Newbie with a trump mentality

[Juan Arango]

Hello everyone!!! My name is Juan and i am brand new to the bigger pockets community. I am newbie to the real estate game, but will be closing on my first 4 family unit November 25. The property is in Rhode Island and was listed at $269k. I was able to get it down to $230k including closing costs. I am using a FHA loan and used some of my 401k to put down the required 3.5% down payment. The first and second units are already rented with section 8. The third is not rented yet and I will be moving into the fourth unit. The section 8 apartments will cover the mortgage and expenses and the third unit will be cashflow. Everything seems good so far.. I would like to get into a second property as soon as possible, that's where i need more guidance. To refinance in 6-12 months with a conventional loan without PMI I need to get to 80% LTV. Should i use the profits to redo the bathrooms and kitchens to appreciate the property or use it to pay the principal down? Is paying for another appraisal the only way to know if i have built up equity? Is there way to avoid going thru the whole refinance proses to find out I still need PMI? Would i be better off saving 20% for the next mortgage and do a conventional loan? Im very thankful to have found a website like this one. The amount of information and education it has provided in such a short time is priceless. Please feel free to give me any advise/input/recommendations Thanks everyone!!

[Terryl D.]

Juan... I agree with what Anthony said as well.   I was in a similar situation to you a few years back. I bought a multifamily and moved into one of the units as my first property. I was immediately focused on what my next purchase would be. Your mind is certainly in the right place.   Personally what I did was save up the money for the next down payment.  Renovations are not a bad idea but you have to spend up front cash (that you could be saving towards your next purchase) in order to do so. I recently closed on my 3rd buy and hold multifamily property using the save and deploy strategy.  Also keep in mind, your lender may require reserves for your next purchase after you've put down your cash and paid for closing costs.  It's probably not a bad idea to start keeping your eye on the properties and price ranges your interested in and probably talk to some mortgage professionals to get some solid numbers on exactly how much money you'll need to make your next deal go from an idea to reality.  Good luck!