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All Forum Posts by: Michael Tully

Michael Tully has started 2 posts and replied 29 times.

Post: Hit a wall with high DTI

Michael TullyPosted
  • Realtor
  • Las Vegas, NV
  • Posts 37
  • Votes 14

Also, double check how your lenders are calculating your DTI. Here's a post by another BP user on this subject (Your lender may have different requirements and YMMV but still good to check how they do their math):

Originally posted by @Chris Mason:

Hi @Christian Allen,

Someone is showing you bad math. :) Rental income calculations are done wrong by the majority of lenders you speak with. None of our training or formal licensing education covers it. The math you show is for owner occupants of 2-4 unit properties, not for pure investment properties.

Rent * 75% - PITI.

If that yields a positive number, PITI has already been counted (when we subtracted) and you add that (the resulting positive number) as mortgage qualifying income.

If that yields a negative number, PITI not covered (eg, the negative number) is added as a monthly liability.

So let's say you make $3000/mo and have a primary residence PITI of $1000. DTI is $1000/$3000 = 33%.

And you find a property that the PITI will be $1400, and it rents for $2000.

$2000 * 75% - $1400 = $100.

$1000 / $3100 = 32%.

As you can see, if you are working with a competent local REI-friendly lender that is doing the arithmetic properly, your DTI should be improving with each cashflow positive property you acquire.

Post: Hit a wall with high DTI

Michael TullyPosted
  • Realtor
  • Las Vegas, NV
  • Posts 37
  • Votes 14

Check around to all your local/community banks. The DTI requirement is due to your loan needing to meet the requirements to be packaged up and resold off of the banks books. Local and community banks might have a portfolio loan where they keep the loan on their own books/in their own portfolio and since they don't resell that loan they don't have to meet the normal DTI requirements. Just call around and ask to speak to whoever is in charge of loans at each bank and ask if they do portfolio loans.

Search around on the forums here to learn more about portfolio loans and what you'll need to get one. 

Post: Linoleum Floor Tile Issue

Michael TullyPosted
  • Realtor
  • Las Vegas, NV
  • Posts 37
  • Votes 14

Could it be the adhesive is squeezing out and collecting dirt/dust from shoes etc? If you feel the dirty areas do they feel a bit tacky?

Post: Is it a good time to sell in Las Vegas?

Michael TullyPosted
  • Realtor
  • Las Vegas, NV
  • Posts 37
  • Votes 14

@Bill Brandt In the bottom right of the full screenshot/website it says growth rates are compared to previous year. Still seems off though right?

Post: Is it a good time to sell in Las Vegas?

Michael TullyPosted
  • Realtor
  • Las Vegas, NV
  • Posts 37
  • Votes 14

I want to preface this post as not having hardcore stats, but more of an anecdotal perspective that raises some questions for me. I was born and raised here in Las Vegas and have lived all over town. I have seen neighborhoods change and areas that used to be a desert landscape developed into new construction. (For reference I am 27). 

Our state's (and Las Vegas') largest employer is MGM Resorts, and the other casinos are a huge source of employment as well. Many people are still laid off and collecting unemployment. With the supplemental income from the feds, this is a HUGE amount of money for everyone currently ($4k a month) and is helping to keep things afloat. A lot of people are using this money to enjoy their summers and go to the pools and vacation and whatnot. The casinos were extremely busy (especially since California shut all their bars for the weekend due to COVID spike and Gov. Newsom's order) and a lot of the people there were from Cali, but many locals were there as well. I have seen lots of new Mercedes and people who work in the industry somehow buying new luxury cars and going out and partying, despite being unemployed. I cannot verify, but those that I know who were lucky enough to work this weekend claimed that people were "balling out" on their unemployment money.


With the largest employers having a large share of their employees still unemployed, and with the future of the tourism industry seemingly unstable (rumors of another casino shutdown looming in the face of COVID spike here in the state), I'm wondering who are all these people buying houses? In what industries are all of these Californians who are moving to the valley working? Is there any data on whether these sales are from those new to the valley vs locals? 


Friends of mine who own small businesses here in the valley, especially restaurants, are worried because they have worked hard to stay open but there is a large disregard for the new rules in a lot of places. If another shut down does occur it will disrupt a huge amount of business here in the valley and trickle down through the distributors and other ancillary organizations that depend on the tourism money, even indirectly. 

Don't forget the largest source of tax revenue for the state comes from the casino taxes. Without those, how can we afford to keep public works projects going? Even with the stadium opening, will they allow for large groups of people to attend events? Concert venues have kept having dates pushed back, with current concerts being pushed back to March of 2021 (after being pushed back to August 2020 originally). I am hoping for the best as well, but I am having a hard time understanding what's keeping Vegas afloat currently. There was another post here on the forums warning about the large numbers of foreclosures that will come this winter/spring 2021. A lot of people who were given some relief from their mortgages came to find out that to get their deferment (assuming they weren't tricked into a forbearance and tasked with coming up with 3 months of payments all at once in July) they have to go through a loan "modification" (AKA refinance). For many who are still unemployed, how will they possibly qualify for a new mortgage when they're on unemployment?

Sorry for the long post, but I just thought I would share what's puzzling me at the moment. The numbers all look great on paper as far as sales figures in the valley, but I want to know what's supporting them. I'm sure I'm missing some information and always looking to learn more.

Post: Found the perfect househack.... BUT

Michael TullyPosted
  • Realtor
  • Las Vegas, NV
  • Posts 37
  • Votes 14

@Mei Ling Schulz

If the deal is that good you can try and pitch it to an investor in your area. They buy the house with cash now (might even be able to get a discount for cash buy) then in 6 months you buy the house from them with your FHA loan. You may be able to work something out.

You may be able to offer cash for keys. If they are the owner’s friends he may not want to make the offer but if he will let you talk to them maybe you can offer them some money ($5000?) in exchange for walking out of the lease? Maybe sit down with them individually and find out what it would take to get them to move. May be tough since they are paying such low rent, but nobody loves moving in the winter and if the current owner is selling the property it’s likely the new owner will raise the rents come December anyway (depending on your local rent raising laws). Better to take the cash and find a new place now when it’s warm outside.

Another option would be to work out some kind of option contract with the owner? You pay him to sell you the house in 6 months? Monthly payment in exchange for the option to buy in December? Does the owner need to sell the house/cash out now?

Or maybe just wait it out. You say it’s been on the market for a long time, maybe it’ll stay on the market until then.

Post: 130k to BRRRR Where would you invest?

Michael TullyPosted
  • Realtor
  • Las Vegas, NV
  • Posts 37
  • Votes 14

@Courtney M.

Good luck to you in your investing future!

The hard part with Vegas is that you really need to know your area. @Terry Lao is arguably THE expert when it comes to multi’s in Vegas and his expertise and success prove that. I’m sure you’ve seen his posts in your time lurking (fellow long time lurker here as well). I have a friend who maintains a 0% occupancy in his multis on the Far East side of town (he niched down hard and rents to Hispanic families who may not have the easiest time getting into apartments) and has never had nonpayment issues. It helps that Spanish is his native tongue and connects with his tenant base.

As far as investing in Vegas goes, if you can become an expert in an area/niche you can do well here. You can use your knowledge to minimize risk. Vegas is just tough because the multifamily options are limited. Some areas I’ve looked into are larger SQFT duplexes near downtown (2/1s and 2/2s) that you can add a third bedroom to. If you can find some they’re usually near blocks where flippers are active and “in the path of progress”. Most have tenants in place already with lower rents. The delta isn’t huge but with the extra room and a coat of paint you could get up to the low 700’s (currently in the $500 range). A lot of the appreciation has already been built in to the properties from the downtown revitalization but finding ways to add value in some of these less desirable areas and holding for a year or two could be a winning combination.

At least on the properties I’ve been looking at FWIW.

Post: Can't Live in My "Primary Residence"

Michael TullyPosted
  • Realtor
  • Las Vegas, NV
  • Posts 37
  • Votes 14

@Andrew Boerum Have you been in contact with any lenders? Ask about an 80/10/10 loan. Depending on your finances/credit/etc you may be able to get a little more creative with the financing and only put down 10%. 

Like others have said, you cannot qualify for owner-occupant loans in this situation. I'm sure we all know some people who have gotten away with it, but mortgage fraud is no joke. It's not worth the risk IMO. Better to do it the right way.

Post: Rehabbing double wides in Vegas

Michael TullyPosted
  • Realtor
  • Las Vegas, NV
  • Posts 37
  • Votes 14

@Dale Zanker Using the county OpenWeb site can be a real time saver here. In addition to looking at the parcel information on the County Assessor's site, this site can be used to quickly look at addresses/locations to check if the land is divided up or owned by the mobile home park. http://maps.clarkcountynv.gov/ow/?@748245,26744002,6

That link will take you to the site, and should open with a mobile home park right in the middle of your screen. You can click on the park and it'll show you some information. Type in an address and check another and so on. I am quite good at doing research and finding owners/leins for houses here in the Las Vegas Valley. If you need help just let me know! As well I can help you run the numbers and find comps. 

@Kyle Calica Las Vegas local here - I think as long as you're prepared to have months with ZERO occupancy then go for it! As previously mentioned, AirBNB can be tricky in Las Vegas. AirBNBs are actually illegal unless they are in Las Vegas, North Las Vegas, or Henderson. Most of what you think of as "Las Vegas" (including the strip and areas around the University) are actually unincorporated Clark County and do not allow AirBNBs. However, many people still have them and every once in a while the county sends out fines and notices to stop. The fines can be HUGE and ultimately are not worth the hassle. Look up the city limits on a map and you'll see the areas you can AirBNB out of. 

AirBNBs in las Vegas don't have a high occupancy percentage (aside from niche executive rentals/party houses) and with the city needing tourists more than ever, I wouldn't be surprised to see hotels giving great deals on rooms. A few in town already are advertising ZERO Resort Fees and Free Parking to attract visitors. That will be your competition. 

I think a better route would be to buy something near the university and rent out rooms to college students. Long term rentals in Vegas (30+ day stays) are much easier to do than STR.