All Forum Posts by: Travis Paez

I’m an investor in Annapolis. I’d be happy to chat about your situation and plans. Please call or email me so we can get some coffee or something. Looking forward to it.

Harrison Chaires thanks for your service and good luck! I'm from Annapolis as well and just came back a few years ago after being gone for almost 15. I have properties in Arnold and Baltimore City. Lots of good stuff around in a variety of types and conditions. Just depends on what you really want. PM me if you'd like to get together and chat. I come across deals all the time that make me wish I had more time and money. Take care, Travis Paez

I love the idea of a meet up in town but unfortunately I work evenings and won't be able to go tomorrow. Hope you keep it going, maybe my schedule will allow for the meet up in Dec.

Welcome, Ken and good luck!

Commercial lenders will require at least a 20% down payment. Possibly 25-30% on your first deal. You could come up with this money by raising it from private investors(difficult with no experience), you could use a home equity line of credit on an existing home, or hit up a family member. Another option to make your commercial deal more attractive to banks, family members or private investors would be to use your VA to buy a three or four unit(many available in DC or Baltimore, think old row home already converted). Live in and operate it as a multi family and within one year, you are an experienced multi family investor. Then you'll have better rates and terms with a commercial lender, and you'll have some clout when asking for money from a family member or private investor. After a year, you can move out and rent the last unit. VA loans can be used again and again with the previous loan terms remaining in place for the whole thirty years. Usually only need one year in before asking for a new one, less time if you have a change of duty station.

We have a rental condo in Arnold, MD. The assessed land value is almost half the total value of the condo. I feel like this is skewed in the opposite direction. If your county is assessing it at zero, enjoy the blessing and the bigger deduction.

When looking at anything 5 units and up you can value it using the income approach. Annual gross income -expenses= Net Operating Income(NOI) NOI / Cap Rate= Value Be sure to use all possible expenses( taxes, insurance, common area utilities, vacancy, repairs, cap ex, landscaping/snow removal to name a few) You can ask brokers in the area what the cap rate averages or you can evaluate recently sold deals in the neighborhood if you can get all their info. I would need a cap rate of 9% or higher for student housing in my area. Once you know the value, subtract your repair costs and any cushion you want to leave yourself and make an offer. Good luck, hope this helps.

Being that it is a four family, an appraiser would probably use comps in the area rather than the income approach for valuation. That being said, you should look at both. To be safe, once you find the value, either by potential income or comparables, you base offer might be 70% minus repair costs. If this offer is too low for the seller, maybe he would consider a higher offer if he finances the deal for you or if you are buying his whole portfolio, or both. For example, you can definitely afford a higher purchase price if he's giving you a three year no interest loan(with a longer amortization) in which time you can renovate, rent and refi.

Welcome Colleen and congrats on taking your first steps! Different financing options are great for different types of deals. My wife and I used an FHA loan to buy a house that we spent many months renovating while we lived in it so we only put 3.5% down. A conventional loan that you don't live in could ask for as much as 20-25% down. Hard money lenders might only need 10-15% of purchase price and you could finance the rehab costs but interest rates would be much higher.

 You'll need to work out a detailed plan including timeline, scope of work, exit strategies, etc before knowing 100% which financing option would be best for you and the deal. 

Welcome Tim, Sounds like you had some lessons the hard way but at least you know you learned those lessons well. I rented my first house out in Pasadena, MD only to find out that I knew nothing about being a Property Manager. Things have turned around completely for me. Feel free to reach out if you want to chat about potential deals or ideas. There are a couple of great meetups in our area too. Good Luck!