All Forum Posts by: Adrian Lammersdorf-Scioll

You definitely want to get that pre approval, not just to go see properties, but to know what you can even afford.  It's pretty much a waste of time to go look at a property, and then find out you don't qualify for it later.  

If you're paying cash you can just show your bank statement, and that would suffice as well. DSCR loans if you want to buy a rental property usually require 20-30% depending on how much the property makes already. FHA loans are doing 0% down now, but still require some payments out of pocket and your w-2 or business income to qualify for the payments.

I have a few wholesalers I am connected with in the area that will send you off market properties without a pre approval. If you're interested, let me know and I would be happy to connect you. One of them even has a hard money lender in house that will give you 70% of the ARV in cash.

Thank you both!  I feel like I've come in at the worst time, but the hard work is paying off.

I agree with the house hack idea.  It's how I started 2 years ago, and its paid off pretty well.  I've got my cost of living pretty low, and I got a pretty decent tax break.  Make sure you don't fall in love with the house though, get a good deal which is hard to find, but it is possible.  Explore the option of also taking over someones mortgage that has a low rate, or if a seller owns the house without a mortgage see if they can finance it to you.

Investment Info:

Single-family residence buy & hold investment.

A 3/2 in the Orlando area that I used as a house hack, and now rent to a family

What made you interested in investing in this type of deal?

Taking advantage of the low interest rate at the time, and got a decent deal on it

How did you find this deal and how did you negotiate it?

Found on MLS, was able to get seller credit. Was friendly with the realtor, and asked what the client wanted and she guided me. I made sure I was the last person to talk to her so I could beat the other 10 offers that were placed on it.

How did you finance this deal?

Conventional my own money

How did you add value to the deal?

Used recently sold properties in the area

What was the outcome?

Got 7.5k seller credit, and only paid 10k appraisal gap (signed an addendum saying I would pay 20k)

Lessons learned? Challenges?

This was my 30th offer that I finally one. The competition was high for anything on market, so I had to make sure I wasn't overpaying too much, and learned to always be the last one to talk to the realtor, and give what the seller wants to make sure you win the deal.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I'm an agent, and this was my first deal. I had advice from other friends that were realtors, and my mom as well that is also a realtor. My lender at the time was good at being available to help present a strong offer.

When I bought my last house hack a few months ago my lender told me you only need 1 year of income now with fha, and they also changed it to I believe 48% of income should cover monthly payments (up from maybe 42% or so).  If you don't think you will qualify than do like Jay said and get a co-borrower to help you out.  I heard Virginia beach is a really good area, I got a friend thats looking for an airbnb out there.   Talk to a lender that understands house hacking/investment side of real estate, they'll be able to update you with current guidelines.  I would worry more about income than age if you are above the age of 18.

Sounds you have the plan, just find the right team to help you, and move in on it.  House hacking is fail proof because at the end of the day you can always cover the cost of living even with a vacancy for the most part.  It does take time to find a good deal though so just be patient.  With interest rates set to rise 2 more times, more opportunities will come.  I paid a 20k appraisal gap on my first property when interest rates were below 4%, my next properties appraisal came in above what I offered on it, and thats when interest rates were between 6-7%.  Learn how to do comps as well, a good agent will guide you on how to do it, and be patient with you.  Best of luck, you got this!

Whats holding you back?  I felt the same when I started 2 years ago, people were telling me im crazy for buying and that the market was gunna tank, and now I own 3 properties have significantly dropped my cost of living, and soon will be living free and collecting income.  House hacking is great, it's how I got my start, you can get a duplex with a 3/2 on both sides especially if your income is that good.  Theres a bunch of those here in Orlando.  Not sure how your kids feel about sharing a room, but I did with my brothers growing up until I was 10 so if they're young it should be fine.

If you bought the first property in an fha you are going to have to refinance into a conventional, but even still with that you may have to wait a full year until you can do anything unless you refinance, and/or have made enough capital improvements. Make sure to check the terms of your mortgage, your lender should be able to tell you if you ask them. After a year you can buy another property with an FHA loan assuming you don't already have one or refinanced out of one. If you have a friend or partner that stays there and isn't on the mortgage you can also partner with them and take partial ownership. A good lender will be able to guide you, stay away from lenders that tell you that you can't do it, or boast how many years they have been doing that. I say this from experience. I bought my first property conventional and rented the rooms, than just bought a duplex with an FHA loan after a year of owning it/living in it (the conventional single family home I had). A good lender will guide you on how to do it, they are out there, you may need to go through a good amount to find one that is good if the one you have currently cannot help.

Another good strategy is to create a holding company out of Wyoming, and quitclaim the deed to your property under a Florida LLC that has no affiliation to your names. It will protect you from losing all of your assets outside of the real estate that you own the llc with. Thats what I was advised to do by prime corporate services. Pace Morby recommended them, and they will guide you how to do it, just keep in mind will cost about $800 to get it started, and $20 a month for a landline number that has access to calls. Definitely talk to a CPA to figure out which option is best for you. Most will give you a free hour session to gain your business. Me and my partner do house hacks as well, we started in a sfr, and are in a duplex now.

You're definitely going to want to create a holding company out of Wyoming, and an LLC in the state of Florida both having nothing to do with any of your names for protection purposes and extra tax savings (will cost around $800 for holding company and llc, and $20 a month with most companies that create LLCs for a phone line, or you can use yourself free). In this case I would talk to a CPA. Prime Corporate services does a good job at explaining, and will guide you on how to do it. They charge 95$ a month to work with a cpa that you have access to whenever. I use them and own a sfr, and a duplex with my girlfriend. Even if you don't use their services, they will explain how it works in the free call that you get with them which is nice. How you took ownership is important to, I'd assume you did tenants in common since one person isn't living there. You can only write off the portion that is rented to other people, but not so sure how it works if one of the owners is not living there. I would imagine they would get more depreciation from the part you live in. Definitely talk to a cpa though, most will give you an hour of their time free to gain your business.