All Forum Posts by: Oliver Trojahn

We currently own 4 rental properties (SFR's). We buy them at 50-75k and they rent between $1,000 and $1,200. A type neighborhoods with great schools. I want to increase our portfolio to 16 total houses which would max us out on our 10 loan max rule, I want this done in three years. We now have to put 25% down and have been getting some private interest (friends/family) to invest with us. We will be using their money for all down-payments.

The rate for the down-payment funding is 10% annually. We only pay the interest earned each year in January and will return the principle when we decide to pay it off the loan. No minimum loan term or length

Do these seem like good terms for us to finance down-payments and continue to buy properties?

I have some concerns of being leveraged. But I think i need to continue to scoop up SFR's in this market and max out my conventional lending ASAP.

All thoughts are greatly appreciated. I would consider other options as well to get to 16 properties. We plan to buy a house once every three months or so alternating who's name it is under.

PM me. I have a broker that can do 5-10 conventionally. There should be a lot of brokers out there that can do this. If not, they don't know the rules and that is ashame. I know 3 in my area that can do conventional loans up to 10. You will need 25% down and reserves etc.

Definitely rent the property out. Before you move out obtain a HELOC loan against your property. This will allow you to tap your trapped equity before it becomes non owner occupant.

Have the HELOC just in case you need it:)

I love the idea of using 401k money to help invest in real estate. Does this 3.25% interest go back to you? Your paying yourself back right?

For the second question by Sam. I would recommend getting your financing lined up first always. If you do not your just a tire kicker and agents/sellers wont take you seriously.

As a first time investor I would recommend a standard conventional loan with 20% down. This is a safe way to get started in my opinion. However, you will need 20% down, closing costs, plus reserves.

I am in a similar situation but just have one personal residence and looking to purchase another while renting my existing one out. My lender told me if I have 25% equity in my personal residence we can count the rent towards your next purchase, hence, eliminating the current payment. This is allowed with no land lording experience. This rule does not help me as I only have 21% equity. I have to qualify for both mortgages at this point. I have land lording experience etc so my plan is to purchase a rehabber in my target area with a portfolio loan. In three months (with primary being rented out) I can refinance into a conventional 30. Most likely with little out of pocket.

The three months will work for me as I have three years land lording experience and at that point they will accept three months bank statements showing rent collected and a lease.

If you have 25% equity in both houses you may be able to count your rental income. This is what I have been told by my guy. You will also have to pay for two appraisals to prove the 25% equity.

I purchase them with 20% down using conventional financing.

That sounds great but i don't think I could possible purchase anything more than a 24 unit place max in my market. There are management companies out here that will charge around 10% gross rents regardless of number of units. It can be one or 1,000. The 2-3% rule would include the cost of professional management in its equation. Obviously, due diligence is needed to further understand the actual expenses on an apartment building.

I live and invest currently in the Kansas City area. Great to here you getting started. Tell me more about your plans I am sure I can help.

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