All Forum Posts by: Nate Bell

@Sebastian Guzman

See if you can get a job working construction and learn about the guts of a house. And don’t go to college just because it’s a free ride. There’s an opportunity cost to consider- that’s four years you’ll tie up. I’d advocate for taking 1 or 2 gap years and figuring out how the world works before you either waste the 4 years or the GI ride on something you won’t ultimately care about.

@Daniel Goldfinger

Not sure how you identified Cleveland in the first place, but there are reasons the population is declining. As others have said, when you’re scoping out investments, also visit neighborhoods you might live in. I lived in Lakewood and Cuyahoga Heights- decent by Cleveland standards. If you enjoy wilderness and the mountains, you might struggle in Cleveland.

How are folks setting up internet access in new multifamily construction these days? I’m doing a mixed use project and converting the upper level to 8 apartments. Should each of these apartments have their own internet account/hookup, or should I have one WiFi account shared in the building and they achieve security through a VPN? There is really fast, 1 gig internet available.

@EJ Horstman

I just sold my condo in a destination town because I was having awful experiences with the HOA. Wouldn't you like to get out of the condo business and into something that entirely under your control?

For that reason, I’d sell so your CA options aren’t limited to condos.

@Sophia Berry

Also known as “builders risk” insurance

@Sophia Berry

There are policies called “course of construction” policies. They’ll protect you against injuries, vandalism, fires, etc.

It’s for reasons like this that I just buy all my insurance through a single agent. I don’t shop around and try to save $10 here and there. I send my guy an email, he offers everything, and it’s done same day in most cases.

@Robert Paquette

It’s possible. Look for properties that beat the 1% rule and you’ll have the answer. I’m entering into a deal on a 17 unit apartment building using OPM and true cash flow to me, after generously accounting for cap ex and vacancy, will be a few hundred/mo. This is an $800K property in good condition, fully occupied, financed with two lenders at 4.5%.

I’m not gonna retire on the current cash flow, but I eventually will on the equity.

My experience is that this is the cheapest money you're ever going to borrow for rehab funds, outside of maybe friends/family. I've done it twice, and the loans do take a little longer to close, but in both cases the houses were too bad for conventional financing, so there was no real competition. So, I wouldn't put much weight on an agent's perspective- they just want a quick close so they can move on to something else. Also, I only had to get one quote for both of mine, not three, so really, this is no different than any other rehab project you would encounter. You do all the proper work on the front end, your project is fully scoped out, and then there's really not any more work than a typical project for you or the contractor. The hassle is way overblown IMO. In fact, I'd argue that a 203K like a good set of training wheels for first time rehabber -  the banks will make you pick a competent contractor and fully scope the project from the start, so you'll learn how to do these right. Two bits of advice would be to find a contractor who has done some form of construction loan before, because they will have to carry some costs between draws, and you should have ~10-15% in cash reserves so that you can just pay for changes out of pocket and not go through the bank's tedious change order process. 

Good luck!

@Syed Shah

In my own houses and in new builds or big remodels I go with a GE package from HD. They tend to have a better offering at the lower end of the cost spectrum and they’ve been relatively trouble free for me. The microwaves had issues for a couple years, but I think they’ve resolved that problem. They’re newest stainless finish is way better than the last iteration.

@Akhil Nagapuri

You heard from one person, made up your mind, and changed your course?

I’ve done a couple of these loans and I think they’re a great tool for getting started. Yes, they’re more work, but there’s a reward for that.