All Forum Posts by: Walter Roby jr

@Sri Voodi I completely agree with 2% not applying to major metros. Was your town home covering some vacancy, pm, and capex Or strictly PITI?

@Diane G. I haven't compared markets by that metric but it is certainly interesting. Just for others to see how you arrived at those valuations you're getting the 4.1yrs=(1/(.02*12)). Substitue R for years  of purchase price and N for desired cap rate, decide to solve for either R or N using the following formula(s): N = 1/(12R) or R=1/(12N). Thanks!

@Elizabeth Nourse Does your firm analyze projections or actuals (recent sales)? Sub Class C- properties are the only investments near 1% after repairs that I come across in my searches outside of major metros such as LA. I don't feel comfortable pursuing the 2% as I am not yet prepped to handle D like properties.

@Andrew Johnson "those won't show up non-disclosure states if you're doing your research there" Ah good point. I just researched the non-disclosure states and TX and NM are definitely in there. Both of which I was trying to analyze prior to.

@Joshua D. What city was that in, Columbus, MT? And how much did your initial valuation change from the landed/rented cost (like change from 2% to 1.8%)?

Greetings,

I live here in the Los Angeles market and by no means expect to find any investment close to the 2% rule both on and off market. I have tried researching recent sales and cross matched potential rents in other markets and am not finding what I am looking for. BP show me proof.

If possible, can anyone provide an address of an investment (all inclusive) that they acquired and currently rent that met the 2% rule (or somewhat close)?  Any market will do.

I understand if this is too sensitive to share but I think it would be helpful to show a real life example.

At a down payment of 15k with 3.5% down your price range should be below 428k. In the San Fernando Valley you should be able to find a mild rehab SFR for around that price range. Perhaps you might think of renting out rooms to college folks? You won't be able to cash flow necessarily but you could at least get tremendous help with paying down the principle.

A lot of the duplex's and triplex's on the MLS in the valley won't hit a 1% rule with their asking prices. You might have to find off market or see if they will accept your strongest offer.

Would like to know this as well

@Rick Trevizo Hey Rick I am also getting my license. What areas of LA do you work in? Perhaps we could do business in the future.

@Daniel Cuevas If I were you I would continue to hang here on the BP forums, start hitting up local REIAs (meetup.com), and talk to everyone you know about what you do.

Cheers

@Cameron Alaniz call up the 3 credit agencies directly and ask them about the situation and what steps you should take.

I am an avid user of credit karma and swear by it. With that being said don't quote me but this has helped me boost my score north of 140 points. The major factors that affect your score (according to credit karma) are:

1. Delinquencies - Always pay everything on time. Setup automatic minimum payments and pay extra to your highest interest bearing account. Pull recent reports and dispute discrepancies and try to settle accounts in bad standing.

2. Bankruptcies - If you have a bankruptcy on record this will be the hardest impact on your credit score. It takes time and doing well in all other categories to overcome this.

3. Credit Card utilization - Excellent is using below 10% of your total limit on all credit cards. Great is 10-20%. Good is 20-30%. There is a drastic drop in points once you pass 30% utilization of credit cards.

4. Hard Inquiries - Hard inquiries are anytime credit is applied for and an SSN and authorization is necessary. A hard inquiry remains on your credit report for 2 years from the date you applied then is removed. Excellent is less than 1, Great is 2-3, Good is 3-4, then steeper drops in points when you have 5 or more hard inquiries in a span of 2 years. If you shop around for mortgage or auto loans within a 2 week time frame, the credit agencies consider these as one inquiry and shouldn't negatively impact you for shopping around.

5. Number of accounts - Each open loan, closed loan, and open credit card counts as an account. The more accounts one has then the more responsible that individual is with credit. Excellent is 21+ types of accounts, Great is 11-21, Good is 8-11.

6. Age of accounts - This metric takes the average age for all of your accounts. If you have one account opened 10 years ago then your avg is 10 years. If you opened 3 new accounts in addition to the 10 yr account then your avg age will be 3.3 years. Excellent in this category is 10+ years, Great is 8-10 yrs, and Good is 6-8 yrs.

2 things to take away from this are this:

1. Figure out how many inquiries you have on your report and figure when they will fall off the report. Time this with being able to apply for new accounts (responsibly of course), not going over 4 per 2 years, so that you can increase the number of accounts and start building the age of accounts.

2. Find out how to decrease credit card utilization. If that means applying for an unsecured loan to pay down CC debt and pay fixed payments then that could certainly help in that sense.

These ideals have helped me drastically and I learned all of it from Credit Karma. By any means do not solely take my advice as I am not a professional in these fields.

Good Luck

I am not an agent or attorney but I believe as long you intend on living on the property then it will qualify for FHA. Now if you intend to move out shortly after then you must pay in full however some exceptions apply if your family size grows too big for the dwelling or if you have to relocate far away.

Does this factor in holding costs (2-6 months), RE agent fees?

@Sharon Anschultz Do you currently have any properties under contract?