All Forum Posts by: Nilay Engin

 I wanted to thank you on this advice. I did follow it and the seller and I agreed on correcting 26 out of these 27 items. The proof of correction was not always available and I insisted to a certain degree. We even had a legally binding addendum for after closing. I think it worked out. I did hire the rehabber as the property manager right after. They were recommended and I thought they'd know the 
I even did one more deal after this one. The inspection report looked pretty good, so I did not have many demands. 
I am learning how to be more adamant on requests and that little "drama" is for the good of the property. 

 Bob, 

I am wondering two things: Don't you consider appliance warranty and tax write-off options to erase these worries away?

Before my recent two turnkeys, I converted my home to a rental upon moving out to buy another. We managed that house ourselves and always kept a home appliance warranty. When an appliance broke, it covers it. We just got a dishwasher completely replaced through this process. And unfortunately, I lapsed on the warranty to change the rate for one month and water heater broke. I had to pay $2000 for it. But eventually similar to your $7200 AC, these will be tax write-offs. They will be reduced from your taxable rent and you are renovating your house for free at the end as long as you can come up with the repair money immediately. 

For the turnkeys, I did not have an appliance warranty because there is a property manager. Still may mean to come up with the money for a new dishwasher or an AC. Yet, again the tax write-off will take care of it at the end of the year. 

Due to this as long as I have some immediately accessible repair money set aside, I don't worry much. Am I too off base in this thought process? 

My first real deals from scratch are turnkeys. Having 2-3 W2s, I can't imagine doing a BRRR. Had I learned more about real estate when I was younger I would have bought and improved and rented to buy another every two years.
However, I did that only once and now I am at my most ideal house for the location I am living. Till I move to another town, I don't see myself moving out of the house I live in. 

Also the houses in my area were way too expensive for my liking. So, I found refuge in the turnkey option in the still-affordable states. I did look at the inspection reports very closely and asked a lot of questions. Never went to visit the locations, though. They were very far from me. 

However, both had renters in them. This can mean two things. You know the rent rate readily. You don't have to go through the hassle of waiting for a renter after the purchase. Now, I like that. This way I could calculate the cashflow immediately without speculation. One downside can be you don't know how the renter was selected. I took tht risk over not having a renter at all and not knowing how much it will rent for. 
One mitigation to these if that some sellers will give you a one to three month rent guarantee as well as six to twelve month rehab warranty. You can seek for these when you are doing the turnkey. On the first house I spotted 27 improvements through the inspection and I had the seller to agree to remediate 26 of them. 
Too soon for me to evaluate the cashflow, but there is no way I will find a better, cheaper, ready to move in property other than a turnkey. I don't like to work with partners. As long as you find a reliable source for turkeys and do due diligence, turnkey is a good way to go both for cashflow and appreciation values. 

and I was able to complete two back to back deals. from 0 to 2 in about 3 months. Works out well if you have the down payment figured out. For some reason I was under the impression that lenders won't lend in such a short amount of time of completing closures. Though it doesn't make sense as I know some people close on many deals all at the same time. 
Now looking forward doing capital replenishment with the accelerated cashlow from these properties for the next onw in 6-9 months.

Analyzing PA, AL, OH properties currently. 

10% down no MI??? Sounds like a dream. My previous lenders kept squeezing me for 25% down which I never did before, but this time. Would love a 10%. I avoided some TN properties that I was interested in due to not being able to come up with the 25% down in that area. 

Thank you all! I got a huge encouragement and decided to accelerate my next deal with the reassurance I gained from all of these responses. 

Currently analyzing the inventory lists I got and started my funding sourcing. 

My credit score drops every time I buy a house, so I wondered if the lenders shy away from you. My pre-approval price point was not very high to begin with, but works with the markets I'm looking at. Guess as long as I prove that I come up with the down payment right away, it won't be an issue because the last deal actually improved my cashflow ongoing. 

 I actually asked while on the phone today discussing today's closing. And they said most docs will be good for another 120 days and they can turn it over and continue to work with me. 
The only question is if I will find a property in the areas they are serving. (My previous lender is in CA and he could not work with me for a OH property...)
Looks like 1) I will find a deal I like and see if the same lender can come in 2) apply for some business credit to accelerate down payment obtainment because I don't have the cash for 25% down immediately right now and trying to accelerate this. 

Thank you. It is leased. The tenant agreement was already fulfilled and the tenant moved in before the closing. My DTI will be the same range with a slight improvement immediately. Sounds like I am in good shape to go at it again as long as I could gather another 25% down...

I need to understand this DSCR deal... I have never heard it being mentioned before.
My DTI did not change - in fact will be improving with the last purchase as long as I have renter. My risk is increasing, but my DTI is still in the same range.