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Updated over 2 years ago, 05/03/2022
New investors needs guidance
Hello everyone my name is Estevan. I own a home outright and its zoned R3 which means i can build an apartment on the property. I have about 200k cash, 725 credit score and almost zero debt. I can barrow additional funds up to 50k from family and i can obviously obtain financing. I just started a business but still work part time as a waiter in fine dining. I make about 60k working part time. I may devote all my time into the business soon and may be only self employed. I have a couple questions. First if you were me or in my position how would you ideally proceed? My second question is if i am unemployed what are my options or what do you suggest.
You make really good money part time as a waiter which will be key to getting loans as you start out. I would hold onto that job for as long as possible.
If I were in your shoes, I would put a mortgage on my house and use that money to buy one or multiple properties. I personally like the BRRRR method.
Best of luck!
- Real Estate Broker
- Cody, WY
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If you are unemployed, you won't qualify for a loan.
You have a lot of equity in your home. I would use the equity to build the apartment. If it's not enough, I would use equity and cash. I would try to save a portion of the cash for reserve and the remainder for another investment.
- Nathan Gesner
Quote from @Estevan Rangel:
Hello everyone my name is Estevan. I own a home outright and its zoned R3 which means i can build an apartment on the property. I have about 200k cash, 725 credit score and almost zero debt. I can barrow additional funds up to 50k from family and i can obviously obtain financing. I just started a business but still work part time as a waiter in fine dining. I make about 60k working part time. I may devote all my time into the business soon and may be only self employed. I have a couple questions. First if you were me or in my position how would you ideally proceed? My second question is if i am unemployed what are my options or what do you suggest.
#3 Investor Mindset Contributor
- Handyman
- Pittsburgh, PA
I have held the same online, stay-at-home job for about 13 years now. In time I have gone from full-time with overtime to full-time, to part-time, to weekend part-time. My wife is currently at the part-time stage in her job. Our rental portfolio currently produced well over 2x the net income necessary to cover our basic needs, but it will be a long time before we quit our jobs. And it's for the same reason as stated above -- banks loan money more easily to real estate investors who don't rely completely on their rental income. Banks just all love that W-2 income, they really do.
If I were you, the first thing I would do is go to the local planning and zoning board and verify that I could build that particular type of building. If they give you the green light, I would speak with a civil engineer and have them draw site plans. Next, I would contact an architect and have them draw up building plans for the particular type of building design you're thinking about going with. Lastly, I would take all those plans and go through the development review process with the county. At that point, you're out of the gate and then I would maybe start looking for financials - contacting private money, banks, etc. "Hey here's what we've been approved for. This is what we think it could rent for or sell for...etc." First thing's first, I would get official/written verification that your property allows for that type of building.
Quote from @Brett Tvenge:
Quote from @Estevan Rangel:
Hello everyone my name is Estevan. I own a home outright and its zoned R3 which means i can build an apartment on the property. I have about 200k cash, 725 credit score and almost zero debt. I can barrow additional funds up to 50k from family and i can obviously obtain financing. I just started a business but still work part time as a waiter in fine dining. I make about 60k working part time. I may devote all my time into the business soon and may be only self employed. I have a couple questions. First if you were me or in my position how would you ideally proceed? My second question is if i am unemployed what are my options or what do you suggest.
Ok thats what i figured. I think i might build an apartment in the back of my home end use the rental income with and my job to finance a 2nd property.
Quote from @Robert Wilson:
If I were you, the first thing I would do is go to the local planning and zoning board and verify that I could build that particular type of building. If they give you the green light, I would speak with a civil engineer and have them draw site plans. Next, I would contact an architect and have them draw up building plans for the particular type of building design you're thinking about going with. Lastly, I would take all those plans and go through the development review process with the county. At that point, you're out of the gate and then I would maybe start looking for financials - contacting private money, banks, etc. "Hey here's what we've been approved for. This is what we think it could rent for or sell for...etc." First thing's first, I would get official/written verification that your property allows for that type of building.
Quote from @Nathan Gesner:
If you are unemployed, you won't qualify for a loan.
You have a lot of equity in your home. I would use the equity to build the apartment. If it's not enough, I would use equity and cash. I would try to save a portion of the cash for reserve and the remainder for another investment.
Ok thanks for the response. It seems my best bet is build on the property and use combined rental income for a future mortgage on another property. How do people on say a income of 70k buy another house every year. Doesn't the bank say hey bud you have a 2k mortgage if we add another 2k mortgage you wont afford it. How do they get approved for many loans on a fixed income?