All Forum Posts by: Ronald Allen Barney

Some property managers I work with, I refer them there for free, and if they don't work out there I just send them to apartments.com.

See if you can find a local investor who can act as a mentor and let you shadow him through the process of what all he does--due diligence, investment math, contract-to-close, ins and outs and pitfalls, etc.  To earn that hands-on learning offer to do some of the work that would be more tedious to that investor but can also help you learn in the process, such as drafting an offer letter, initial cleaning of the property, etc.

When it comes time that you'll have the cash and debt (and credit rating) position for your own first investment, you'll also have a solid foundation of learning.  That investor you work with might also send some deals your way.

Find a fourplex if you can get it. In FHA you can count the potential rental income as your own income for qualifying for the loan. If you can't find a fourplex go triplex, and as a last resort duplex. The importance of finding a fourplex is that 1 year after buying the fourplex you can still use FHA and go to a triplex, then a year later duplex, and then every year after that go conventional for a new SFH (each to rent out a year later). Youtube search "lumberjack landlord 4-3-2-1 house purchase strategy".

The realtor who advised against "living with renters", fire him.

Some sort of reliable boots on the ground to report on things like regional quirks and gotchas, such as MLS data quality issues, war zone neighborhoods, obscure gotcha local tenant laws, environment/climate issues, general market issues, particular quirks in how paperwork is done in contract-to-close, etc. It "can be" a realtor but could also be an investor or wholesaler, or a really smart PM or Contractor.

You left out whether you went all cash here or if you got a mortgage.  3.5% on an all cash deal, well... 401k yields in 2020 averaged 7% and don't require you to unclog toilets in the middle of the night.  Had it been a leveraged acquisition your cash on cash return would be significantly more than 3.5%.

Shop around with other lenders or mortgage brokers.  If a guy with similar stats got 350k there's got to be a way to get that for you, assuming there isn't something significantly different with him income-wise or his cash on hand.

Also for MFH up to 4 units you can count the potential rent as income with FHA and probably VA as well (not 100% sure on the VA side). Come to think of it try FHA and see if you can get a better financing deal.

It could be any number of things. A lot of buyers have been finding out the hard way the banks aren't going to lend to them at $70k over asking price like they thought. That would explain a lot of them out there bouncing back into the MLS. Flood insurance and taxes, just factor that into your investment math, get a CONTRACTOR walk-thru for any gotchas. Let the due diligence and the math take the place of analysis paralysis, buy or move on, based on the numbers.

I'm dual-career so that I won't have to depend on commission to survive, but I do leg work for contracted clients weekday evenings and time block 2 hours each Saturday and Sunday for what I call "capital investment work" finding deals on and off market.  

In my area on-market there are some SFH with good investment potential but they require rehab, which is a more sophisticated play than what investors usually want to mess with for the SFH space. Off-market I just don't have the lead network yet to score good off-market cash-flowers, but working on that. When I see jumps in crime statistics that tickles my radar for "chasing ambulances" there to see if anyone's ready to move.

MFH in this MLS region is a complete disaster. None of the listing agents know what they're doing entering their listings and they end up putting single unit condos and townhomes in as MFH ("derp derp cuz the building's multi-unit right?") After a come to Muhammed meeting with my broker I've found what I'll really have to do is shift into the commercial space to get in on the network where MFH leads get passed around almost like passwords through prohibition era speakeasies. "Pssssssst, I got an 8 unit, let me in!"

I don't have local location expertise but there are a few investment principles to keep in mind since this will serve as a possible future rental:  for the location of any candidate properties check the rental comps of that property, paying even more attention to that than the purchase comps.  If the monthly rental potential is at least 1% of the listed price, it's worth looking into further.  Other estimates of numbers will take some finesse, such as estimating expenses, but you can calculate a reasonably accurate guess of cash on cash return for the property, going by closing costs and rehab budget as the cash investment "bottom" of the cash on cash ratio, and 12 months cash flow at the "top".  If potential cash on cash return is past 10% it can be a good investment.

Check first that your mortgage is assignable.  If so then you can play whatever "sell to yourself" games you want.