All Forum Posts by: Shayne Fee

https://www.biggerpockets.com/renewsblog/2010/06/3...

This post is better and more succinct than anything I've read in a book on the specific topic of analyzing multi family. 

As for books -- my favorites are millionaire real estate investor by Gary Keller and multi family millions by Dave lindahl. 

But if I were you I would spend as much time as possible looking at deals in the specific markets you're interested in. Many of the rules of thumb and other ways investors typically analyze deals don't apply as well here in Southern CA. 

You need to know as accurately as possible what the market will bear for each unit and what a great price really is. I would definitely suggest leveraging the knowledge of a good realtor if this is your first deal...get out and talk to people at open houses. Listen to the podcasts here on BP and hang out in the multi family forums! 

Email or message me if I can be of any assistance! Happy to help :-)

we're including single family homes right?

$4500 on a 2400 sf 5 bed/3bath in Costa Mesa, CA :-)

@John S.

Rates are way up! I'm locked at 3.25 on a 30 year fixed and plan to keep this home for a long time. I'm one or two good comps away from being able to remove the PMI without the hassle or added expense of a refi...

@James Wilder

I have done exactly what you are thinking about doing a few times in the last few years. 

If you buy now you need to find a deal under market with value add opportunity. IF you can do that then the positives of buying now outweigh the potential negatives. 

Know that worst case scenario you will have to stay in that duplex and make those payments if you are not able to improve it and refi, sell, or rent for acceptable cash flow. 

Good luck and feel free to reach out if you have any questions!

@Albert Bui

Overlays as far as I understand them are to make Fannie or Freddie guidelines stricter or more conservative... not looser as would be the case here. If the Fannie guideline says I have to get to 75% to remove the PMI how could a lender sell their loan to them and allow me to remove PMI at 80% -- less equity in home than Fannie allows for?

@Albert Bui There's a link in the 2nd post on this thread from @Chris Mason spelling out the fannie mae guideline and why it is 75%...While I wish you were right and I only had to get to 80% I think it's pretty clear...If you still think it's 80 for some reason I would love to know how I can make this happen...Thanks!

@Chris Mason

You're so right about that! Driving me nuts right now. This is a lender I have worked with for years and done dozens of loans with (clients and personally). I find it very hard to believe he didn't know this guideline. I'm at 3.25 on a 30 year fixed so there's no way I am refi-ing...Just got to wait it out I suppose...Thanks again for your insights!

@Lisa Lincoln I think the 78% rule is for a different circumstance than mine. @Chris Mason or @Wayne Brooks probably know better than me!

For me it's not about price. Just not interested in C- (or maybe D) type properties and tenants. I think you can easily beat these numbers in much safer, stable markets and not have the headaches you will with this type of property and tenant profile. 

If you're not going to manage the property yourself anyway why does it need to be local? You can have a property management company take care of your property in any market. There are many that beat these numbers with less tenant risk...do some more digging would be my advice...good luck!