All Forum Posts by: Shawn L.

 This is the real question

I grew up in Bellingham so I was familiar with Milford, and knew that it has a strong rental market. I started buying there in 2014, mostly on the MLS. I do still have the 4 unit I got off market as well as a couple other places in town. It's worked out pretty well so far, still have the inherited tenants in place about 2.5 years after buying the building, though the units are still a bit under market rent. Because I was able to get a good deal on it, it still makes money and I've already refi'd out the majority of my down payment without doing anything other than having a few roof leaks patched and general maintenance. My PM has been slowly increasing rents and when units turn over I'll do some upgrades and should see a significant increase in rent roll.

I actually just built the list from the assessor's database. In their old system you could sort by building unit count and just go down the list and type in the important data such as property address, owner name and address and build a simple list fairly easily (having multiple large computer displays helps). Now it seems that they've shifted to GIS instead of the patriot properties database, so this would no longer be so simple. I have used listsource in the past as well, and when I decide to do another direct marketing campaign I'll likely go that route or similar.

I picked up a 4-unit in your home town a few years back from a direct mail campaign, which was a mix of professional letters (on letterhead) and post cards. I designed and bought two different style post cards from vistaprint, and wrote and printed all of the letters with my laserjet. Addressing of all envelopes and post cards was simply done with MS Word's mail merge linked to an excel database again on my laserjet. I mailed my list of 1,000 or so owners every 3 weeks from what I recall, for several months. Lots of work but got me a good deal.

From what I've seen these days, lots of cold calling and cold texts.

Your best bet may be to use an FHA for an owner occupied multifamily. Live in one unit, rent out the others while taking advantage of the low down payment.

Private/portfolio lenders have other hurdles, generally speaking if you can get a conforming (i.e. fannie/freddie) loan the terms are likely to be better. You can look at those options once you have some deals under your belt.

FHA would require you to occupy the property for some period of time (probably 12 months) barring extenuating circumstances that force you to move before that. You can use FHA on up to 4 unit properties, perhaps you can look into that?

Only way you're likely to get lower than 20-25% down payment on an investment loan is with a private or portfolio lender (probably only realistic if you have a killer deal), or maybe a rich uncle or something. Anything under 20% down is probably going to be very difficult to find.

Went into effect April 1, was in the news prior to that. The number of notes backed by investment or second home loans that Fannie/Freddie are permitted to purchase was reduced (significantly I believe) so both rates and fees on these loans went up on anything that locked in on/after April 1.

Looks too broken up for any kind of topping to work, you'd end up with a bunch of sympathy cracking pretty quickly.

This guy has the right idea. Summed up perfectly in the final paragraph.

One thing to note is that whatever you end up doing, make sure you're compliant with your local/state laws. Some states (like MA for example) don't let you do things like offer discounts for on-time payments and late fees cannot be charged until rent is 30 days late. You don't indicate where you're located so I thought it was worth mentioning. Also if not TAW you'll have to honor whatever the late payment process is in the existing agreement (assuming they're enforceable in your state of course) until the lease term is up.

In addition to the comments noted above by @Joe Splitrock, it's important to note that as of April 1 there were changes that significantly reduced the number of loans secured by second homes and investment property that Fannie/Freddie is permitted to purchase. This has affected rates, fees and LTV. Anyone quoting terms that were locked in prior to April 1, if its on a non-owner occupied purchase those terms are out of date. I closed a conforming 30-year cash-out refi on a 4-unit about a month ago at 3-5/8% and last week I was quoted 4.5%, 75% LTV for a purchase of a duplex from the same lender. I have a great relationship with the lender currently have 4 mortgages with them, 2 portfolio and 2 conforming.

If you really want to give her a chance then yes you should directly ask however this would be a red flag to me and would disqualify the applicant.