Looking for my first property

[Vincent Keele]

Hello Everyone,

I am looking to purchase my first property. However, I have found that in Seattle, most investors stay away due to the stringent renting laws and the high cost of real estate. It looks like to get started, I will need to do my first deal out of state, perhaps in the Midwest or the South.

I am looking into DSCR loans, but I am being told that because I do not own my personal residence, I may not pass underwriting.

Thinking outside the box:
I started asking lenders about house hacking. Perhaps the conventional 5% down, but since I am self-employed and write everything off, I am being told that I would still need to put down 20% and provide a year's worth of bank statements to satisfy the underwriter.

My question for the community is: does anyone have any ideas on how I might structure my first deal to acquire property number one?

Thank you in advance for your suggestions.

[Mike Morgan]

Hi Vincent, you said you are considering out of state investing. Chattanooga Tn is a great investment market and is more landlord friendly compared to others that are more tenant friendly. If you would like to chat sometime, please feel free to reach out. I'd be happy to try and answer any questions you may have.

[Samuel Diouf]

Columbus, Ohio is a great market to consider if you're leaning towards appreciation. Multiple, billion dollar companies are investing heavy in our area, such as Intel, Google, and Amazon. Which will bring plenty of other investors and general business to the area. I moved here from Florida after seeing the projected growth. 

I can also refer you to some great lenders in Ohio, who will be able to answer your questions on financing. 

[Vincent Keele]

Thanks Mike, I am unfamiliar with Chattanooga, but I will have a look and get back to you.

[Matthew Kwan]

HI Vincent,

Correct DSCR is only applicable towards investment properties and you need to own at least one property in order to look into DSCR.

You can always start off by house hacking meaning you live in one UNIT or ROOM and renting out the other vacant units/rooms to offset your monthly mortgage payment.

There are several ways to run and make sure you are maximizing your rental income while keeping your living expense as low as possible. Try looking into zillow/Redfin and see what your potential rents you can get near the neighborhood by filtering the bedrooms/bathrooms of the intentional property that you are planning to buy. This will allow you give a reference point on how much potential rent you can receive. (Max vacated rents - your monthly mortgage payment) = +/- net cashflow. Happy to connect and assist you in your real estate investing journey.

Happy to connect if you are interested to expand your portfolio

@Carlos Valencia @Albert Bui

[Ko Kashiwagi]

Hi Vincent,

There are lenders out there that can do DSCR financing without primary residence owned. There are also self-employed bank statement financing that uses 12-24 months of bank statement to qualify you for conventional financing starting at 5% down.

[Jeremy Melloul]

Hey Vincent, to echo Samuel's comment, Columbus, OH, is a great market to invest in—I would argue the best in the country at the moment. Columbus is definitely an appreciation play for sure. On average, homes in the area have seen an increase of 8.18%, significantly higher than the national average, which typically ranges between 2-3%.  Also, in Ohio, the landlord-tenant laws heavily favor landlords. Typically, only a 30-day notice to vacate is required to get a tenant to vacate and the eviction process itself is also relatively straightforward.

I hope I was able to help with narrowing down your search. Good luck!

[Wale Lawal]

@Vincent Keele

Real estate investing can be a smart move for those facing challenges in Seattle, such as stringent renting laws and high costs. To start your first deal, look at house hacking, DSCR loans, and smart pay plans. House hacking means getting a normal loan with 5% down, making sure you'll earn enough after costs, and looking for areas where it's cheaper to start and renters are many. DSCR loans check how much money the home will make, so look for other loan places and how much you'll earn from the property. Smart pay plans include deals with the seller, teaming up, or getting money from personal lenders.

Good luck!

[Robert Ellis]

Quote from @Jeremy Melloul:

Hey Vincent, to echo Samuel's comment, Columbus, OH, is a great market to invest in—I would argue the best in the country at the moment. Columbus is definitely an appreciation play for sure. On average, homes in the area have seen an increase of 8.18%, significantly higher than the national average, which typically ranges between 2-3%.  Also, in Ohio, the landlord-tenant laws heavily favor landlords. Typically, only a 30-day notice to vacate is required to get a tenant to vacate and the eviction process itself is also relatively straightforward.

I hope I was able to help with narrowing down your search. Good luck!

 https://www.columbusrealtors.com/clientuploads/HousingStats/...

definitely a bit bullish here on appreciation. check the April housing stats. median and average price is up mid 5s. New construction is higher at about 8.63%. Existing inventory isn't that high. some submarkets are higher if they are lower prices 

[Vincent Keele]

Thank you everyone for all the great comments and suggestions

[Jimmy Lieu]

Quote from @Vincent Keele:

Hello Everyone,

I am looking to purchase my first property. However, I have found that in Seattle, most investors stay away due to the stringent renting laws and the high cost of real estate. It looks like to get started, I will need to do my first deal out of state, perhaps in the Midwest or the South.

I am looking into DSCR loans, but I am being told that because I do not own my personal residence, I may not pass underwriting.

Thinking outside the box:
I started asking lenders about house hacking. Perhaps the conventional 5% down, but since I am self-employed and write everything off, I am being told that I would still need to put down 20% and provide a year's worth of bank statements to satisfy the underwriter.

My question for the community is: does anyone have any ideas on how I might structure my first deal to acquire property number one?

Thank you in advance for your suggestions.

HI Vincent, yes, if you are self employed and using a DSCR loan, you would have to use at least 20% down payment. If you have W2 income and can qualify for Fannie Mae, you can use a FHA/conventional financing loan for as low at 3% down. I did a very similar house hack here in Columbus Ohio by buying my first 4/2 single family house and renting by the bedrooms. I personally love Columbus Ohio and as someone who works with a lot of out of state investors - there's so many catalysts for why you should invest here. Specifically, there's job growth (Intel, Honda, Amazon, Nationwide, etc) and the population is growing (unlike Cleveland or Cincy). I really see Columbus Ohio as an extremely safe bet for the next 10-20 years. Plus, there's still so many positive cash flowing and 1% deals here in Columbus Ohio. As a local investor and agent here in Columbus, let me know if you have any questions or want to connect!

[Fonzo Barksdale]

Hey @Vincent Keele,

You're right; Washington can require a significant amount of upfront capital to enter the market. Exploring opportunities out of state, such as in the South, is a great idea.

If you have some availability to discuss your goals further, I'd be happy to go over some excellent investment opportunities in Georgia that might align with your objectives.

[Lindsay Davis]

@Vincent Keele,

How many lenders have you spoken to? I'm aware of some (California-based) investor-friendly DSCR lenders who will only consider the NOI of the target property, and won't consider your personal income or assets in underwriting.

House hacking is an interesting (and tried-and-true!) option, though I’m curious about the logistics of out-of-state house hacking—would you have to move out of Seattle? Is that something you’re willing to do?

[Joseph Chiofalo]

Hi Vincent, 

There are lenders that offer a DSCR product for an applicant that hasnt owned any real estate.

How is your credit?

[Vincent Keele]

Lindsey, you're right there is a lot involved with house hacking out of state and I'll be circling back to that particular method in the near future. At the moment, I'm focusing on using a DSCR and finding a suitable location

Joseph, if you have someone in mind, I would be open with speaking with them

[Alex Sharp]

Hello Vincent. My name is Alex and I am new to real estate investing as well. I wanted to reach out to you because I am finding it a bit difficult connecting with like minded people in my area. I am very interested in investing out of state for the same reasons you stated. I live in Bellingham and it's the same problems up here. I'd love to connect and talk some real estate. I'm curios to see where your at in your journey and how you scope out other markets.

[Vincent Keele]

Hello Alex,

Nice to meet you, we are in a tuff market. It's great for appreciation, but cash is almost impossible. What states are looking into and what types of properties?

Vincent

[Alex Sharp]

I'm looking at a few markets all over the country. There's a few places on the east coast that look promising but I'm mainly looking at Connecticut. Where are you looking?

[Vincent Keele]

Sounds cool, I am mostly looking in Ohio and Florida