All Forum Posts by: Mark Leavitt

Hi 

@Jacob Zimerman If you are looking for an agent in Northern Colorado I would be happy to help your clients. 

Hi Hannah, 

I don't think you will like the advice I have to give, but we all need to start somewhere, The first question I would ask is do you have your own home now? I really suggest you keep learning from bigger pockets and all the ways to grow wealth through investing. 

When you are in a market like anywhere on the front range it will take cash to find an investment property like the one you are hoping to find. I understand the desire to want to start investing now, but for some of us it takes time to build up to the point of buying. 

My Advice to you would to keep learning, growing your savings and reach out to a lender you can rely on to help you get to the point you need to be at to buy this investment property. The lender will help you find out how much you can afford and help you map out the way to get there. build your credit score up while building your savings. 

Just a fast example for you.

say you buy a duplex in Co springs average price is $350,000 

I take it you are looking at using an FHA you are looking to use 3.5% down

Just to get into a property at this price point at the minimum down you are looking at 

$12,250 not counting closing costs which would be around $4,500 I would say to get into your first property you should try to have $20,000 in savings even if you went with loan assistance program called CHAFA you would need to bring about $10,000 to closing. 

I don't say this to discourage you, It took me over 3 years from when I started learning about investing until I was financially able to invest. But most of all learn every aspect about how you will finance your investment and start working to make that happen!  Best of luck

 

Yes I had a client that had this issue. I am assuming you bought the first property as an fha? 

I am not a lender, but for a second fha you would need to purchase 100 miles away from your first residence. Or you can put as low as 15% down if you will live in the new property. 

Ask your lender what the possibilities are to do conventional loan over fha. I know conventional is a bit more strict on multi family. But if this property is in the same town as your first it will be very hard for you to use a low down payment fha loan if your first property was fha as well. 

Hi Jacob, sounds like you are super ready to get started! There is tons to learn before you truly gets started but  understand loans and the loan process is key to your success! Definitely reach out to a few lenders and learn everything you can about loans. The rules and regulations are always changing so be up on it at all times. If you want I have a few I can refer to you here in northern Colorado and Denver as well. 

But as an investor here in northern Colorado and Reltor Fort Collins is a very difficult market to start in. Though not impossible. Understanding what you qualify for in a mortgage will then be key to help you figure out what type of property will fit into your investment portfolio. Bigger pockets dose a great job of helping us dream big. But the fort co market and multi family type properties there right now start in the 500k range. Very high buy in for a first investment for most of us, but it is possible. 

Also if you want to learn more about our local ft co market I strongly recommend you get involved with James orrs meet up group for real Estate investing. He also has a pod cast that focuses on our local market. Then once you are ready look and interview investment savvy realtors that will walk properties with you and talk numbers with perspective. Hope this helps a bit.  

If you can get a conventional loan it's a no-brainer to stay with a conventional! FHA is really just for those with bad credit or low money down. But it be harder to get into property at times with an FHA because of the rules and regulations on what they can loan on.

also if you are doing less than 20% down you will eventually have to refinance to get the pmi to drop off on an fha loan. Pmi is for the life of the loan. With rates where they are today you most likely will never want to refi, with a conventional pmi will drop off after 20%. 

So for each property it’s different and each person. But I say always try to go conventional first and then use fha as a fall back. 

So are you working with an agent? you talk about all the agents you have talked to want you to sign the business disclosure. If you are working with an agent they should help you with all these questions. But if you buy a rental that has a lease inplace you as the new landloard would need to honor that lease. You cant just raise rents or kick them out because you bought it. If they are on month to month then that is a bit different. Sounds like you are talking yourself out of this deal, but you are also looking at this as a live in and house hack. If that is your goal look for properties that you can easily do. where you are not kicking out tenants. And with the laws of no evictions at this time due to cover with goes here in Colorado till the end of November last I looked with the possibility of getting extended you might be creating a liability at this point with this property. 

Hi, I am a house hacker and nomad real estate investor in Northern Colorado. Basically utilizing all the lending rules to give me the opportunity to buy rental type properties with lowdown payment. Being a Reltor as well I have lots of crazy lending stories but this one that happened to me personally takes the prize. I just hope this story helps you avoid my mistake and not claim your earnest money. 

I am currently under contract on a small duplex in my market of northern Colorado, I was set to close on Oct1 on the property. I was told by my lender that everything was running soothly because I am a well qualified borrower, I have everything that a lending company would like to see from a borrower. But 3 days before closing my lender called me up to say "We are sorry, but due to wording in my home owners policy we will not be lending to you on this property." It turns out that as standard practice on my home owners policy through nation wide, under a heading "other inclusions" there is a coverage for "Landlord furnishings" and due to this wording I was no longer qualified for the loan.  

Because of all the other hoops I had to jump through from this lender, things like writing them a letter explaining why I wanted the home, getting a signed lease for my current house hack, And the time waisted from them as they had my home oweners policy 3 weeks before all this. I lost my Ernest money and the money I put in to the deal.. (home inspection and appraisal).

today I am still scrambling to make this deal work, and am still hoping to close on it with a different lender this month. But be leery of lenders that will tell you they can provide the world but in the end its there underwriter that will take it away from you. And make sure you fully look over your home owners policy before you submit it to the lender. especially if you are house hacking or nomading your way to finical freedom. Keep out any wording that states landlord or rental property terminology. Also on your contracts if you are working with an agent. Always try to slip in loan termination deadline as close or on the closing date, incase anything like this happens to you. I hope this story helps you in your next house hack purchase.  

I agree with what Arron said. My first deal I did while I was unemployed the only way I could get it was by having a co signer. You will need someone with at least 2 years employment history. You could go hard money way, but you need to know what you are doing here. At 20k in savings and looking for multi family you will have a very hard time finding anything in Colorado along the front range. You will be looking at 265k or under in properties to just have 4K left over for fixup. I am never going to say you can’t do it, because where there is a will there is a way. 

Most of all focus on what market you want to be in! Know the market! I strongly suggest pod cast 250 on here. When grant cardone talks about his markets. If investing is what you want to do, then you have to be in the mindset. 

Best of luck but your first bet is to talk to a lender in the market you want to be in. Local lenders!!! Preferably one that works with investors. And if you are in northern Colorado and want to walk properties to show you what lenders will lend on and what they won’t, feel free to contact me. Best of luck!  

I know a few in Colorado if you want to talk with one specifically in Colorado let me know and I can pm you there information. Let me know if you are wanting to go commercial or residential as well. 

Mark

Hey Garrett, 

Welcome to the Colorado Market. I would say before you really get into looking find and fully understand every aspect of what loan product you can use. I am a relatively new house hacker in a duplex up in northern Colorado. thought its a different price point understanding loans has been the biggest help for me, so I can fully understand what I can buy and what I can not. For example a house with two meters for some loan companies means you will have to put 15% down if using a conventional loan. 

I might be mistaking but since you are talking about the 203k loan I am guessing you are going to want to go FHA? Which that loan limits you to a specific price point, and its will be hard to find multifamily anything in an FHA price point in Denver. Make sure you fully understand your market.

I strongly encourage you to listen to the Denver real estate investing podcast by Chris Lopez and put on by Castle and Cook

the promote Joe Massey as there mortgage guy and he puts on lots of in depth classes on best mortgages to use and how to break into the Colorado market. I am not going to say its impossible to find what you are looking for, but in the terms you have laid out and what you want to use to get a B class property in Denver, all the stars will need to align perfectly. Find a Mortage guy you trust and believe in get prequalified, and then you will be able to really see what kind of multi family things you can buy, because Biggerpockets is great to get us all hyped and excited about investing but every case is different and there is so much to learn in this world of investing. Best of luck! and if you need more direction or people to help you out here in Colorado let me know. If you want to look further north in northern Colorado market let me know as well. I will be happy to help.