All Forum Posts by: Daniel Mulberry

I've been playing fantasy league real estate investing as a way of understanding a market that I may enter soon.  I've assembled a worksheet to analyze deals. (I think some of this came from another BP user several years ago, but I don't recall as I started putting this together a long time ago and only recently came back to it, so if this looks familiar let me know and I'll give you credit).  

Right now, I've been putting in data from Zillow and Trulia based on recent sales and current listings.  Obviously when it comes time to jump in, I'll have to update with actual numbers, particularly as some of these would require commercial loans.

I'd be grateful for any feedback on how I've assembled the spreadsheet in terms of things I may be missing, over or under estimating, etc.  From what I've put together here, this looks like a really good market.  It's a small city near a large city and I am primarily looking in a student neighborhood by a medium sized public university, which I like for knowing that there will always be renters.  If this analysis sheet works, I'll consider some other areas before settling on one to jump in to.

Worksheet Template Here

Thanks!

 Thanks for this.  I'll look through that link and try to get a better handle on options.  I was committed to a certain strategy for so long that I haven't though through other options so thoroughly.

The non-resident issue is one that shouldn't have surprised me.  We had a similar issue with a brokerage a couple of years ago and had to close some accounts with them.  I can't say that I know the details, but I take it that there are money-laundering concerns, our brokerage issue came around the same time that FACTA/F-Bar started being a bigger issue for our international banking as well.  I guess you must have similar issues in Hong Kong.

@Steven Dreyer

Thanks for this.  I'll start exploring local banks and see what I come up with.

Hi

What is the best bet for an overseas investor wanting to take a mortgage for rental property in the US?  

(To be clear, I am a US Citizen.  I currently own a home in USA with a nearly paid off mortgage from a Credit Union.)  

I would like to start buying SFH or small Multi-family properties for cashflow investment. I should have realized this earlier, but my CU just informed me that they cannot underwrite an investment loan if I am not in-residence. They also checked with affiliate lenders and Fannie/Freddie who said the same thing.

I could do an all cash purchase fairly easily, but the cash on cash return gets so low at that point to be less attractive.  Not to mention that it would be then end of my ability to invest for a while as opposed to being able to assemble a small portfolio with leverage.  

What do people in this situation normally do for lenders?  I'm sure there are options, but honestly not quite sure where to look.

Thanks!

Hi all,

I'm looking for somebody with experience in Jackson, MI particularly with multi-unit rentals.  If anybody here in the A2 group would be willing to exchange some brief messages or to connect me with someone, I'd appreciate it.

Thanks!

 Thanks for the replies Lane Kawaoka!

That eviction rate seems high to me, but I actually had an ugly eviction situation in my very first time renting my primary residence, so maybe not.  

My previous question was about scalability.  With 10 TK units, I can see that you get a lower return per door.  But is there any reason you'd have more eviction and big events with TK rather than another way?  I'm working overseas now, so no matter how I source a property, I'm going to have to handle maintenance and management through a PM.  So I'm wondering if there is any reason that TK is less scalable than self-sourcing (or asking my PM to source and handle rehab).  Obviously there is a reduced margin for all the fees going to PM, less ability to find great deals with my own eyes, then with TK additional loss for the work of the TK provider.  OTOH, as a relative novice, there is added security in knowing that so much of the initial work has already been handled.  

So buying Turnkey will cost a few percentage at initial acquisition (I may be off on the magnitude of that).  Following that, it looks like the same cost structure as managing a self-sourced property remotely through PM.  For scaling, I would think that as time passes and more properties enter the portfolio, the impact of that initial marginal loss to the TK provider would actually dilute.  

Does that sound right? I take your point on all that work for $3000 not being worth it. This is the main factor that has kept me out of REI up to now.

Apologies if this is obvious, I'm just starting to explore TK.  Why is it that this model isn't scalable exactly?  Does it make more sense for an out of state investor were to purchase TK all in the same market and consolidate management with a single provider?

Thanks!

@Brandon Turner - Thanks for the tip!

@George P. - Any thoughts on other areas around SE Michigan that are better for rental investment?

@Walt Payne - Thank you for the advice. I am looking in an area that I know reasonably well. It is suburban Detroit and my wife grew up there. Most of her family and a number of friends are still in the area so we can definitely get on the ground help when needed. Plus our primary residence is about 30 minutes away, currently occupied by a friend who pays cost. One of our guiding principles is that we won't buy a house somewhere that we wouldn't actually live, so the war zones are out (and there are plenty in the greater Detroit area).

We are not looking for miracle returns. I want to establish an income stream to provide a supplement in case my next posting isn't as lucrative as this one. If things go well, I could see this as a source of retirement income. But in general I am taking a moderately conservative approach and happy to pay a little extra to ensure quality service.

Maybe there aren't patterns ,but would you say that the companies that combine all of these services tend to be solid? Dangerous? Or is it case by case?

@Lauren Lee - Thanks for the note. Best of luck to you and have fun in the Emirates!

I am starting to lay ground work for buying an investment property sometime in the next six months. I work out of country and am in the US for only about 30 days throughout the year and that is either for holidays or for work trips.

How much of the financing and closing will be possible from abroad? I have purchased a home previously as primary residence and I remember that much of it required physical presence at the bank.

For what it's worth, I don't foresee any trouble with loan approval. I have enough cash on hand for a down payment and my annual income is stable at about three times the loan amount I will be asking for. I have a very strong credit history. I haven't started the process of pre-approval yet because I want some more pieces in place first so that I don't have to redo it later.

Thanks for your thoughts.