All Forum Posts by: Kendall Staggs

@Scott Phillip I recently stepped away from my 7 to 5 as an engineer too in order to expand my real estate investing. I live in the tri-state area! Reach out and I will happily show you the good areas for investing

Welcome to REI @Jacob Thompson.

I am a REI in the same area you are currently looking to invest. No reason to build out a team! I have plenty of contacts and I am willing to share any and all of them with you.

I agree with @Antonio Cucciniello, you just need to get started. I'd be happy to help look at properties and analyze deal along side of you if it would help. 

Typical HELOC lender will lend up to 90% LTV. So, you should have the potential to get a $60k HELOC right now. However, getting a HELOC can be tricky on investment properties, so you may have to shop around to many different banks.

When it comes to acquiring another loan, there are many different ways to determine if a bank will approve you. First, if you're purchasing over 4 units, then this will be considered a commercial loan and the cash flow which the property produces is the main factor in obtaining financing. 

For less than 4 units and slightly for larger multifamily, the bank will mainly look at your debt to income ratio (DTI) to determine if you are qualified for financing. The lower your DTI the easier it'll be to obtain financing. Most banks look for somewhere at or below a 40% DTI.

Hope this helps. Where are you looking to invest out of state? 

First off, congratulation @Pete Winslow! Sounds like you are on the right track to a successful REI career. This project sounds like you have a lot of major or whole home projects which can make things difficult while living in the dwelling. Be sure to allow time in your schedule for moving all of your items around the home while doing the floors and when renovating the kitchen.

The only thing I would do differently has to do with the studio apartment under the car port. I would move that project to the first or last item on your to-do list. If you move it to first, then you can live in the apartment while you renovate the house. If last, which would be my suggestion, it allows for any budget issues or market issues to play out. Finish 1 project before moving onto a second. 

I also suggest you build a detailed schedule and budget for the project. Start by putting estimated time frame and cost to each of the already listed projects. Then, build a schedule with actual dates, milestones and be sure to add in extra days to allow for unforeseen issues which arise. After you have the budget and schedule together, you'll have a more clear picture on the projects you want to take on and when to take them on.

PM me with any specific questions! Good luck!

@Jeff Plotkin your bank will not do anything to help you with the appraisal. However, I have challenge the appraiser on 2 of my sales in the past. You must contact the appraiser over the phone or in person and ask "sir/mam would you be willing to modify your appraisal report if I were to suggest some better comps and some areas where the initial report was a little off on the grade of materials used in my rehab?" You have to understand, the appraiser has no requirement and very little incentive to modify their report. The appraiser has also already been paid, so this will just be unpaid additional work. So, you have to build a repour and be extremely nice.  

If the appraiser says yes, take the report, pick every aspect of the report where the appraiser was incorrect and find 3 comps which are better than the comps used. Your real estate agent should be able to help with finding comps. Next, find 3 aspects of their appraisal report which were correct and exactly on point. Then, send an email to the appraiser and the loan officer asking for the modification. Be sure to start with the 3 aspects of the report which were correct and spot on, then start in with a short and concise list of the areas of the report which you request be reassessed and the 3 "better" comps which you would like to have taken into consideration. Be sure to avoid negative language and never require or demand they change anything. Always use wording like "please consider", "I request" and "reassess". 

If this does not work, you will likely have to have another appraisal and maybe even have to change banks all together. 

Deal seems good as long as you can keep the rent that high. You can't avoid paying taxes on the money you will make. You will have depreciation as an additional write off. You'll end up with approximately $6,700 * (1 - Your tax rate) as your after tax annual return.

Do not accept cash, money orders or checks!

First, verify with the tenant that they did in fact get a money order by checking the receipt. If so, then the post office may have lost the MO. Do not be surprised if it shows up 1, 6 or 12 months later. I would let the tenant know you are going to consider their deposit as payment for the rent and if the MO shows up you'll return their deposit. 

Also, ensure you have a policy for what happens when a tenant exhausts their entire deposit. This may mean they have to pay extra each month to build it back. Or, they may have to start paying for any and all repairs which are their responsibility immediately upon completion of the work. 

Do not worry about it. If they meet your screening requirements then rent to them. Someone with great income and a great credit score will rarely jeopardize their credit score by doing anything below the line with a rental property. 

You should be able to get an idea from their profession. For example, I have a tenant who is a college football coach and another tenant who is a traveling engineer. Both of them have 6-12 month contracts. But, the football coach has been with the team for 4 years now and hasn't missed a rent payment and I have had 3 different engineers in the other rental from the same company, the company just keeps sending different ones to stay in our apartment. 

Yes you will have no problem getting an FHA loan anytime as long as you don't already have an FHA loan.

Be sure to look into all of the fees associated with both FHA and Conventional loans. Like @Kyle Davidson said, you can often get a conventional loan with as little as 5% down and the fees could be much less than an FHA loan. Shop around at many different banks and especially local credit unions for more options. 

@Jeremy Wirths is correct. You must look at the neighborhood, if everyone has hardwoods, then you have to install hardwoods or reduce the comp price. You can also get into the question of flooring price relative to the price of the house. I know prices in Canada can get rather expensive, so if you're flipping a $600k house, then why are we even talking about the $2,000 difference between the two types of flooring because it's a very small percentage compared to the overall price of the home. 

Lastly, be sure to have the flooring installed correctly, regardless of the type, because a kitchen is subject to water spills and leaks so there are added precautions you should take to protect the floors from a spill or leak if it were to occur.