All Forum Posts by: Mason Liu

Hey Colette,

I personally use Rentometer. BiggerPockets also has a rent estimator tool. Both of these tools can provide a generalized idea of the rent you'd be able to get with your property as you'd be able to look back 12/24 months at all public data in regards to leased up homes in the area.

If you're struggling to find a direct comparable to your duplex, what I'd do is try to find the most similar type of property that is more common. IE: if your duplex is 2 units of 2bed/1baths, I'd try and find rent data on 2bed/1bath homes and 2bed/1bath condos. More likely you'll get a lower rent from your duplex unit compared to a similar SFH, maybe similar to the condo, so you would need to make an adjustment there but it will probably be in the ballpark.

Hey Kyle, in this case I'd say you can identify the market you want to invest in first, and then start networking with top agents in that market to get more insider/local information. Rinse and repeat for every market you want to invest in.

Like you said, it cannot be expected of a real estate agent to be a wizard of every market in America, but the silver lining there is that there are some really good agents in each specific market which can provide a comparative advantage to you if you develop a good working relationship.

Hey Alma,

First off, great job on the deal! That is a large amount of equity built in 14 months, and I'm sure the house is awesome now.

Wanted to ask if you could provide me the HM lender you used? Noticed that they were able to be flexible and offer you 2 months extensions, so sounds like they were great to work with. Always looking to meet more good lenders!

Hey Michael,

One thing you can do to avoid bumping into the DTI limitation is exploring non-QM products, for example a DSCR loan. Many of these products will only look at the property's income potential as opposed to your personal financials. These options are normally higher cost (higher rate + potentially higher origination fees + prepayment penalties), but you have a much easier time qualifying if you have a good deal, allowing for more scalability.

Hey Caden, first off good on you on have a very clear short term goal when so young! Also hats off to you for your work ethic as well.

One thing I would recommend when starting off is just getting really good at the basics of not just real estate investing, but financial literacy as well. Make sure you have good credit, if not start building it now. If you become a project manager, focus on becoming a very good one if that is your career of choice so you can increase your income stream. If you want to be a real estate agent as well to supplement your income or for that to be your future career, get really good at that so you can earn a high income. A high income + good credit + low debt will put you in a great position to explore a lot of opportunities for your first several properties. Not to say that you need a high income and good credit, but it does make it a lot easier.

By 2024/2025, the market will have evolved a lot, and so will have you. Take it day by day, you don't need to commit to a strategy 2 years down the road now. Start networking, align yourself with experts in the space, or people you hope to emulate. That will not only help you avoid pitfalls, but at the same time give you true direction and indrect experience on what you really want to do in your REI journey.

Hope this helps!

Tough question as it does depend on your overall investment goals and strategy, as well as the current ROI you are getting on the property as a rental. However, assuming you are able to deploy the capital into a better investment vehicle compared to this current home long term, I would say yes towards selling it. Those big ticket items are large expenses, and while the buyer of your home will probably use those items to negotiate a seller credit, at least you don't have to worry about them + all other expenses that comes with a 100+ year home.

For hard money lenders, I'm seeing roughly 10-13% with a 1-3% origination fee, depending on the applicant and also the lender. They mostly care about the deal only (ARV and what percentage of ARV are you buying/rehabbing the project for)

Hey Diane,

Qualifying for Hard Money definitely does not mean you qualify for a conventional mortgage. Typically, the qualifications will be quite a bit different, with the former looking more at the deal itself and the latter looking more at your personal financial details (credit, income, debt etc).

I think it would be best for you to hop on a call with a a hard money lender, and a normal mortgage underwriter and let them educate you on the underwriting requirements for each product. That way you know for sure. You can also go one step further and get as many of those docs ready as soon as you can so the moment a deal comes by, you can act.

Typically for HM, they will fund anywhere between 70-90% of your acquisition cost and up to 100% of your renovation cost (this is dependent on the overall appraised ARV of the home, whole process here). Most HM lenders have different draw programs, once again another reason to call and ask.

For private money, typically that will very drastically depending on who you are borrowing from.

Hey Michael.

You definitely can introduce partners into the deal. However, I'm not sure if this is good enough a deal to introduce partners into. I say this because unless you are able to get a private money lender or partner to come in and lend the downpayment and renovation costs to you at a cheap rate, you aren't really going to be making much cash flow from the property itself. For example, if you have someone lend you $210k (closing cost + rehab cost + 20%) at 8% over a 30 year amortization, that is a monthly payment of $1541. That wipes out the entirety of the cash flow.

On another note, if the BRRRR is the intended strategy, it may be even tougher to use a third party because you won't be able to get enough cash out from the refi to pay off the third party. In this instance, you're still leaving in more than $150k in the deal (which that in itself is fine), but you have to be okay leaving that liquidity in the deal. If your cost of capital to put the downpayment/closing costs/renovation is too high, it might not be a deal.

Depending on the source of the deal (on market, off market) and the potential level of distress (IE: If on market, how many days on market. If off market, why are they selling), you can negotiate to make this deal more attractive. Can you get the seller to pay all closing costs and buy down the rate? Can they come down on price?

Lastly, your closing costs on the purchase side seem pretty high. Typically purchasing closing costs are roughly 1-3% of purchase price, whereas in this case $40k is over 6%.

Hope this helps!

Hey Keron. Couple questions here. First thing is to check your local regulations in regards to short term rentals. Assuming there is no restrictions against short term rentals, the next step would be to crunch some numbers. Go on airbnb and look at properties similar to yours that are for rent, and see what that market looks like. You can also utilize sites like airdna and data rabbu to get approximate numbers on short term rentals in your area. Compare that to the revenue you'll get from long term renting and you can get a rough idea of whether it makes sense. The margin has to be quite large to make STRs compelling as the expenses and time commitment for self managing is a lot higher.