All Forum Posts by: William Sing

The interest rate seems pretty low especially if this is multifamily. I'm seeing closer to 6% but would check with a lender and I'd up the management fee up to 10% to be conservative. I'm not sure what the property address is so have no idea where this is so I am making some broader assumptions. 

I think the minisplits are probably a better bet. They are a lot more localized and can be controlled by each floor. The one major downside of having the central air is that your tenants may disagree about what is the most optimal temperature and making them separate would probably be best long-term. Check your local state/county for any discounts. I know here in Portland we have incentives for using mini splits since they are more efficient. Hope this helps!

Hey Joseph! Congrats on saving up a down payment. I would talk to a few banks first and see what can be done. One of the major issues you will have is getting the DTI to work out. A way around this would to get a cosigner. This is something that will provide a lot of financial security for the bank.

If you do bring on a cosigner, I'd just make sure to educate them on what you are planning to do and talk to an attorney about drawing up an operating agreement. This will make things more up transparent. 

If you live there as well and rent out the rooms you can probably make it cashflow or get pretty close to having everyone pay a majority of your mortgage payment. 

Hope this helps!

Hey Kyle!

I'm looking to use a HELOC I recently got to do something similar. The only caveat I may add is that with owner-occuppied you can usually only get about 80-85% LTV. If you can get a higher one please let me know! I called about 10 banks and couldn't find something better.

Using the equity to invest in other deals is great and depending on how much equity it might be a good idea to start looking into investing out of state into cheaper markets! I'm currently signed up with Roofstock and have a couple of collegues who have bought cash-flowing properties with the equity they have built up. 

Hey Zachery, I think that you can make that work. One thing to note is that you may want to talk to your lender about the options since the HELOC may mess with your DTI.

Just know that the HELOC will most likely have a variable rate and I would plan for the interest rates to continue to go up at least until the end of this year and into the next. Usually, you can only get about 70-75% LTV for investment properties as well.

Hope this helps!

Hey Emily! Congrats on analyzing deals!

I'm not super familiar with the Euguene area but if it is anything like Portland a lot of small multi-family are not penciling out to cash flow year one. One thing to note is that you do have a very low down and this is going to be a place to live. This is one of those things where if you can get it to cashflow within the first 2-3 years it is a win. 

Oregon also has rent control which is another factor to consider. We are capped at 7% + CPI (Consumer Price Index). This fall we should be getting an idea of what CPI is but it will probably be 6-8% which means that you can be a bit more aggressive in the first couple of years of raising rent, but know that it is not a long-term rate. 

I would also consider your rent as part of the "full rent". Unless you are renting by the room it doesn't usually pencil out since bigger cities in Oregon are more equity driven than cashflow driven. 

If you have any questions feel free to DM me. Note that I only check BP once every week or so and if you want a quicker response just take a look at my page for contact info. 

Here is a video of a recent deal analysis as well. https://vid.us/ljqr3p

Hey Michael, another option is to get a 2nd home (vacation home) and rent it out as a STR. Not sure where you are at but the vacation home usually only takes 10%. Also if you found your next home with an ADU that might also be an option.

https://research.stlouisfed.or...

This would be helpful for you!

Some Notes:

- Breaking down costs for a contractor can be a pain. If you want it broken down, then you may need to pay for that. This is actually pretty detailed for a contractor. 

- Not sure if permits take a long time where you are at, but it takes a long time here in PDX. That may be why there is no specific end date. 

-  What would make the midpoint? Make sure to understand when that would be good. 

- The payment cost isn't too crazy, a lot of contractors had to add that into their contracts with material prices fluxuating so much. 

- I'd see if you could get a general worst case scenario for how long the project takes. 

Hope this helps!

Hey there! 

I'd take a look at the level of renovation you'll need from other rentals around you. Using more neutral colors like grey and beige seems to be all the rage lately. 

How much you put into the renovations will primarily be based on what you want to outsource and the grade of materials you are looking for. I'd look at Ikea for cabinets. They are pretty good quality and lay on rails so they can be swapped out. If you are not looking at laminate (which has gotten a lot better) then look into engineered stone. Quartz and Granit are good but doesn't always have the best durability. I'd just get appliances from good brands from whirlpool etc. 

Hope that helps!