All Forum Posts by: Mark Millich

I'm speaking to a lender right now and was told that in order to qualify for an $80,000 loan I need to have 6 months in financial reserves in order to pay for the PITI. Is this typical?

@Patricia Steiner

Hi, Patricia! Thank you for the thorough response. This is great information. So I currently am working with a realtor, but a lot of people I’ve spoken to are really advocating for me to do a direct mail campaign in order to find the best deals. It seems that a lot of people have success with this, but I’ve never understood how they were able to determine that what they were getting was a good deal without going through a realtor or getting an appraisal first.

Finding off market deals, even with realtors, seems to be a little difficult as well. I’m starting to reach that point of analysis paralysis and haven’t pulled the trigger. It's difficult, but I'm sure it can be done!

The idea of the real estate game is to obviously find properties that are priced below market value… aka “a deal”. How do you determine what that market value price is for a particular property, however? Is that where the appraisal comes in? Zillow has it’s Zestimate, but I’m told not to put too much value into that as it’s often times inaccurate.

I'm networking with real estate agents and also browsing the MLS daily. These are probably the two most common forms of property hunting, but it seems difficult to find the best deals using these methods. I recently began browsing Craigslist and have found what appears to be some decent deals. However, with limited information on each posting, it has me questioning their legitimacy. Because I don't live in the best area for real estate investment, I'm looking to invest in the Pittsburgh, PA area and all surrounding areas where the market is cheaper. I've found some decent properties in Mckeesport for very low prices, but the area is absolutely terrible and labeled as one of the worst areas to live in in Pennsylvania. Because I'm investing out of state (I live in WV), I don't often get the chance to check out some of the properties that appear to be "good deals" unfortunately.

Having said that, my question is which method has worked best for everyone to find the best deals? MLS, driving for dollars, direct mail marketing, etc.

@Nick Giulioni Thanks, Nick. Yes, I'm focusing more on the cash flow for these particular properties. However, overall, I am looking for properties that would have a good equity increase and ones that I could trade up. This deal just sounds decent considering the price and potential cash flow. In terms of funding, I would be going half on the properties with a partner for a down payment and then take out a loan.

I’m discussing a potential deal with an individual who’s in the process of fixing up two houses and selling them both for $40,000 in total (for sale by owner). They’re both on the same lot, so it’s one property tax. One of the houses is already occupied by a tenant as well with a rent of $600 a month.

The issue – the houses are in a Class D area with a relatively high crime rate. The houses are also over 100 years old. My coworker, who’s also into property investments, has five properties in this area that he bought in cash and is doing very well on in terms of cash flow. He does have some issues, but nothing detrimental. As a matter of fact, the individual selling the properties is someone that my coworker purchased one of his properties from (that's how I got in touch with him). I would obviously get a home inspector in, along with completing a title search and getting an appraisal before purchasing the property. If bought, I would also contract out a property manager. It would be my first property investment, but I’m obviously a little hesitant considering the area.

Thoughts? Thanks in advance for any feedback.

@Derrick E. Thanks for the information! I haven't found any class D properties on the MLS here in Charles Town, but I've been keeping a lookout. Now I'm not so much opposed to class D properties, but more concerned about class D neighborhoods. What's your take on investing in class D neighborhoods? The area my coworker invests in really isn't the safest, so I'm a little hesitant about investing in that area. Having said that, he's making really great cash flow. I've heard these neighborhoods typically cause more headaches and stress . Thoughts?

@Steven McLarty - Thank you for the kinds words and support, Steven! One of my goals with being on here is to hopefully network with people who can help me find those types of deals. I've been watching the webinars and using the calculators on any and all deals I find. I'm treading very carefully into this field. I know mistakes are almost inevitable when first starting out, but I'm doing my best to mitigate them.

Congratulations on your three properties. That's far ahead than most people! I'm certain you guys will continue doing well and eventually reach your goal(s)!

@Joe Chirdon Thank you for the advice, sir! I was originally looking in D and C neighborhoods because of the prices, but have begun looking in B neighborhoods as well. I'm trying to do anything less than 1.5% on deals.

@Kiera Underwood

So right now I’m going back and forth on my financial avenue of approach. I’m hesitant on taking out a loan. My coworker is buying his properties in cash. They’re very cheap and then he’s rehabbing them. He recommends buying in cash so you don’t immediately have to start worrying about a mortgage if you need time to fix up the property. Having said that, they’re not in the best areas. I am looking at investing out of state in Pennsylvania around the Pittsburgh area. I have family up there that could help manage the property, so the distance wouldn’t be as concerning to me. My concern is investing too much money/time into just one property to fix it up when I could have potentially just taken out a loan and invested in a property or several properties for less. Loan vs cash essentially and single family vs multi family homes. Any thoughts? Having a team to help find deals would definitely be ideal. I'm working on building that. All the properties I've been finding are on the MLS.