All Forum Posts by: Michael Doherty

@Corazon B. what works for my partner @Ryan Deasy and I is Facebook marketplace. I post an ad there for a rental with pictures, detailed description ect. When they request to see if its available and set up a showing, I send them a list of pre screening/qualifying questions. This weeds out most tire tickers and the other half don't respond. Of those left that are 'qualified' I set up an in person showing. Out of the group of people that schedule to come, 25% don't show. I then weed it down to a few more and I then request credit/background screening and have them fill out an application. From there we make a selection. Out of 25 units we have a pretty good track record of no evictions or bad tenants (knock on wood).

We like Facebook because we can get a small glimpse of the people we are renting to through pictures, messages, FB wall, ect ect.... its all out there for the public. You cant get the same level of detail through other methods. 

@Weston Bovee as many others have said if you are looking for properties on 'realtor' 'zillow' or other sites, most often than not, an agent is representing the seller and you will have to discuss details with them directly. If not there should be a contact section for FOSB. Counter to what some people believe a listing agent will be more than happy to help you out especially if you are 'unrepresented' because it means a higher payout for them. Perhaps you can get a better deal because of this. On the other side you don't have anyone fighting for you and if you have never negotiated a deal before, there is a lot of moving parts... nonetheless not rocket science. You'll definitely want to hire a real estate attorney to do the contract work for you and closing. 

Only get your license if you plan to be actively 'selling' properties either your own or on behalf of people. There are many fees associated with being a realtor, probably $2,500-3k a year. My partner and I do direct mail campaigns once a month through Dealmachine and it has yielding tremendous results. That is something you may want to consider for finding off market properties. 

@Thomas Farley I think you should think about using your FHA differently than what you described. Think about it as an opportunity to get into the max amount of units possible rather than spend the max you can. So in this case try to get a 3 or 4 unit building. Whether that cost $500k or 1m, if it cash flows then it's irrelevant. Although check your local FHA limits per county. I know around here they will lend up to about 600-800k maybe less. But depending on your town ect it will vary- so check with your lender on that.

Also if you have a significant other and can get them on board with RE investing, you could use an FHA again if it was never in their name to begin with. For example.... I bought a duplex in 2016 with FHA (wish I went bigger). I purchased in my name only. Then 2 years later my gf bought a triplex with an FHA. She bought this in her name only. Then 2 years after that we actually used a low down conventional mortgage (10% down) to buy a single family together.

Additionally, you can also use an FHA again if you have a life changing event... you moved, job change, had kids and have to 'upgrade' ect ect.

@Natalia Perlova as an investor and agent (investor first) I can say it's not needed. If your plan is to buy and hold and not pursue some form of real estate as your primary job (Property manager, appraiser, realtor ect) then just hire a good investor friendly agent. As you may know, the buying broker does not get paid by you the buyer but rather the seller, so it's 'free' to hire an agent to represent you when buying property. If you plan on flipping property or looking to make RE a full time thing, I would lean towards getting it. 

As others have said, it costs a few thousand a year so you should be somewhat active either selling your own property or representing others to justify the fees. Keep in mind that once you are an agent you are bound by certain ethics when going under contract ect. For example, wholesaling while legal in many states is one of those 'grey' areas that as a realtor I probably wouldn't do. Buying property off market... are you going to loop your broker in on that or not tell them? Also keep in mind, that yes you will save money selling your own properties but your broker will still have you 'split' a certain % with them. 

For example, you sell your house for $300k. Typically you would spend roughly 5% in listing fees... say $15,000. Of the $15,000 1/2 goes to the buyer broker. So essentially you would be saving yourself $7,500 dollars... not bad. However, after your split with the broker... this could be anywhere from 50/50 split to 90/10 split your $7,500 can quickly dwindle down. Then of course there is taxes you have to account for. My point being, if you choose to go the Re license route, be sure you are doing enough transactions to cover the yearly fees and shop around with different brokers.

Hey @Thomas Farley one idea is to talk to your lender about a chafa hfa conventional loan product. With how competitive the market is, some sellers/ sellers agents will not even consider FHA because of the stringent appraisal requirements. Now... if your making offers on beautiful turn key properties, no problem. But if you have 2 offers of equal value ect side by side and one is a conventional and one is an FHA, I can say with confidence the conventional offer would be taken.

Ask your lender about the chafa loan because you can still take advantage of a “low down” loan but with conventional appraisal standards. 

@Chirag Gulati thank you for the recommendation! Stephen I will reach out with some thoughts. 

@Daniel Frantz it sounds like you've already started on the right path. You could do a couple things. Depending on the current value of your single family house you could take a HELOC out and use that as a down payment on your next property. My recommendation is you should look for a BRRRR for your next investment. So learn everything you can about BRRRR'ing. I run my BRRRR numbers the same way as if I was to 'flip' the house. There is also a great calculator on here you can use for reference.

You should BRRRR your next property because you can reuse that initial capital again. Another option is... Depending on your living situation if you have a significant other... you could have them use a low down loan like you did and buy a Multi family house and do another house hack. Essentially you would be living for free and can rent out that other spot in your current house and cash flow. Use that additional cash flow money to invest in other properties.

@Ovais Zuberi Unfortunately yes that is true for most traditional banks. It's called a 'seasoning period'. They should allow you to start the process a month out as it will take roughly 30-45 days to close out the loan. 

@Jonathan Messinger Hey Jon! Have you considered Central, Ct as a market at all? A number of towns around here offer strong cash flow and moderate appreciation. Central Ct would also allow you to check up on your property in person from time to time. 

Hey @Jacob Slomski congrats on getting started. I grew up in New London County (Waterford) and now reside in West Hartford but still visit home frequently. There is definitely more inventory up this way and I would say a better opportunity for cash flow if that is your main goal. You can still find some good deals in New London but you really need to be looking at off market stuff. The majority of my portfolio is in New Britain, which is a good town for inventory and cash flow.. although inventory everywhere right now is low. Let me know if I can be of any help along your journey!