All Forum Posts by: Billy Houston

Thank you to everyone who responded, I'll be reaching out to shop rates and see what options are available based off my personal situation.

What does the DSCR rates look like in comparison to conventional rates, as higher prices and rates will impact margins. Rates impact the margin available in this market, so a $250k home would only see 200-300 month profit without allocating for repairs or vacancy. Would this be considered to tight for DSCR?

I used Stessa for my rehab, the ease of photographing the receipt and adding to the project really made it easy. I could review the stuff for the day or week and adjust the categories then if needed.

I used a single CC for supplies, and a single checking account for all labor. providing the ability to match back expenses without having to check a bunch of different accounts.

You could do this with different cards for each project, and a labor bank account for each project. This removes the problem by isolating projects.

I am new to the rental game, kinda. I rented to my parents for 15+ years and when they past I rehabbed the house and sold it for $120k profit. It worked well because it was a rental they were renting for someone else, when the land lor decided to sell I didn't want them to move so I bought it. They paid $100 over mortgage but saved $400 month over the previous rent. With my limited experience explained, here's the situation.

I have ear marked a good amount to start real estate investing. I have a very limited area I want to buy in because I require a school district score of 7-8 through all years. in North West Indiana that covers about 4-5 areas. This is how my parents rented for decades when we lost our first house after my father became sick, giving us an education beyond our house buying ability.

The houses in these areas always multiple offers and the financing I have set up requires a seller concession of 2%. This is very limiting when buyer get multiple offers.

I have the funds to buy with cash, but I am not sure how a DSCR or Cash out refi would work, and if it would limit my future funding to the point of being overly restrictive. Example with conventional I have 20% down, if the refi requires 30% to stay in then the extra 10% is limiting.

Rents in the areas I am looking come in on average $2000 mo. for a place costing $250k. This is not great compared to areas like Gary Indiana where rent is $1500 on a place costing $100k but the social advantage makes me feel better as less investors are willing take lower profits (less land lord competition) - and I know the returns will come in equity in the areas I want to invest.

So the core questions - 

1. would DSCR work well for me?

2. is it different then a Cash out refi?

3. Is there a better option that I don't even see currently?

4, advice and general suggestions?

Crown Point, IN here...

There are advantages and disadvantages like any area. Small towns have more limited options on house availability, and if you land in a town with a single powerhouse buyer you can find yourself picking up the leftovers. one of the big benifits is that same ability to control the market, I get sellers who call direct knowing i have a house in their area. Contractors tend to be cheaper, but day labor is hard to find.