All Forum Posts by: Tyler Kesling

Newbie here- I haven't identified any specific assets yet but I'm looking at 4plex or smaller. My strategy for getting started is to use a HELOC for my down payment and all other upfront cost and reserves, then refinance as soon as possible to get the fixed, lower, interest rate. I'm just waiting for the credit union to get the appraisal setup so I know exactly how much in funds I have available. I know cash flow is tough to come by right now, even harder when adding in the HELOC to the DS, so I'm curious about what it would take to refinance a property on closing day? I think I read about some deals this strategy in one of Ken McElroy's books but not sure if that's even a real option or just a good line to add to a book. What criteria would you be looking for in order to qualify and what are the chances of pulling this off?

Thanks

@Scott Allen they just came on the market 2 days ago. I really just want to see if I can get enough info to get the NOI before I proceed too far. Taking the market rents, accounting for a 10% vacancy, the debt service, PM fees and everything else, it seems like I should be able to cash flow about $600 for the 4 doors combined. I'm just curious what leases are in place, what the income and expenses are, and what the reason for selling is. This would be my first attempt trying to submit an LOI.

@Jay Hurst how hard, or common, is it to get simultaneous loans on the two properties closed together? Maybe I'm putting the cart before the horse so knowing the closing cost would be similar it shouldn't impact my underwriting that much either way. 

The property is Huntington WV and is exactly 25 mins from where I'm standing, so I'm only calling it out of state because it technically is, but it's a location I'm fairly familiar and travel to often. Huntington is a little warmer market than Ashland and has a lot more property options. I'm not opposed to investing in Ashland, but Huntington would be my first choice due to the population, demand, growth, college, affordability, and the list goes on and on. So unless there are big hurdles to buying across state lines, I don't really have any concerns of doing whatever I can on my own and outsourcing the rest to the folks over there. 

Thanks for the help, I'll take a look at local agents and see if they can help across the line and see what my local CU and other locals can do with a portfolio loan. 

I'm guessing national or regional banks don't really do that?

@Jonathan Greene the property is out of state (I'm in a tri-state area). Should I try to find a realtor from the state the property is in? Are there any issues with agents working across state lines? I'm fairly certain the listing group is also the property manager so I'm not sure if that's a pro or a con. I can see both sides. I'm keeping my eye out of a 4plex to help reduce my, probably unreasonable, fear of vacancy risk but keeping my options open just to get started so a 2 for got my attention.     

I've spotted a package deal for two duplexes right next door to each other. I'm going to reach out to the broker but don't want to sound too much like the noob I am so I'm curious that since these are being sold together, will I have to look at two separate loans/closing cost or is there a way to do a package loan? If it's two mortgages, how common is it for a bank to do two at once for a new investor? Anything odd I should ask the broker since it's a package? Thanks in advance. 

@Joe Villeneuve . I hear what you're saying but as a new investors, I'm not going to be able to acquire 4 SFHs to start. I think after I have a few investments in my portfolio it won't be as big of a concern. 

I've been focusing on fourplexes as a first investment to spread vacancy risk but the inventory in my driving area is pretty low. I'd like to at least get something in escrow before the Spring. Would you recommend expanding my search area, wait it out, or look into duplexes in my current markets? As a new investor, a duplex gives me some pause because I'm afraid there might be long periods of vacancy where I'll have to come out of pocket to cover expenses. I don't know if that's a reasonable concern or do you just plan on "X" number of months and hold it in reserves? Thanks for any advice or guidance you can provide. 

@Steve K. I've got access to some realtor friends that I could probably get some comps from. I don't think they have the drive I'm looking for as I try to build and grow a portfolio so I don't think I'd trust them to build a partnership with but, yes, that's probably a good idea. The sign says $200K OBO and somewhere I read the owner and his wife have moved to Ecuador and just done with being long distance landlords. If income, expenses, and comps look legit, I'm thinking about $160 and hoping I can land it somewhere around $175K. I'm in a very small market where the average house price is only about $140K. Recently sold MF on Zillow are pretty much inline with the asking but I will definitely get a professional opinion. Thanks for advice.

@Justin Moy @Gino Barbaro Thanks for the advice, and the link, guys. I think I will just reach out directly and work with a title company, if it goes that far. I keeping forgetting that I actually had a SFH that I did a LTO and used a title company to close. Apparently it wasn't that big of deal since it didn't make an impression on me enough to remember I did that. There's a story there but anyway...

 From what I've been able to lurk around and find out, apparently the owner has moved to Ecuador and very motivated. 

While I've got you...They've got an asking price and a total monthly rent listed on the sign. I can estimate most of the cost, taxes, insurance, utilities, PM fees, and such and I know that should be provided in the expenses but when it comes to the actual maintenance of the property, what strategy do you normally use? From the looks of the sign, I'm not expecting there to be detailed reports on facility maintenance. Depending on what model I use, I obviously get a different DSCR. My financing strategy would be to HELOC the down payment and repairs then, as quickly as possible, do a DSCR to bring the mortgage together and lock in a lower interest rate. My little calculator tells me I should still be better than 1.25 in any scenario but just thought I'd check with some more experienced folks to have a better idea of what to expect.