All Forum Posts by: Alex Polyanskiy

If I make $40k a year how much house can I afford?

I plan to buy a home in the summer. I am in the Pacific Northwest, average home price is $350k. I have no debt. I could not find any lucrative ways on other forums to make a reasonable purchase. All articles point to a 37% DTI ratio, but I heard some lenders can go to 50%. I want to purchase a home, live in it for a year and rent it out.

Assuming I want to do a minimum downpayment (5% conventional or 3.5% FHA) and the interest stays 3%-4% what is the max home value I could get?

I understand that I should be money wise and not purchase something I can’t afford, but I want to know the limits.

Would I be able to afford a $375k home for conventional?

Would I be able to afford a $550k duplex with FHA?

@Karl Teshima

Buy a 4-5bed 2-3bath house and rent by the room while living there(house hack). Renting by the room will yield a lot more monthly income than renting by the unit. It will require a lot more work, but just learn how to create system for everything from reading books(the house hacking strategy, the book on property management) and listening to podcasts. Since it is a single family house and interests rates are low, you can use a conventional 5% loan. This will save your FHA for a later time and you will will look better to the sellers. Let's say you can figure out how to manage renting buy the room, profiting $500-$1000 per month is very possible. After doing this for 5 years(5 houses) you could be making $2,500-$5,000 a month in income. Not that passive because you would have to look after 20-25 rooms, but still easy money if the systems are in place. Keep in mind about how long you want to manage this. You could stop renting by the room when rental prices go up. You could sell and upgrade. You could hire an assistant. These are just ideas.

What phone service do you recommend for a brand new real estate investor. I need a phone number for managing tenants. Some books recommend google voice. Some recommend evoice. I would prefer it to be as cheap as possible as I only have one property, but plan to get more.

This question has been asked in the past, but since then prices have changed and new services have been made.

What have you used?

2020 has been a crazy year in terms of savings account interest rates. What bank do you use to keep your reserves?

@Nathan Raisbeck

I just graduated in the Spring with an electrical engineering degree and I know what it feels like to just start the college journey. Engineering is a difficult subject to study. Not sure how easy school is for you, but in my opinion the first year is the easiest. If you are not enjoying the intro courses, then maybe engineering is not right? Did you decide engineering just for the money?

Another thing I will say is that there is a shortage of engineering jobs out there right now. Even before the pandemic, the career fairs at my school(Montana State) only offered internship and not a lot of jobs. There is a good amount of my friends who graduated with me that did not have internships and currently do not have job. I am not saying there is not jobs out there, but it is getting more competitive out there as more and more engineering are graduating. Not sure how the market will be in 3 years when you graduate?

Last thing I would like to say is that with an engineering jobs, you have a not more disposable income. Also you have options like 401k to be a back up in case the real estate plan does not work.

Hey everyone, I am very new to REI and am planning to do a house hack. I am putting together a list of lenders in Kitsap County, WA that can do either an FHA loan or a low downpayment conventional. Looking into either multifamily or 4+ bedroom property. Recommendations for lenders that can do that?

@Mindy Jensen

I really enjoy hiking for my dog! I try to go on a good hike every weekend. I also enjoy watching movies and listening to podcasts!

@Joe Villeneuve

Would it be wise to get a slightly high loan and use some money to replace some big expenses, like a new roof or new water heater? I feel like this would then give you a better understanding of when they will break and help estimate capex?

@Jimmy Lieu Do you have a job lined up? Are you hoping to find a job when you move? I would really focus on finding a job and having a stable income before you get there. I just move to a new state and it really helped that I already had a job lined up. I am taking some time now to analyze deals and learn about the area while saving for a house hack.

@Jorge Lopez At times like these, relying only on appreciation is risky. However, some people could argue that with time rent goes up and if you have negative cash flow, if you hold it long enough, then there will be positive cash flow. That is really risky in my opinion.