All Forum Posts by: Michael Doherty

@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! 

@Michael Montana How about a 3rd option and use a HELOC? Depending on what your current rate is on your house (if its 3 years ago, its probably not terrible) you may only be saving marginally if you refinance. There are much more closing costs to a cash out refinance than a $500 appraisal. So simple math... what are you all in costs to refinance? Once you get that number figure out how much you would be saving by dropping to a lower interest rate per year.... you said around $100 a month? How long do you plan to be at your current residence? There is a breakeven point to consider. It's going to cost me $5,000 dollars to do cash out refinance... how long do I have to stay at my current house to breakeven on the interest I am saving from going from my current Interest rate to the new proposed one.

Or I could use a HELOC, save on the closing costs and still tap into that 100k equity for a low interest rate you only pay on when you use the money. Yes you will still have a $500 appraisal to pay for but much cheaper overall than doing a cash out.

@Crystina Milici any town right now you will be hard pressed to find a deal that makes sense numbers wise to either flip or BRRR. Your Best opportunity is to cold call or door knock on property that appear distressed. Everything on the market is being bid up to a point that doesn't make sense. I know a couple off market properties in the area but they are more turn key at the moment.

@Wesley Canhedo if you can increase your home value by 210k how much cash would it take in renovation costs to get to 800k ARV? Depending on that, I would just sell my house and go buy 2 BRRRR deals with the cash on hand.