All Forum Posts by: Kenton LeVay

Yeah this sounds like it's an issue with the specific lenders' policies and nothing with the laws around conventional/FHA loans. If you can show the lender that [1] you will be able to cover the mortgage on your SFH (may need a signed lease) and [2] you can afford the mortgage on multifamily property (rental income + your payment), I don't see why a lender would say no to that. Just be very clear in your intentions and reaffirm them that the numbers work.

So this seems like it would only affect those in expensive MF/commercial markets, which is a fraction of the total number of real estate investors out there. Besides, the 1031 is a tax deferment, not a write-off. We will still need to pay our fair share and it's the cost of doing business. Also, it would still need to go through congress and Washington is in gridlock for the next year and a half at least.

Well one option would be a Homestyle loan that lets you add in the cost of renovation into the loan amount. It sounds like that isn't an option for you because you already closed. The other options would be (1) get a personal loan, (2) liquidate some of your assets to fund this investment, (3) find a partner willing to pay for renovation in exchange for some equity/interest or (4) roll up your sleeves and DIY that sucker.

I would say they're subjective. Different entities probably have different defined criteria (ex. crime rate below x% is an A), but there is no centralized governing body to determine classifications. Just understand your risk tolerance and do your own research.

Sounds like you have a specific goal in mind which is key. Honestly, deals can be found in any market. In general, I'd look at a tertiary city of any major city in the midwest (Cincinnati, Columbus, Cleveland, Indianapolis, etc.) or southeast (Charlotte, Raleigh, Atlanta and Nashville may be too expensive but you could look at Knoxville or Chattanooga). I think it's fair to have some introductory calls with agents in various locations to get a better pulse on the market but just be honest with them and understand that it's their job to sell you a property so they'll make it sound great.

Hey @Briana Headley thanks for sharing! Just curious, how were you able to find a FSBO at that price in the Austin area? Seems like the big play here is appreciation (which is a sure bet in the long-term). Goes to show that there are still deals to be had, despite how high SFH home prices have gone up.

As long as you can cash flow the property after the BRRRR, I'd say go for it. This is all dependent on your goals and risk tolerance but money is cheap right now so it's a good time to leverage it.

I've never owned a frat house but I think it would be a great idea to write something into the rent agreement that shifts the cost of repairs onto the tenants. From a legal perspective, you also might want to consider having the tenant sign something that waives their right to sue the landlord if they get hurt from something in the house (for example, their parents can't sue the landlord if their kid drunkenly decides to dive head first into a door). Depending on where it is there may be protections against this though, I'd reach out to a lawyer or property manager in your area for more specific info.

I think saving money in the bond market is a safe play. You could store that in the stock market but it is riskier considering you have a defined timeline of when you'd want to liquidate. I'd chase for a return that at least eclipses inflation (2%-4%) because if it's just sitting in a Savings Account there will be an opportunity cost of not investing.

Small multi-family is hard to come by as-is in Raleigh but then couple that with the fact that it is a strong sellers market and it you get yourself a high barrier to entry in that space. Not saying deals don't exist out there but you will need to get crafty if that's what you're looking for.