Some Help/Questions on Getting Started

[Anthony Schiano]

Hello everyone,

My name is Jonathan, and I wanted to get involved with real estate investing.

I'm thinking about starting a short-term rental business, rental arbitrage, a laundromat, or partnering with someone in real estate.

Before I start out, I do have a couple of questions.

Current scenario:

I do own a house with a total of 4 rooms. I'm going to rent out 2 or 3 rooms, which could possibly cover my mortgage.

Bought Home: 300k

Current Owe: 200k

Current Value: 470k

Equity: 470k - 200k = 270k

80% LTV: 470k / 80% = 376k

Available Cash: 376k - 200k = 176k

I did talk to a lender at my local bank, and they are willing to give me 80% LTV.

Obviously, the great news is that I have 176k to use in my favor to invest.

The bad news is now my mortgage went up from ~1200k to ~1700k, and it resets my mortgage back to 30 years.

The good news: appreciation, tax benefits, tenants paying down your mortgage, and cash flow.

Like I said before, to cover most of my new mortgage, I'm going to rent out 2 or 3 rooms.

Does anyone have an idea what to charge for each room?

It is a nice big house, built in 2019, in a nice area (Myrtle Beach, SC), with nice attractions.

Should I get an LLC if I want to purchase another property with the extra money from refinancing?

How do banks look at my DTR (debt-to-ratio)? I mean, if I constantly buy a house, wait for the house value to increase, go to the bank and refinance, dump it into another property, and repeat, wouldn't I be in so much debt that banks would shy away from lending to me? Or would having a positive cash flow change all of that?

I'm assuming that once I receive the equity from refinancing, I have to re-apply for another loan and get a pre-approval from a bank in order to purchase the additional property. Is that correct?

If I get a pre-approval loan from my bank, is it possible to buy multiple rental properties?

Thank you and sorry for all these questions.