All Forum Posts by: Matt Keller

@Dezra Robitsonwhat areas of Columbus are you looking in? I am new to Real Estate Investing too but I live in Columbus and may have some advice on areas at least.

How are you finding deals or foreclosures?

1 Vote

Originally posted by @Bradley Spencer:

Hey Phillip, what do you do down at the code office? Im familiar with court house do to foreclosures but havent heard of the code office approach before.

Did you ever hear and answer from @Philip Cutting

I get that MLS is probably not the best place to find deals but being new I dont know where else to look.

To everyone else - is there a blog or guide or SOME direction on some other avenues for finding deals? Saying "code office, court house" means nothing to me. I need more background on those strategies or perhaps some helpful links to do some reading of my own.

Thanks in advance!

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Originally posted by @Paul Spangler:

If you haven't spoken to a mortgage broker I would do that asap. They can give you a quote on a property that will include PMI, taxes, hazard insurance, etc. It will tell you how much you will need to put down and what you should expect your payment to be. Nothing is final until you have an offer accepted though. You should get pre-approved before you really start looking, that way you know what your price range is.

That is where my numbers are from above and I've gone through all the pre-approval and such. I'm more concerned right now with being able to see properties and evaluate them myself to see if they are worth looking at any further - thus I need to be able to properly estimate the payments.

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Originally posted by @Belinda R.:

I came up with $1791/mo on a $315k loan, amortized over 30 years. Factoring in PMI at .52, I came to $1922/mo. Click on the spreadsheet to get his exact estimate for property taxes, insurance etc. In the spreadsheet, he's allocated $363/mo in management fees. If your living in the property (which you should since its an FHA loan) and managing the property yourself, you could eliminate the mgt fee to cover the difference. Also his ex. is for a unit in MN. The property taxes rate, insurance rate etc could be much lower in that state vs Ohio.

on a 315k FHA Loan:

FHA – 4% Interest Rate (without PMI)

Down Payment 3.5% – $110250
Mortgage Insurance – $0 (Monthly)
Taxes – $240 (Monthly) – Estimate per the spreadsheet
Hazard Insurance – $100 (Monthly) – Estimate per the spreadsheet
Principal & Interest – $1451(Monthly @4%)
Total Monthly Payment – $1791

FHA – 4% Interest Rate (with PMI using .52 factor)

Down Payment 3.5% – $110250
Mortgage Insurance – $131 (Monthly)
Taxes – $240 (Monthly) – Estimate per the spreadsheet
Hazard Insurance – $100 (Monthly) – Estimate per the spreadsheet
Principal & Interest – $1451(Monthly @ 4%)
Total Monthly Payment – $1922

It's been a while since I've done mortgages so maybe someone else can come closer to the $1600/mo estimate. I could be missing something.

This is super helpful, thank you.

I've definitely been trying to build sort of a crude monthly payment calculator includes all these different items but I can't seem to hit Brandon's numbers.

I guess I need to google around some more and see how PMI and Mortgage monthly payments are calculated...

1 Vote

Originally posted by @Philip Cutting:

YES! NO! Wait a moment! Where are you getting your leads?

Your deal sounds like a typical loopnet or Mls deal.

Right now the only value is multi units in Columbus are direct from the seller or when there is distress. Both situations don't sound like a home you want to live in. Except the part that you have time on your side so maybe you could find a run down property and or motivated want to be x-landlord.

I would think networking and court house or code office. Just saying.

Take @Bradley Spencer out for a coffee or maybe a beer if you can. I know when I'm back in town I plan to :). Vic and Italian villages were overpriced in 2011. You missed that boat but of you see a deal you better have everything lined up. Sellers there know it. But that doesn't mean you don't try. Just be ready to execute if that's what you want.

My fealing is that you need to keep digging. Consider a double. Look at other areas. But in Columbus 4 plex properties are candy now. I would try not to be a motivated buyer.

Anyways. We could go on but it sounds like you just started looking. I wish you luck my friend!

Ps. Sorry for the grammar and spelling. This is from my iPhone.

You would be correct that I am just starting out - that is partly why I'm so confused. I read the blog and just thought wow how are my mortgage/monthly payment estimates so high? It sounds like my estimates are fairly correct no? I mean really that was my main concern - I don't want to be estimating things so high that I'm locking myself out of potential deals that make sense. Do you find that my numbers are at least close because Brandon's example just doesn't seem realistic?

As far as where I'm looking - of course I'm using MLS etc. Being so new its all I know. Perhaps someone can link me to a blog or post or somewhere so I can find out more information about the code office and how to execute a strategy like that? I'm still getting my feet wet with everything so networking is in the pipeline so to speak but not something I'm actively doing at the moment outside of the people I meet and speak with here on BP.

And yes, I'm looking at all residential multifamily properties right now, duplex/triplex/quadplex. I definitely am limited by the fact that we want to live at the place so the areas are far more limited around Columbus than it would be for other investors.

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Originally posted by @Matt Overbee:

@Matt Keller Looking at the picture of the analyzer in the blog post, it looks like Brandon left out the PMI cost ($298/month) as part of the monthly cost estimates in his article. Also the property taxes for his example were less than 1/2 of what you listed, $240/month vs $580/month. Which may be accurate for the area he was using compared to yours.

So it would appear you are doing just fine, because you realized the property you are looking at isn't a good investment. :)

I'd hate to call Brandon's blog post bad/inaccurate then but I'm not left with much else to conclude (keep in mind I have really liked a lot of his blog posts)

Even leaving out PMI & accounting for differences in taxes, I'm still not particularly close in estimates. Using your numbers, 298 + 580 - 240 = 638 and 2539-638 = 1900 which is still higher than Brandon's target of 1600 PLUS his example was using a 300k loan and my example is 275k so......

I still feel like I've gone terribly terribly wrong here. Or the blog post was just entirely incorrect information.

Thank you everyone for your responses!

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So I came across this blog post and when I saw the first example for a Multifamily unit, I frowned thinking I had gone wrong somewhere.

Let me preface this by saying I'm completely new but I just don't see how a 300k mortgage can be paid with 1600$ when including taxes, PMI and insurance. Help me see the light!?

Perhaps I need more guidance on how to properly assess these costs but I've spent maybe 6-7 weeks now (a lot on BP), educating myself when I have time, so I can position myself for my first real estate purchase. I've spoken with several lenders about going the FHA route to purchase a multifamily unit and have excellent credit.

The estimated mortgage payment I came back with on a 275k FHA Loan…

FHA – 3.5% Interest Rate

Down Payment 3.5% – $9625
Mortgage Insurance – $298.55 (Monthly)
Taxes – $580.00 (Monthly) – Estimate
Hazard Insurance – $150.00 (Monthly) – Estimate
Principal & Interest – $1511.06 (Monthly)
Total Monthly Payment – $2539.61

So…. where am I going wrong here? It can’t be taxes since even if we eliminated taxes from my real world example I can’t even come close to Brandon’s 1600$ target for a 300k mortgage.

Perhaps this isn't the best place to ask but clearly I need help. Maybe my problem is simply in the estimates I’m using/being provided or perhaps its all the lenders I’ve spoken to? I just don’t get it….

I can find a way make a good real estate investment for a multifamily home with a 1600$ mortgage, insurance & PMI expense. I can't do it (at least in my area) for 2600$

Help!?

0 Votes

All Forum Posts by: Matt Keller

Matt Keller has started 1 posts and replied 7 times.

Post: No more talking, time for action

Post: Trying to buy first multifamily but seems impossible....

Post: Trying to buy first multifamily but seems impossible....

Post: Trying to buy first multifamily but seems impossible....

Post: Trying to buy first multifamily but seems impossible....

Post: Trying to buy first multifamily but seems impossible....

Post: Trying to buy first multifamily but seems impossible....