All Forum Posts by: Brian R.

@Eric X. Thanks for the reply! I know there is no hard and fast rule but when you put up cash offers, what would you say as a rule of thumb you can offer below the asking price? 5% off? 10% off? 15%? I know every property is different but would love to hear what your experience has to say about this.

I am 23 years old with 30k saved. I am looking to invest in Rochester, NY where some SFHs and duplexes are on the market for 30k. Because of my age and that I don't have a high paying salaried job [I work two part time hourly jobs and have little track record with taxes to show a bank], the big obstacle I am facing is getting a mortgage to leverage OPM which I know is one of powers of REI.

Do you think this might be a time where paying all cash for an investment is appropriate? I could see myself, as I have more income to show banks, getting a HELOC [since I would own it outright] to buy the following investment.

All thoughts are welcome!

Thanks, Brian

@Joel Owens Thank you, that is prudent advice and worth as much as numbers. I will adopt your rule as my own too, very valuable!

@James Wise I am definitely not looking to break the law. FYI, my game plan is buying and holding, no flipping for me and minimal repairs is important too. I really want to set myself up for success and have my first investment be a "win". I think that is particularly important being my first investment of hopefully many. If my first deal goes bad, I could see that being a challenge to recover from. The name of my game is Conservative. I might need to forget financing and pay all cash for my first deal 30k + 3k [closing] since financing might be tough. I have cash but no income [I'm fresh out of school with an hourly job but a about 30k saved] You've offered me some worthwhile advice on this FHA matter, if you have any other insight, I welcome it!

@James Wise Thanks for replying do you know if I need to physically be there for the whole year for it to be on the "up and up"? I am thinking about doing some extensive traveling come the end of this summer and might be away for 4-5 months. Would that time, still count for my 12 months to make it all legitimate?

@Bill Gulley Your answer makes perfect sense to me. My only other question, which I posed to James above, is do all 12 of those months have to include me physically in the property? I ask because think summer I am planning to be out of the country for a few months and would love it if that time could go towards my year in the property.

Thank you all for your replies, very helpful!

@Mathew Wray, I totally agree wanting to start of this whole thing on the right foot, I'm 23 years old right now and not looking to knock myself out of the game before I even get started.

I have heard that Owner Occupied means a MINIMUM of 50% of your time is spent there. Would you all say that if I didn't rent out 1 unit [my unit] for a year and spent six months in it and lived elsewhere for the other 6 months [keeping it vacant because it's my primary residence] I would be okay?

@Duncan Taylor I have run the numbers, and conservitably too [15% vacancy, 12% MGMT, 30yr fixed mortgage @6%, utilities like sewer, water, and trash and money for a reserve fund, and operating expenses.] The numbers work it's just a matter of financing.

@Bill Gulley By multifamily I am specifically looking at duplexes. Do you know with the 203k if that money could be used to buy materials AND pay someone else to do the repairs for me? Or is it just for materials?

Hi Kay, I am in a similar place as you, just starting out and looking around for a good opportunity to start off with.

Do you know the amount of taxes on this property?

Also, I would check with rentometer.com on the rents. Yes it is rented out now, but sometimes I have seen landlords inflate that price so it sells to other investors [you] at a higher price. So be cautious of that.

Something I have started to do when I run the numbers and use rentometer.com is hope and shoot for the average rent, but also run the numbers at the low end [the 10th percentile] just to make sure if you're in a bind and want to rent it quickly or if something happens in the market your PITI would still be covered at the low end.

Good luck!

I am thinking about purchasing a multifamily investment in Rochester, NY using an FHA loan so I can take advantage of the 3.5% down [possibly the 203k if it needs some improvements]

I would be doing this and living there [truly as my primary residence] and managing the place... until I finish repairing it up, which might only be a few months. Is this illegal? Or are there minimums you must live somewhere if you take an FHA loan out?

I'd love to stay out of jail. Thank you all!

I love Tim Ferriss' writing and I am guessing many of you have read some of his books. I think it was in his most recent, The 4 Hour Chef, he talks about interviewing experts. I would now like to pose these 4 questions to you all:

1] What do you think the most common mistake beginning REIs make?

2] What do you think the biggest waste of time beginning REIs make?

3] What do you think the most common mistake advanced REIs make?

4] What do you think the biggest waste of time advanced REIs make?

Thanks, Brian

Hey there Bigger Pockets community!

I live in New York City but have been recently made aware of Rochester NY as a place where SFH and MFHs can be purchased sub-50k and command rents usually in excess of 2% per month of the asking price.

My question is, are there anythings about Rochester you feel are worth while knowing about before more seriously considering investing there? I will definitely NOT be purchasing sight unseen. I welcome advice on purchasing in a market you are personally unfamiliar with, and also questions you think valuable asking a real estate agent there.

Thank you all for your time contributing to my pool of knowledge! Looking forward to being able to give some in return someday soon.

Brian

Hi everyone,

My name is Brian, this is my first post here and day one as a Bigger Pockets member. Happy to be joining you all!

The Issue: I want to buy real estate leveraging OPM but have no suitable income to satisfy a lender.

The Goal: Purchase cash flowing real estate without ever needing to get a full time salaried job.

Where I'm at now: I am twenty three years old, just out of college and am supporting myself with different jobs [mostly hired on an independent contractor] and paid hourly. I am looking around upstate New York [Rochester mostly, but Buffalo and Syracuse as well] to purchase a cash flowing property, open to both SFHs and MFHs. I feel confident in my ability to "run the numbers" accounting for things like Management, Vacancies, PITI, Reserve Fund, as well as maintenance.

My issue and question has to do with financing and starting to build my RE investment portfolio. The price range of properties I am looking at are between 25k-40k. I am in the position to pay cash for one property in this price range but realize that wouldn't allow my money to be working as hard as it could compared to leveraging the bank's/lender's money.

The Question: To those creative and experienced out there, I feel there might be a solution to my goals in buying my first investment property in cash. After that, I would 1] start having the cash flow as income [albeit minimal] to show to lenders in the future and 2] I would be able to help finance my next investment buy taking a home equity line of credit from the property I purchased in cash.

Any insight would be greatly appreciated. I look forward to being able to contribute back to this community here at Bigger Pockets!

-Brian