All Forum Posts by: Rhett Kelton

 Thanks Stepanie.  Makes a lot of sense.

Can you let us know what ended up happening with this?  I'm very curious...

I'm moving away from conventional loans and into commercial loans. I think I would like to get a DSCR loan for a couple of BRRRR deals, and wanted some recommendations about who and who not to try.

One of the properties is a SFR with a DADU (making it a little hard to appraise via sales approach in my area). The second is a 5-unit multi-family. (5 separate electric and water meters) Depending on appraisal method (income vs sales), I should be able to pull almost all my cash out at 75% ARV on both properties. The DSCR ratios should also be between 1.25-1.50. Both are full with current leases between 8-14 months. My credit score is 740+. I have 4 other rentals within 2 miles.

Recommendations?

A slightly different take. First of all, the down payment issue is definitely legit. You would want at least 25% down on a deal this size.

Now, I don't think you should try to interpret their reasons for doing something. People are weird.  If it makes sense for your goals, do it. They might be trying to build a portfolio to sell off to auction off to various hedge funds, might be banking on the appreciation, or maybe they see something you don't. Just consider if it's a good deal for you, and meets your long term goals.

I remember listening to a podcast and they were talking about someone overpaying for a house at an auction. The auctioneer ended up asking why the (experienced) buyer purchased it, and the buyer just said that he had to keep his crews busy or else he would lose them.  

Have you looked at all into Manchester/Shelbyville/Rockvale?

Thanks for the advice.  I'll download them!

Good call on 356

I'm getting ready to take a road trip, and wanted some recommendations on your top 5 episodes.  I've listened to a bunch of them, but wouldn't mind listening to past episodes again.  I don't really care what the format is. 

Thoughts?

Good question. I was just talking to my insurance agent about it this morning.

My insurance company won't cover the house if it is certain dog breeds(surprisingly dalmatians are on that list) or if it has bitten a human before. 

I always have a $300 pet fee - non-refundable- that goes along with the security deposit. Additional rent is also typical.  For where some reason, people love their pets and often have trouble finding other places that accept them. Unless you have an extremely hot market where you are extremely selective, why cut out 50% of the applicants?

I don't allow cats. If you do, take a black light around your baseboards when they tenant moves out, as well as check the HVAC vents. Pretty disgusting.  Obviously, the same issue could happen with dogs, I've just seen it more prevalent with cats. After the second time, I stopped allowing cats. For some reason, dog owners tend to be a little more cognizant of the issue. 

I'm in the middle Tennessee market. Nashville has cracked down very hard on STR, so you would need to talk to more specific investors there about possibilities. Without being local, not sure if that's the best place. City regulations are changing very quickly.

If you are thinking Chattanooga - talk to several PMs there. I know the houses can drastically change from street to street. My brother invested there and ended up pulling out his money because some of it was too sketchy. 

The East Tennessee market it sounds like it might be a good place for your goals. Gatlinburg and the surrounding areas. I know prices have risen their drastically(haven't they everywhere!), but I'm sure there's some deals out there.