All Forum Posts by: Michael Kistner

Any company that needs that much money up front is a red flag. I understand if the company has never worked for that client before and wants to protect themselves. But anything more than a small retainer or on large projects requesting clients put money in an escrow account is a sign to find someone else. I understand smaller companies can run a little tight, and in those cases I’ve paid for materials upfront to reduce the risk for everyone.

@Courtney M. Yeah that’s a pretty big deal finding out lenders LTV limit. And better to shop around before you really need it

@Matt Sobers Keep the property if you can. Especially if you’d be cash flowing. Put 3 1/2 - 5% on your next property if you’re able to. If you pay cash for your next property you’re starting from scratch. If you go purchase your primary home you already have a cash flowing rental in a high demand market. Down the line you may be able to HELOC, cashout refi, or 1031 exchange. By selling it you’re losing those options. Good luck with your decision! - Mike

@Josue Velney I agree. Companies that require more than 10% down scare me and prefer not paying anything upfront. Longer projects I like to set up a percentage system with them and shorter repairs remodels the job should be done quick enough that it wouldn’t matter. I’ve had friends pay for small bathroom remodels/home repairs and then they’re no longer the priority to the contractor. I believe those companies are the exception and not the rule but wouldn’t want to risk it on an investment property. Good topic! - Mike

@Jeremy Bartlett

 This is a problem for a lot of investors. To pay down debt or to expand?

 I like the idea of paying a little extra each month to my highest grossing property. That way when it’s paid off it frees up the most money. 

 With money being so cheap right now I don’t want to focus all my resources on paying off the debt. Let the tenants do the heavy lifting. 

 I’ve also staggered some of my loans. I have a couple 10 year loans, 15 year loan, 20 and 30. That way some cash flow more than others but some will be paid off earlier than others. 

Hope this helps and good luck!

 - Mike

@Kelly Kormos I’d ask if it’s separately metered. Utilities and water. Does each unit have their own A/C unit. How’s the parking situation. Check out the landscaping. Will it require regular upkeep and if so are you able to increase the rent a little for it. As far as Out of state property managers go, i like to recommend @Hannah Peerbolts blog. Hope this helped, good luck! - Mike https://www.biggerpockets.com/blogs/10723/71963-finding-the-right-property-manager-as-an-out-of-state-investor

@Courtney M. I’ve used hard money a few times in similar situations. I’d recommend finding lenders who’d refinance before you go that route. I’ve been able to find lenders who don’t require seasoning periods which saves some money given the higher interest rates. If you have the ability to HELOC that’s probably a safer bet just starting out. Hope that helps, and good luck! - Mike

@Dylan Mathias • 1% Rule - Quick, easy, usually the first test it needs to pass. • ARV compared to asking price - If there‘s a lot of room for appreciation I‘ll look deeper at the deal. • Pro-Forma - Worst house on the street scenario. What potential does it have. - MIke

@Kyle Murray Is there potential for forced appreciation? Do you think it’s under priced? If so you could always look into hard money, fix it up and refinance it. It’s a little risky but it’s another way of buying it with little to no money down. - Mike

@Kyle Murray Yes they can call the loan and get you for mortgage fraud. I bought a triplex with the agreement that I would live there for one year. After living there for two months the lender requested to see my most recent utility bill. Now with that said, if you buy it with the intention of moving in and something changes, (job location, sick family member you want to be closer to) you can move out with their approval. It’s all about your intention. Hope this helps! - Mike