exchange for allowing you to have an amount built into the loan for rehab. also hard money lenders love this type of thing but can carry high int rates. Also consider when you renovate your initial returns in early years are lower bc of up front reno then improve after two to three years depending on what you inject as capital improvements. At that time you can consider refinancing for lower interest rate or cash out refi

@Jeff S. Totally agree! Stay debt free!!! Haha I know you can potentially grow by refi repeat but she is starting with no debt! She crushes it!

@Jace Holt you nailed it on the head. In residential brokers want buyers to have separate agents.

It’s tough bc if you bring in another broker on larger multifamily, the guys who list everything just stop wanting to bring you off market deals or even see to it that you get the deal bc outside brokers who are incompetent bring unknown risk into a listing agent’s process for their seller. So a good work around is if you REALLY like an agent and want them to represent you but you don’t want to stop getting deals you can build in a finders fee for your Buyside broker to be paid at closing out of your side of the deal (not seller’s side like a broker co op). This way, you still see deals, but you have someone giving you white glove service and do all your misc real estate things.

Or, if you like certain listing agents just work with them direct and on other deals you don’t like the listing agent bring another agent in and pay him yourself 1% (just factor into your offer price) to do everything for you. It also depends on who finds who. If a listing agent calls you, he implies he wants to rep you. If you have a broker looking and finds another broker’s listing from an advertisement, that’s different, of course. Then the listing agent will probably cooperate on and pay him out of seller proceeds.

If a broker brings YOU a deal and you say “I have an agent who handles everything for me, please pay him half.” You run the risk of the broker moving you down on his buyer list and even potentially not wanting to work with you again, like I said this is different from residential

@Sara Roane also just re-read your post and you don’t want house hack pls forgive me, ha!

@Sara Roane congrats and nice work! Definitely should consider house hacking a 4 flat living in for 1-2 years then move out and rent 4th unit

I also like the live in flip idea, find a place you can live in but update over 2 year period then sell as this income is tax free upon sale up to $500k profit for couple $250k for single but now you’re married

HUGE fan of both strategies by I’m doing second myself and just finished rehab and rinse repeat every 2 yrs

Also I believe @Mindy Jensen has done this as well in the past

Also keep doing what you’re doing never stop! GL reach out if y’all have any questions ever

@Eliel Martinez what kind of property and what kind of loan?

Lenders may have this restriction if they think you’re living in it but will be renting, This may be against the lender’s bylaws

Consider house hacking, live-in flip, and BRRRR strategies (search here for all posts on each of u need); or putting 20% - 25% as down payment...

other option (try this first!), is talk to more lenders until you find one who will work with you and/or consider building in a construction component, Bigger pockets has great people. There is a lender for every deal out there.

Other option could be see where rents could go in theory after Renovation so if the all in cost makes it a much better than a 1% deal once it’s stabilized it may make sense.

Otherwise just keep looking. Because this is good it can take hundreds of deals to find one that works well! Keep grinding though!

@Bonnie Donahue

My opinion {which is in no way advice bc not CPA consult yours, But make sure they're familiar with RE investing tax laws not just CPA without that specialty} is single LLC separate new for each property. If possible have president of LLC be a trust no one can crack

C Corp may not allow cross asset accounting and could hurt and series could be dangerous...

When/if **** hits the fan the banks & potential lawsuits could/have/will expose properties connected in series LLC even though they're not supposed to be separated, or multiple properties inside of 1 LLC is more risky.

All just my opinion

With that said, fees do come into play based on costs per state. For instance it wouldn't make sense to have separate LLC for 5 $100,000 homes if setup cost and annual fees are $1,000 per building... In states with high fee it may make more sense to have a few properties in 1 LLC

@Ian Goodstein actually Ian, your gut may be right but CAP rate IS able to be manipulated. Yes it's true the formula is the same but, Why? Because a broker/seller will factor in their own version of expenses compared to what YOU believe are the true expenses. HARD costs like water electric gas trash taxes are what they are, the SOFT costs are oftentimes manipulated to favor seller. Buyer beware. Trust your underwriting not the marketing book because they may only factor in "annual operating" expenses and oftentimes don't include misc. costs, reserves, management, maintenance, turnover, leasing... shouldn't include cap-ex but you should take into consideration required improvements that are non-recurring and address up front IMO. What is equally important to look at is: monthly cash flow, cash on cash return with your underwriting, but my favorites are: price per SF, and most important: GRM of similar properties in similar condition with similar rents. This can't be manipulated as much because it only looks at gross rents and compares to price. Message me if you need clarification happy to help you in anyway

@Greg M. Hundred percent agree