All Forum Posts by: Jared Reutter

We had the seller pay all closing costs, so all we hand to do was come out of pocket for the down payment. 

The process was a giant pain, but to have an essentially brand new triplex with 90k of equity for $15,500 out of pocket, was definitely worth it.

As far as you doing the work and him signing it off, jeopardizes his license and the terms of the loan.

Why not buy a duplex? Then you get have the best of both worlds. They will pay over half the mortgage and you can live in your own property while saving money to put towards the next investment.

Personally when I have bought occupied properties I ask the selling agent to speak with the sellers to see if it's ok with them. Just because you are under contract doesn't give you permission to speak with the tenants. However I have had no issues with the seller allowing me to give notices of changing ownership and such close to closing.

I have just finished a 203k loan on a triplex (242k purchase price 180k in renovations) It was a pain in the butt and took a long time to complete but it was well worth it. We did a full 203k loan, it took us 6months to close on the house due to sellers and the red tape that had to be navigated for the loan. Then another 3.5 in renovations. The long version is for another time. I would recommend doing a 203k streamline loan. It has a cap of 35k and doesn't have near as much red tape. To start off you need to get a 203k hud consultant to do a minimum property standards inspection. As far as a full 203k you are not allowed to do any of the work yourself, your contractors have to be licensed, bonded and insured. All their information needs to be submitted to the hud consultant and to the bank. Once you have your final rehab number you are going to have to submit a detailed scope of work to the hud consultant and the bank. The bank is going to look at the work that is going to be completed and then require a percentage over the estimate for a contingency fund. If you have money left over at the end you are allowed to submit a change order requesting the remaining funds be used for something else. During the renovation when a percentage of the work is completed you will have the hud consultant come out and evaluate a portion of the work was completed. After the inspection you submit to him how much you want to be reimbursed for, that will go to the bank and the bank will cut you and the contractor a check (third party check). The bank holds back 10% from every draw until the final inspection then all funds are released. I hope this sheds some light on the 203k. If you have any specific questions I'd be more than happy to answer them

Personally when I am looking at properties I don't care what the current rents are. Depending on the property I like them below market rent because it devalues the building a little and keeps other investors away. I will run my numbers on the average rent in the area for the condition the property seems to be in. I do not want to bug an agent to get current numbers on 25houses, when I narrow my search down then I will have him reach out and get more specifics. As far as utilities you can call the companies up and at least in my area they will give the yearly average, the high and the low. Doing this your numbers will be more accurate and you don't have chance of the seller skewing them.

Ron I think having internal entrances has its ups and downs. It is more of a hassle to keep clean, maintain, and A little more expense in utilities. But I believe in Alaska it has a big perk in the winter time when tenants want to do laundry, they do not have to get bundled up when it's -35 outside to walk around the building, and it adds as a second layer of security for them if someone were to try and break into the building.

As far as when a tenant moves out and changing locks there is a simple solution, get key pads. I have recently been changing all of my units to keypads and the tenants love it! No need to change locks, it's just a simple switch of a code. And it helps prevent those unwanted 2am lock out calls.

I am trying to determine a finders fee amout. I've read post where people say $500-$1,000 but that seems to be for single family houses and for the finder to just find the deal, not broker it per say.

The deal.

It is a 32 unit apartment complex 3 buildings. Low occupancy, needs fixing up.

I have gotten the current owners to agree to owner financing, $300k 10% down and 3% interest with a 30 year amortization. They want a balloon payment at 7 years but trying to get it to 10 years to give the buyer time to get the units fixed up and rented and time to get the loan paid down.

I originally started looking at the deal for myself but the capital needed for improvements is a huge issue for me, also I live quite a far distance away so that runs into an issue with the rehab and looking after them. 

I'm just trying to determine what would be a fair amount for a finders fee. Realtor fees are 6%, would that be fair? Or would it be a little more since terms are more favorable than a commercial lender(lower interest rate and lower down payment). Or is that asking to much?I have not set up a deal before so I thought I would get the opinion of people from here.

Jared

Thanks for your response Jeremiah. It's good to hear from some one who has bought a 4 plex in the local area. When you say you wish you would have went cheaper, do you mean it as a smaller property? And if so why?

I am wanting to use the VA loan because with it I won't have to pay PMI thus saving me about $350 every month. I am not expecting to make any cash flow until I move out (2 years for a va loan). But I am expecting to save on not having to pay rent. What I plan on is saving what I would normally pay in rent for the down payment on my next property.

Yes the rent per unit is 1100 for a 2 bed room and 1300 for 3 bed rooms. And with a va loan there is no pmi. For 6% interest I am getting a monthly mortgage payment of $2158. Figuring rent at $1,100 per unit. After mortgage I would have $2,242 for taxes insurance and maintenance.

My name is Jared and I am new to BP. I recently moved to Alaska to fly. I have been wanting to invest in real estate for a while and I am actually at a point where I can seriously consider it. I am wanting to buy a 4plex and live in one unit.

The dilemma I am having is the price, they range from 360k to 500k, and rent is $1,100 to $1,400. I am wanting to use a VA loan and put 0% down. I want to put my money into equity and not pay someone else's mortgage. Flying here also keeps me away for 2 to 2 weeks at a time so i will have a roommate to pocket a little extra cash. What I am thinking is to live in the property for 2 years then move out, and reuse the VA loan to buy another property.

I am just concerned with the price tag for my first investment. It seems like everything I read people at paying in the mid 100,000s. Does anyone have any advice for a first time investor in an expensive area.