It's time for the second deal!

[Luis Rosario]

Hello BP Family,

Looking for your insight:

My first deal in 2014 is a 2 unit owner-occupied property that I converted to a legal triplex. It has taught and (still is) teaching me about the complexities involved. This is especially true as the city of Philadelphia is taking me through a loop with their licenses and inspections department. Long story short, I have to do more construction and alterations int he form of sprinkler systems and fire alarms to make the property compliant.

As difficult as this can be sometimes, I feel blessed to own my own triplex. I want to continue buying properties. Specifically, I want to purchase 1-2 unit properties that are under value, fix them up and rent them out. I'm looking for a cash flow strategy. In fact, I'm looking to buy at least 2 properties a year moving forward to really start snowballing these investments so that I can be financially independent through the rentals.

I've spoken to a real estate attorney in the city and have spoken to 5 or 6 hard money lenders in the region. The issue with the HML is that many seem to require 10-15k of funds in the bank or still require all kinds of income documentation. There is one lender who doesn't so much into income and lends based on the subject property but has a minimum of 120,000. This puts me in a strange position because I initially planned to purchase SFH and duplexes in the 35-55k range. I know that in my area, these sorts of properties would cash flow.

I am definitely looking into owner financing as option. Any suggestions? What would you do in these circumstances?