All Forum Posts by: Syed H.

1%, 2%, don't really matter. What matters is the actual cost to run a building in any specific area. Every area is a different and has their own nuances. Speak to people who have owned for a few years that have achieved some scale (50+ units) and they will tell you the pros and cons of your area. 

Many area that seem like great buys according to the percentage rule, are horrible areas when you get real numbers from owners (and not TK sellers and agents). Usually maintenance is much higher, turnover is very high; etc etc. 

For every person here that says they have 2 people they know leaving, I know 30 that are staying...

Covid is now spreading throughout the south now too. Will people leave from there now too? 

Full time WFH is temporary. No one wants full time WFH. Prime example of recency bias 

It happens.

I had 3 contracts fall through on the same property on a hot property in a very hot area. 1st person decided to go lease a new car 2 weeks before closing and that ruined their DTI. 2nd person wanted an unreasonable repair that I couldn't realistically facilitate (needed access to the neighbors property) and wouldn't take a credit. 3rd person had their home sale fall through, so they backed out and lost a part of their deposit. But it worked out for me bc I sold it for $30k over what I originally had it under contract to guy #1. So don't assume you have "leverage" just because of this.

There was nothing wrong with the property, just an unlucky number of contracts. However, this is rare. I've only had this happen once in 9 years. Usually you only deal with a maximum of 1 contract falling through. 

Congratulations for working for a HML and seeing successful deals. I'm an actual flipper, until you do it yourself, you don't understand everything it takes to flip. You also have some bias towards this since you work for a HML. Anyone telling someone 100% financing is a good idea for a new flipper is an idiot. For experienced people it's totally different.

I don’t sugarcoat things. 100% financing for inexperienced people is a dumb idea. It should never be done. You are very likely to fail. 

People don't like to hear that you should actually be patient when it comes to REI. Save some money, build a network of equity partners; etc. Everyone wants the easy way.

 Or Cameron, maybe you should learn from experienced investors. That’s the point of this forum. You know what’s negativity? Losing a property, ruining your credit score, or losing a crap ton of money. Your input as a 23 yr old with 1 investment when it comes to this topic isn’t really helping. You’ve probably never even flipped a property. 

I'm a flipper who uses hard money every single day. It's still not smart for a new flipper to go get 100% financing from a HML.

Even if someone was willing to do it, this is a stupid idea. Flipping is not simple, a high interest rate with "even more points" makes an even higher chance of failure.

Don't drink the flipping koolaid. You have to be very conservative with your underwriting and renovation budget. Tons of "comps" that you see are unsuccessful flips. 

 No bank I've heard of will give you credit for "house hacking" rental income, especially with no rental history. If you are buying multi unit building (2-4 unit), they would credit you some rental income. But not on a sfh house hack. 

With a salary of 120k/year, with no credit card debt, car loans, student loans; etc, your DTI with a $800k loan @ 3% for 30 years, with $1000/month in property taxes & insurance, is 44%. That is borderline. With any consumer debt, higher interest rate, higher insurance or higher property taxes, you will not qualify.

Let me see if I am reading this correctly.... You make $60k/year and you expect to qualify for a $780k loan? Sure you can get a low downpayment loan, but your DTI will be insane. What bank will give you this loan?

Eviction? no

Low Credit? Yes, depending on the Class of property.

If you're gonna quote me multiple times, just tag me so I can respond :)

HML's/Bridge lenders are the in the business of lending. That is their everyday job. A PML comes and goes. Even banks that have gotten into the business are bad at giving bridge/hard money. Many HMLs were still lending in the heart of the pandemic. Mine lended on a April close. I also don't have just 1 HML, but multiples.

Like you said Jeff, Lending, like any other business is about your competitive advantage. So we do agree on that. A PML who wants to just lend $50k probably has none. You sound like a much larger PML, you are different. My point is that a good HML has a much higher competitive advantage.