All Forum Posts by: Chris Dawson

@John Ross Valderama, just curious why you are wanting to do a 203k loan.  As a real estate broker, I would only recommend a 203k loan to my clients if they didn't have enough cash to make the repairs.  Otherwise, you would be much better getting a conventional loan, paying for the repairs out of pocket, and then refinancing and pulling out your cash.  

Have you looked at a non government construction loan?  You wouldn't have to be an owner occupant with this type of loan.  I've had very good success with these types of loans.

If you do decide to stick with the 203k, make sure you use an experienced 203k lender and experienced 203k contractor.  I'm assuming your market is a seller's market.  You will probably have to offer a little more to win the deal because of the extended closing times (60 plus days vs the standard 30-45 days).

@Matt Hendrickson what you are wanting to do is exactly what I did 15 years ago.  I kept my full time job for the first 5 years.  I really had no intentions of selling real estate full time.  I got my license because I was buying investment properties for myself and my friends.  When the recession hit, and my IT job disappeared, I got my broker's license, jumped in full time, and haven't looked back since.  I am very thankful that I had my license and had several years of "practicing" part time before I had to go full time.

@Harrison Blaufuss, here are my suggestions:

1 Do online research on the city.  city-data.com is a good place to start.  Obviously search on BP.

2 Reach out to local experts to build your local team.  You'll need a real estate agent, a GC, and a PM, at a minimum.  You can find these on BP.

3 Plan a trip to the city to meet your potential team and to drive around and get a feel for the areas.

4 Join a local REI group and try to attend one of their events while you are in town.

Hope this helps.

@Account Closed I was born in Springfield and I still spend a lot of time down there.  I would have to agree with Lee Ripma on this one.  You can do very well investing in either city.  Heck, you can live in one city and invest in the other!  

What are your primary investing goals? Are you interested in strictly multi family? How about vacation properties? Table Rock Lake is only 30 minutes from Springfield and it opens up an entirely different type of REI that you won't find in KC. Are you buying long term or flipping? What price ranges are you wanting to target? Kansas City has a larger middle class percentage than Springfield. Kansas City is more urban and Springfield is more rural. Springfield is in the "Bible Belt". Kansas City is not.

All of these things you need to consider when you are not only choosing were to invest but also where you want to live.  In the end, you can be successful in either city; it all depends on what you want to do!

@Jennifer Doyle $30k-$40k is way too high!  As others have stated, you just need to replace the water lines with PEX.  You don't have to replace the drain lines.  If you are talking strictly just the plumbing costs (no sheet rock, mold, or flooring costs), then you should easily be able to do this for under $5k.  

@Grant Stucki the answer to your question depends entirely on your personal investing goals.  Stating that you want to purchase 25 units in 5 years is a worthy goal, but we need more details.  What is more important to you; cash flow or appreciation?  If cash flow is most important to you, than you need to look outside of Denver.  If appreciation is more important, than you can do just fine in Denver.  

How much money do you plan on investing?  If you want 25, $100k houses, then you will have to look to the Midwest for those kinds of prices.  If you want 25, $500k houses, then staying in Denver might be your best bet.

Are you looking at multifamily or SFRs?  If you are looking at multi family, you can find 25 unit apartments for less than $1m in the Midwest but you probably won't find a 25 unit apartment in Denver for less than $2m.

@Paulo A. speaking from experience, I would use 1 party to do the short term and long term financing.  It will be more difficult to qualify the property for this, but you are all but guaranteed to get the long term financing this way.  If you use 2 parties, you might not get the long term financing you were hoping for when you started the project.  Let me clarify, when I say 2 parties, I mean 2 completely independent lending companies or brokers; not necessarily 2 different types of loans.

@Skyler Harris you need to get a contractor out there to give you a rough estimate of what it will cost to do the rehab.  Without having somebody knowledgeable give you an estimate, you are really just throwing out numbers that don't mean anything.  

@Amit Raghavan, I can give you the names of a couple of lenders who can do commercial financing.  Interest rates are usually a little higher for commercial and they are usually amortized over 20 years instead of 30.  You will also have to put more money down.

I purchased a 6 plex about 11 years ago in KC MO using commercial lending.  I actually used hard money to purchase the property and rehab it, then I refinanced it into a commercial loan.

Don't shy away from a deal just because it will be commercial financing.  Find out what your financing costs will be, run your numbers, and if it fits your criteria, then go for it! 

@Bob Smith check out this post that I did on Kansas City zip codes:  https://www.biggerpockets.com/forums/48/topics/276...

For the price range and rents that you want, the Northland would work well, but you would have to be willing to buy homes that are older than 1990.  Most of the houses in your price range in the Northland will have been built between 1940-1980.