All Forum Posts by: Marshall M.

@Shaun Grindle nice work on finding a potential deal.

I always ask for rent roll, delinquency report (very important right now), profit and loss statements, what utilities are reimbursed if any, if there any down units and why are they down, then ask for last renovation of the units, condition of roof, hvac and any plumbing, electrical or structural issues.

@Stephan Fequiere while timing the market is not really a sound business strategy, there are a few deterrents to flipping right now. The lending industry is currently upside down which hurts your entry options (HMLs requiring more points and larger down payments) and exit options (lenders requiring higher credit scores and larger down payments), the vast majority of buyers are staying at home, people are losing jobs in droves and tenants aren’t paying rent (there goes plan B).

From what I’ve heard in my local market, costs for materials shot up when the lockdowns were announced.

There’s probably a good reason why many of those investors mentioned by your friend aren’t actively participating in this market.

All of that said, you can plan and move forward by adding more cushion to your numbers so you can plan for more conservative costs and exit price.

@Michael Cavalli it sounds like you’ve put a lot of time, money and effort into the house. I’d look at it from a few different perspectives, you could rent one unit and live in the other one, you could rent both units and move somewhere else or you could sell.

First, figure out how much each unit will rent for. Check out rentometer.com to start. Then see what your costs would be (mortgage, insurance, tax, etc.) Does it cash flow or are you paying to keep the property even as you collect rents?

Next, take the projected cash flow divided by the amount of money you've put in to get a projected annual return on investment (ROI). Is it 2%? Is it 10%? Is it 20%? Is it negative?

You can also try to refinance and pull your money out which will increase your ROI, but reduce your cash flow. If the projected cash flows are negative in every possible situation then I would cut my losses and sell, as hard as that would be.

Hope that helps. Good luck!

@Bianca Nunes In Fairfax County I've seen rents for as high as $1,100/room per month with most of them in the $900-1,000s near Tysons, and they creep up to as high as $1,300 in Arlington. Rents are also pretty strong from student demand near George Mason in Fairfax. As you move south towards Annandale and Springfield they drop to the $600-700s. Alexandria is all over the place with rents depending on which part you look at. In northern VA your best bet to house hack is to get roommates in a condo, a townhouse or a house. This area is short on reasonably priced multifamily. I've noticed that a lot of investors rent houses out by the room to get them to cash flow.

What areas are you interested in and what’s your budget? That will help narrow down the options that are available to you.

@Kevin Lin pictures definitely help but they’re not mandatory. I’ve run test ads with nothing but a description before (no picture) and got a few roommate leads pretty easily. We’re lucky nova is such a strong market.

And yeah it’s crazy how fast one bad tenant can ruin a place. Just dealt with something like this on a recent listing. What a headache! These coronavirus stay at home orders and eviction stays are putting a lot of landlords in a tight spot. Stay safe and keep us posted.

@David B Richardson for sales jobs you typically need a two year track record of consistent income. I’d look into doing subject-to deals where you skip the mortgage app part. Can be used for rental, flip, personal, etc. Keep going! Good luck!

@Kevin Lin that sounds disgusting! I second getting a cleaner for the common areas in the future. Your best bet at this point is start building a waiting list. Do you have pictures of the house and room from before the tenant moved in? Post it on Facebook and craigslist and try to get a list of prospective tenants going.

Good luck!

@James Lord that’s great advice. Thanks again for sharing!

@Tracy Levy yes I've had pretty good results from Batch Skip Tracing like most of these companies I've heard it can vary by location. Either way far more cost effective than hiring a VA to skip trace which I did a few times and burned a hole in my wallet.

@Peter Korty as everyone else is saying, I think you’re off to a great start. A typical investment deal will be in the 20-25% down payment range with 50-75 bps over a residential mortgage rate (so think 4.1-4.3% if owner occupied rates are around 3.6%). Closing costs will probably be higher. You can use First American’s website as a resource for closing cost estimates: https://facc.firstam.com

I’d budget 8% vacancy instead of 5% so you have a full month of vacancy budgeted in your numbers. Maybe bump up the maintenance to 10%. Not trying to tank your deal, but you want to make sure you have some cushion in case something goes south.

Good luck!