All Forum Posts by: Mike R.

The metrics the banks review depends on the type of loan.  Commercial vs residential .  Typically I found that banks look at the appraisal and estimated NI and your credit scores with transaction involving a residential loan.  Commercial loans have greater underwriting oversight, confirm all the figures more thoroughly including sellers tax returns for the property and they want to understand you as an investor. They basically want to ensure that not only the the property cash flow can support the loan but that your financial condition/investment skills can also support the loan 

Don't sweat the banks too much.   If you find a deal and you have good credit they will work with you. If they don't like the look of the deal they will tell you and likely ask for larger down payment   If the bank isn't willing to lend the money and you have good credit then you might want to reconsider the deal.....I am not a believer of hard money loans as an alternative personally so if banks says no I'll walk away

Interest discussion on dscr.   Personally I don't focus on that number, I let the banks do that.   I found that if I found an investment that meets all my criteria and I stick to 25% down the dacr works out such that the banks don't have a problem and I have no less than $200/door net-net income per month.  Net-net income is net operating income less P&I, I.e. The amount of $ left after I pay all bills and expenses including the mortgage 

It depends....I know not that helpful but hear me out

Regional focus 

The Pacific Northwest is experiencingsolid  population growth and that should lead to increasing prices but Seattle area cap rates are not attractive in MHO. Other areas of the country have great cap rates.  South of Chicago (Bradley, monee area ) can see caps that are good but growth prospects are average at best

Valuations

Getting crazy but there are always pockets of value.  For example we're closing on a place with 7.0 cap rate and that is with below market rents and a building in great shape. No work needed !!

Strategy 

Buy and hold approach offers better prospects  given longer term focus but will take longer to find a "deal". A flipper is a tough spot to be in given increasing prices and huge interest in rentals from all the newbies coming to market.  The competition  is only picking up

thank you!

tenant was served multiple notices (3-day, 10-day and 20 day....too much detail to bother with here), eviction papers are filed with court and we were waiting for tenant to be served.  today, we receive email from another tenant in building telling us she believes the problem tenant has moved out.  i will find out later tonight, but if i get there and it is clear they have moved out, can i change the locks even though i do not have "official" notice from the tenant?

anyone know how to search kit sap count WA court records? Need this for tenant screening.  Thank you

do you buy earthquake insurance for your investment properties?  if so, what company do you use?  if not, why not?

attorney: angela michael in silverdale

be patient you will find the deals.  I use redfin.com a lot so it sends me notices.  i have found redfin is much better than Zillow because they typically include the rent and expense numbers and sometimes the cap rate.  though, i always calc the cap rate myself because some listing agents have no idea what they are doing. 

word of advice, don't stretch to find a deal that doesn't fit your objectives.  better to have the cash and no deals, than find deals that cost you all your cash and then some.   

everyone has different risk tolerances and return requirements, but i dont see how a 5% cap rate (or even worse) is something worth buying.  why?  something always breaks, you get a bad tenant (even with good screening), general maintenance, etc. and 5% is a low figure to cover these costs.  another way to think about it is what other investment might earn you 5% or better and what amount of effort does that investment require.  you can invest in Calf muni bonds and get better than 5% return (tax equal yield) and do no work, not answer tenant complaints, screen tenants, etc.  i guess if you expect meaningful price appreciate you can live with 5% and hope nothing eats up your cash flow.  cash flow today, is (IMHO) better than price appreciate tomorrow (especially if you consider you have to SELL/refin in order to get access to the price appreciation) just not a trade i would make personally.