Multi-family, SFR investor in Boston, Dallas, maybe Denver

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Multi-family, SFR investor in Boston, Dallas, maybe Denver

Nancy C.
Real Estate Investor · Melbourne, Victoria · Member since 2012 · 29 posts · 5 votes

Hi!  I'm Nancy Capron and I have been a dabbler in real estate investing for the past 12 years.  We started with a slow flip of our personal residence and then purchased a three family in Boston and lived in and renovated that.  I got tired of self-managing so moved to Melbourne, Australia (OK, that was really because my husband got a great job opportunity).  We have since purchased long-distance 3 single families in the Dallas area and are considering purchasing another single family in Colorado, probably north of the Denver area.

My real estate goals are probably similar to everyone's, passive income so we can retire.  While my husband and I have just turned 40, we've been saving well from his well paying job for 15 years so we're hoping to get there in the next 5 years.  I came to BiggerPockets a couple of years ago looking for advice on how to make that happen.  I haven't been very active nor very deliberate in our investing.  But since my husband keeps running the numbers and saying he's "done" working (and/or he wants to work in Asia :)  ) we need a more considered plan.

We're headed back to the US for an extended family visit and are considering purchasing another property in the Denver/northern Colorado area (mainly to help a family member).  I'm bumping in to the "fifth mortgage" problem and looking for advice and other members' experience before I waste my vacation time "working".

Looking forward to taking this more seriously and making more connections this time around!

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Bill S.Pro Member
Moderator
Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
11y

@Nancy C. a couple of thoughts in reading your post. First, welcome back.

2nd and the reason I voted for your post. Becoming more deliberate in your RE investing.

3rd and completely contradictory to my 2nd comment. You said something that is a huge red flag in real estate. Purchasing a property to "help" a family member. That is not an investment, it's a charity and you should mentally burn that money. If something good comes of it then great but 90% of those deals end up bad. There is story after story here and many other places to support that statistic. 

4th - loan sources for 5 plus investment properties. If you find the right lender they will take you up to 10 properties with loans. A good investment minded mortgage broker knows the 3 or 4 places you can go from 5 to 10. There are also local regional banks that will do commercial loans covering the purchase of investment properties. They have no upper limit. The down side is that the 30 yr fixed is out of the question since these banks hold the paper in house. There are a number of posts about local banks that do "portfolio loans". Hit the search box in the upper right hand corner and see what you can find. 

Also any good investor focused agent should have a few options for those wanting more than 4 properties with loans.

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  • Bill S.Pro Member
    Moderator
    Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
    11y

    @Nancy C. a couple of thoughts in reading your post. First, welcome back.

    2nd and the reason I voted for your post. Becoming more deliberate in your RE investing.

    3rd and completely contradictory to my 2nd comment. You said something that is a huge red flag in real estate. Purchasing a property to "help" a family member. That is not an investment, it's a charity and you should mentally burn that money. If something good comes of it then great but 90% of those deals end up bad. There is story after story here and many other places to support that statistic. 

    4th - loan sources for 5 plus investment properties. If you find the right lender they will take you up to 10 properties with loans. A good investment minded mortgage broker knows the 3 or 4 places you can go from 5 to 10. There are also local regional banks that will do commercial loans covering the purchase of investment properties. They have no upper limit. The down side is that the 30 yr fixed is out of the question since these banks hold the paper in house. There are a number of posts about local banks that do "portfolio loans". Hit the search box in the upper right hand corner and see what you can find. 

    Also any good investor focused agent should have a few options for those wanting more than 4 properties with loans.

    2Reply
  • Matt M.
    Realtor · Denver, CO · Member since 2013 · 2k+ posts · 1k+ votes
    11y

    Bill covered some great points., and welcome back x2. As I am sure you know, the front range market is on fire right now. I would suggest having an idea about what/where you want this home to be before you land, and really getting the financing in order. That way you can limit your work during your vacation. 

    0Reply
  • Nancy C.
    OP
    Real Estate Investor · Melbourne, Victoria · Member since 2012 · 29 posts · 5 votes
    11y

    Thanks @Bill S. and @Matt M.for the warm welcome back!  Thank you for your advice and the points that you made.  I fully expect the "helping family" to not go well.  But I figured if we have to pay rent for my husband's parents anyway, it may make sense to pay off a part of our own mortgage instead of some other investor's.  Right now we're just in the investigation stage.  The front range is definitely on fire right now, and once we check it out in more detail may decide to instead invest elsewhere.  But I thought it was worth investigating since it sounds like either way we'll be putting money every month towards my in-laws' rent or mortgage.  Any advice if we end up going this route, or is it better to just suck it up as a sunk cost and move on?

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  • Mike HurneyPro Member
    Real Estate Investor · Boston, MA · Member since 2009 · 2k+ posts · 542 votes
    11y

    @Bill S.

    "3rd and completely contradictory to my 2nd comment. You said something that is a huge red flag in real estate. Purchasing a property to "help" a family member. That is not an investment, it's a charity and you should mentally burn that money."

    If it's a family member you may have no choice, however, if I lent money on a home, it would be in first position mortgage note!

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  • Bill S.Pro Member
    Moderator
    Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
    11y

    @Nancy C. since you are committed to helping them you should just take the place they are living out of the "investment category" in your mind. You would have to look at the cost of purchasing the home vs renting something for them. Perhaps they would be willing to move to a more cost effective place in the USA to live since you are footing the bill for housing?

    I would look at it like I would for my own living situation. Do I buy my own home or rent? Usually it's buy but it really depends on where in life the folks are you are helping. If they are at the point where the next step in a couple of years would be assisted living then perhaps buying is not the best approach. If they realistically have 10-15 years of independent living ahead then buying would be a slam dunk.

    BTW it's awesome that you are in a place to be able to help them. Kudos to you.

    Bottom line though is that this is a your gift to them and perhaps by purchasing you end up reducing your long term costs then great. 

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  • Nancy C.
    OP
    Real Estate Investor · Melbourne, Victoria · Member since 2012 · 29 posts · 5 votes
    11y

    @Bill S.  this is a great way of looking at it. I have been trying to put it in the investment category so that I'm less resentful of spending the money every month. But thinking of it more as a gift and how I would approach it if were my own living situation makes perfect sense.  They have 10-15 years of independent living ahead but have been exceptionally nomadic so I'm not sure that they would choose to stay in the same place for that long.  In that case renting is the better option, especially since they're moving to an area they haven't lived long term before and who knows if they would want to stay 10-15 years?

    It definitely is great that we're in a position to help.  I just need to get over the resentment of paying for their retirement instead of furthering my own.  Better that than having them move in with us 😁

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