All Forum Posts by: Ariel S.

I'm a big fan of Mike Kelly of Scenic South Properties!

Hi- I am a house hacker in Chattanooga with interest in getting more properties in the area. I also am starting a consulting side hustle and need a good CPA to help me with my 2017 return (oops) and setting up my LLC and other protections for my new business. Any recommendations helpful, prefereably someone that is also an investor. Thank you!

I have student loans and am under contract on a multi-family now... I've been paying on student loans for 8 years and have 5 years left. Last year I re-fi'd and consolidated my loans, they are at a low enough interest rate. Once your debt to income ratio is in a good place, and if you qualify, I'd say you should go ahead and do the FHA loan and house hack to live for free or at least cheaper than you would otherwise. If you can find a co-signer, that would be great. If not, dedicate everything you have to becoming financially fit so that when you are able, you will have no problem getting a loan. THE KEY IS YOUR DEBT TO INCOME RATIO... and credit score, of course. Getting started is the hardest part and you learn SO MUCH in the process. I ended up going conventional on a house hack, mostly because it is a simpler process than FHA. With good credit, you only need 5% down. I'll be, at the worst, paying 100-200/m on my own housing which is MUCH nicer than continuing to pay rent elsewhere. If you can't qualify on a duplex, you would be a good position for a condo or SFH that you can rent rooms out it. I'm 30 and have had roommates since I left college... I would otherwise be paying double for housing and be taking money out of my pocket. Coming out of college, you'll easily find other people your age that want a nice place but can't afford to live alone in one.

I'm not an expert so I am just speaking from experience here, but I wish I had gotten started years ago. Had I realized I could buy a condo in the Houston area with an FHA loan, by now I'd have a substantial amount of equity and the property values would have increased by large margin. Instead, I'm sure I gave away 50-75k paying down other people's assets (and had a great time spending every other dollar I had on playing- don't do that). Although it is great to be debt free, you really just need to make sure that your loan payment is low enough per month so that your income isn't eaten up. If you are cash flowing enough on your investment, you will be able to double down on other liabilities with your free income (IE- you pay less for housing so you can pay more for other liabilities). For me, I know my student loans will get paid off in time so they just remain a monthly liability and I don't dwell on them.... I pay extra on them each month to pay down the principal faster but I also make sure to save money on the side. Although you are paying interest on the student loans, you need to be keeping money in savings for a rainy day (or a down payment)... and if you have CC debt, pay those FIRST before you do anything about paying off your student loans, or buying property. If you are spending an extra 15-20% on credit card purchases, there is no point to try to earn 1% on savings or chasing good money after bad by buying the house first.

Hope my story helps- if you are passionate about it, find a way to make it work!  

Thanks Bryan & Brian- We have gotten a plan together, and I am getting contractors to come by the house to do the estimates for a line item at closing that will provide the 15k with the sales price staying at 225. Wish me luck! I don't think the seller wants to wait for me to find additional lending for a 203k- we are pushing for a close. I had thought of that, but I would have had to find another lender. 

Hi Everyone! I am a first time investor and I am home hacking in Chattanooga, TN. Great location, bungalow style, single family home with free standing apartment. 

I am under contract- the main house was built in 1920, and was remodeled a few years ago so the interior, electric, and plumbing are new. Foundation is rock solid.  The exterior of both the house and the apartment have a lot of issues that I would like to repair before winter. An urgent item is the roof and guttering- the roof needs to be repaired soon, and when I do that I will need to put guttering on and replace decking, etc. Because the owners did not have guttering, there is rot all around the exterior. I am under contract for 210k after dropping the price for repairs from 225k. The appraisal came back in my favor at 234k. 

Ideally, I would amortize the major repairs to the house over time included in my 30 year fixed. That would be the easiest to manage- I know there are some options to do this, including existing structure updates and potential repair escrows, and a line item at closing to allow for a single contractor to make repairs. I also understand that these aren't approved often. 

I go into underwriting tomorrow as a first time home buyer and need to make a decision either to risk the underwriting process by trying to get the repairs funds from my 30 year conventional or wait for closing and get a HELOC/fixed 2nd to get money for the repairs. The advantage to doing the HELOC/fixed 2nd would be that I could get money at my discretion to make the repairs after closing and potentially have enough to put in to other updates that I wouldn't otherwise have the flexibility on. I don't think the seller is in a position to make the repairs. Can someone help me with the pro's/cons of all options, or suggest another solution if you have an idea? Thanks so much for all the support!

@Mike Garland Thanks! We have already consulted with an attorney and luckily no other siblings in the equation. 

@Phil G. We wouldn't want to see the asset go anywhere, but of course I don't know enough about a reverse mortgage and we both would prefer to pay off this asset first if possible. There is enough equity in that we should be able to reinvest it. 

@Leland Barrow Thanks for the advice- working with the family is definitely never easy and it is something we have talked through and consulted through. I have experience with it in the past which is why we are treading lightly and considering all the what ifs, exit strategies and other contingencies.  We're still speaking in hypotheticals, if all else was perfect how could it be done. 

@Malik Roley Thanks for the reply, yes. She'd like to stay in the house- I'd effectively be her landlord and adjust the payments to cover mortgage payment, taxes, insurance and emergency repairs. 

Hello out there!

I have been putting a plan in action to start investing in real property and I have reached a hump so I am reaching out for some advice. 

I have an opportunity to buy a home in Houston, TX where the owner (my mother) owes $60.000 on a home valued at $450k. My mother can't refinance and is out of options for dropping the payments down now that she is no longer working (she has been in the house for 25 years)...so we had an idea for me to buy the home and rent it out to her at a lower price. This would be mutually beneficial because 1) the monthly payments on the asset would be more affordable and will be kept in the family, eliminating the need to consider a reverse mortgage and 2) I would be able to pull equity out of it in order to invest in another income producing property and 3) would be a better option to avoid estate taxes etc. I am looking nonstop at properties and watching deals go by because I haven't been able to find financing. It has taken two weeks to coordinate with a family friend and I am sick of wasting time. 

The real issue is: is this idea even possible, and if it isn't how do I find a way to make it possible to use the property in Houston to secure cash or financing on another income producing property. The other issue is: are there any recommendations for knowledgable lenders, registered in Texas, that can help me work through the options and get me going quickly. 

Thanks for all recommendations, 

Ariel 

@Eric Pinter Have you done much in Russellville lately? I own some land in Yell County and property on Mount Nebo and had been looking in to investing in Russellville- at least around the University or Skyline Drive area. 

HIi@Eric Pinter, welcome! Just curious where you are are doing your investing in central Arkansas? I had been looking around and wondering what your biggest successes have been? Thanks so much for sharing!