All Forum Posts by: Suhan Junaid

@Kevin Akers

The way around this would be an FHA loan. FHAs have a loan size max in dollar amounts. So your down payment can be as low as 3.5% so long as you don't exceed the loan size

@Nick Dini

So I typically compare to market. What’s the typical apartment unit: how much does it rent for, what kind of appliances, sqft, laundry or no, and most importantly - location, etc

Then if my unit offers more, we charge more. However, I think for rentals getting more in rent is usually harder even if you have nicer features.

My experience is been that the real premium for rent is location, then you can get incremental premium for appliances, sqft, etc.

But if you’re in a less desired location, then adding stainless steel appliances won’t give you that much of a boost

@Aden Brust

Congrats on getting started, I thought I got started early at 25 (8 years later and going strong).

Overall definitely study and networking.

From a practical perspective:

1) You don’t have to own something to make you money - essentially what positive debt / leverage is

2) Creating spreads: what something costs you vs what it can make you - for example, renting out an expensive car can flip from cost to profit

3) Buying in bulk and selling in smaller units is a good way to make a profit - like being able to afford a bigger apartment or rent a big house and then subletting the rooms

@Matt Camilliere

I think it’s possible to have both...if you do commercial.

Commercial values are based on NOI and cap rates. So if you're NOI (and thus cash flow) goes up and even if your cap rate stays the same, you have appreciation.

@Andre Coelho I’m a local investor based out of Southeast FL. We have 30 apartment units and a sizable commercial portfolio. Happy to discuss. Cheers, Suhan

@Will F. I’m a few days late to your post but I’d be happy to discuss with you. I have about 30 apartment units in palm beach county, with lake worth being a specific focus of ours. Cheers, Suhan

@David McKee Congrats on your first steps - would love to connect if you make it down to south Florida! I did a similar corporate to investor transition, even long distance, low yourself in 2016. Cheers, Suhan

@Travis Smith - that was a bit of a lengthy post, so not sure if I caught if you have any specific questions. Just break them out in a reply and I'll try to help if I'm able. 

I think instead of trying to upgrade your condo to hit a potential future appraisal amount. Can you "house hack" by getting a roommate or creating a sleeping area for you in the living room? I think @Brandon Turner did this for his initial rental when he was in college. 

Alternately, if you have some money saved up and your condo would net positive cash flow. Then I think you could look at potentially house hacking a small multifam like a 2 / 3 / 4 plex using an FHA or just a bigger 2 bedroom condo.

I wrote up a short initial steps for house hacking replying to someone else, I can send those to you too if you're interested

@Keith J., get in touch with a mortgage broker or a find a local / community bank that can do a "scattered site" loan. It's a loan which packages multiple properties into a single loan, so it's terms are typically hybrid between commercial like and resi loans.

I made about 20/25 calls in my area before I found a bank that would do such a loan. 

I think the easiest way to get going on this is to have a written out email and call script. Most banks you call will send you to a voicemail. So I started asking for the person's email before being transferred to the voicemail.  

Then I would leave a voicemail (using the script saved me time since I wouldn't have to think about it and i would mention all relevant info since I had it in front of me), I'd also let them know I'd follow up with email, oh and leave your phone # twice so they don't have to replay the message to get it. Then send your standard email in!

Good luck!

Suhan

Congrats @Scott Vogeli! As mentioned above you might be able to get started right away. Here are some steps I would recommend to get started if you're going the "house hack" route (note I'm 4 years and ~30 units in but will start my first hack next year haha! So this what I've done thus far):

1) Where to be: Figure out where to buy your 4 plex. Remember this might not be ideally where you want to be but a balance between where profitable rentals are and a neighborhood good enough for you. Schools / Parks may drive this decision. I was able to get into a smaller town's downtown so got a mix of night life, schools and civics.

2) Financing: Talk to as many banks (conventional, commercial) and mortgage brokers as possible. If you stay with a 4 plex (or fewer units) you can do a lower down payment FHA loan (but maybe higher costs due to PMI). Or if you have money, jump into a 5 plex. Being above 4 plexes frees leners from RESPA / Fannie / Freddie so they can do more interesting things. And if you're looking at 4 units, an extra unit or 2 for 5 / 6 - plexes wont be that more complicated. I initially started with almost all 4 plexes and had a tough time getting financing after my 2nd deal because most lenders wouldn't consider my rental income until I had it for 2 years consistently. Or I had to go to investor friendly lenders who charged meaningfully higher rates or points.

3) Network: Meet as many people as possible. Go to the local BP meet up, go to local REIA meetings. Meet as many landlords and investors as possible bounce ideas off them. Take them out to coffee or lunch.

4) Vendors: Start to build and vet a vendor lists: contractors, plumbers, property managers, lawn service, etc. If you want to look at properties needing work, get a design down that you can do for ALL units so you can buy flooring, vanities, paint, countertops, etc. all in bulk and get volume discounts! (Your contractor or property manager can help with such discounts as well). Contractors will also love you if you have the same design for all units. Additionally, any excess materials, say vinyl flooring, you have from the remodeling, you can use for repairs in the future.

5) Dont mention it to tenants: Prior to having our property manager in place, we never told tenants we were the landlords. We just said we worked for them as managers. This reduces the potential for conflict.

Best of luck!

Suhan