Looking For Feedback On My 2021 REI Strategy

[Justin Spencer]

Hi there,

I currently live in Mesa, Arizona - I live in a 5-bedroom/3-bathroom house.

I live in the Master Suite and rent out the other 4-rooms @ $750/piece quite successfully and have a solid group of guys I find through FB ads, then I screen with MySmartMove dot com, then we sign room rental leases.

I believe I am currently in a position to get a $60k+ or higher heloc on my current home.

I was thinking about drawing on that 60k + holding the cash in an account for 2 months, and then buying another 5-Bed/3-Bath house under the guise of a primary-residence to put down 5% with PMI and then turning this existing home which has 80% LTV, into a rental.

I prefer to rent out room's individually since I can make alot more cash, and I have little to no trouble finding solid people to live in them since my main profession is marketing/communication and sales and "people" so to say.

So I have several questions:

1). Would you rather just rent out the entire house to a 1-family unit with a 12 month lease and break-even on it?  Or would you side with my idea of collecting upwards of $800-$1000/mo in cash-flow after all expenses by renting out each room?

2).  If i were to do the room-rental idea, I don't know how Arizona laws work regarding what a landlord can and cannot do regarding his rental for entering the house (to show rooms), etc.  Could I have each room renter tenant sign + agree to a bunch of disclosures about when/why I'd be in the house and how much notice I'd have to give them or what not to show rooms or inspect repairs, etc?

3). Are there any legal constraints to doing this particular idea?  In any shape or form I'm not considering?

The 4 guys I live with now could actually just "move" with me to the new primary residence house and I could in affect just rent out the old house to a family at 12/mo's with current market rental rates, or I could do it room-by-room and stand to make a whole lot more.

4). I wonder what the banks need to know (my credit scores are 740+) and my DTI right now is 40% or so at current, to approve me for that new loan?

Curious about your thoughts and feedback on these ideas?

Thank you,

Justin