All Forum Posts by: Caleb Scott

 i've saved 20k and I found a multifamily for sale, that when rented out fully, and renovated slightly in the one occupied unit could net about 1600 a month in rents for a 1300 a month mortgage. Though its in a bad neighborhood. by that I mean low income, a lot of multifamily, and it is near the campus, but some of messed up cars in yards, loitering people on the streets etc.... I cant afford much. But could this be a good intro to investing and offer a chance to scale upwards, or is being in a bad neighborhood not worth it? its been the first deal i can afford that would actually cash flow i have seen in about a year that is also move in ready. Usually the duplexes in my price range need about 30k minimum work to be legally livable, so this is a shock. But I am unsure of the implications of the neighborhood. any advice would be much appreciated. I have to find a way to make this 20k cash flow, because I am soon to move out and marry, and my only chance to escape living paycheck to paycheck is to do this first investment, save all the cashflow, and put it into a second one, and so forth. Let me know what you think.

These are all good points I appreciate it. What if I was to rent for now, and keep saving my down payment for an outright rental property multifamily down the road? It’s basically that, or hold it, make minor renovations over a few year period, and sell in a couple years as it’s looking like the mortgage rates and rent rates are just not going to match up. The Relator said paying towards the principal and refinancing for a lower rate could secure a lower mortgage in a few years, but I don’t understand how to calculate the exact rates and that worries me. Plus how do I know rates will go down?

I was trying to scrape together a down payment to have a chance to build some wealth. I heard this strategy in some video of this man talking about using FHA loans for 3.5% down and some strategy where you can level up your home every few years. So I moved back in with parents and saved for a year. But I think this plan was from when renting was more expensive than buying. Now mortgage is 1,300$ for a house that rents for 900$. Unless anyone is familiar with somehow to still be able to put less that 5% down and walk away with a cash flowing rental, maybe I will just rent, and put my savings into another business venture to hopefully create some cashflow to live on if selling in a few years also isn't a good bet.

The tricky part is my mortgage would be about 1,200$ and the rents of the area is more like 950-1000$ so that’s been a big discouraging factor as I believe if In 2 years I could find a way to reduce my mortgage to allow for renting it out for cashflow I would feel better, but as it looks I don’t see anything on the market That would work for long term rentals for a 3% downer. Time to start learning to flip! That’s why I was curious if I could just sell it worst comes to worst and get my equity back out. And if not rent it at a loss until the market improves potentially?

House hacking was my original plan, looks great on paper but just doesn’t work out. we sat out 2 years waiting for a multifamily and saving. There’s not many in my small rural town and When the numbers work it’s because the place needs totally renovated. The ones that are livable are way over my price range. There’s only been a handful for years of searching In my area and they almost always need gutted. I’ve been in a relationship 5 years so I need a home to get married in and be nice for my partner. If I was a single guy i wouldn’t care if I live in a rougher place but I have more than me to care for now. Trying to find the best way I can provide a nice home for my girlfriend at the same time not totally mess myself up in the future. We thought since I can barely get us into a livable home for 150k at 5% down like 13k maybe every 2 years we could sell and level up. Technically like a live in flip. We’re coming to the city in 2 years maybe there will be more opportunity there. Should I just eat it and pay rent?

Me and my girlfriend need to be in town for 2 more years before moving for her masters degree program. We have saved up a down payment living with parents, and are ready to move in. Should we just rent? My family said it would be a shame to lose 24k in rents the next 2 years and that I should buy, because what if we could buy a nice home, get two years out of it as a primary residence, then at the end either rent it out (If I could get lucky and find a way to make a 1,250$ mortgage for an area that rents for like 950-1000$ work) or in the likely scenario I cannot get my mortgage rate down to 800$ in two years, we could sell. And make back the 15-20k we sunk into it and maybe then some? Is this reasonable? Or are there ways to decrease a mortgage like that? Thank you much, thanks!

 Thank you for that input, I would not have foreseen that, the property is 60k and actually livable, but likely the best we are looking at would be maybe 70k value after I paint and decorate it attractively. So if cash out REFI is my strategy for pulling my money out, maybe I should avoid this deal then.

Haha I like your point. BRRSRR should be the title. Okay, but if my math is correct, i should be able to get my money out of it a year in, and who knows, it may appreciate a little in that time. So a year in, I can get my second property, and if that is fair enough, i think I may just go for it. Thanks for the input.

if you buy a property for 60k, you put about 12k down, and the value does not increase, but you get a tenant, and wait 6 months until you have about 15k equity, in theory, could I get a cash out refinance and pull my money back out to have it keep on moving? I got rid of my apartment and all my expenses so I could save from my 2 jobs. Now I need to find a way to get that money working for me, so I can cover the cost of living for myself, so I am free to go full time with my creative business, and will have a safety net incase it ever stops producing. I am a 3 safety net kind of guy and my goal is to avoid having to work a job for money. All the multifamily that come up for the FHA house hacking strategy in my area seem to still leave me paying about what i would for an apartment after putting a tenant in one unit and living in the other, and its a small area so they do not surface too often, especially good deals. I very much appreciate the insight as I continue to learn and strategize. Just wanted to ask the pros if there is any potential realism to this idea.

I've read a book on BRRRR but I still have some questions. All of it makes since to me except the beginning. So you are finding a fixer upper, for this you cannot use traditional financing. A friend gave me a private lenders info, but I need to understand how this works. Say you have a $40,000 house. I think the private lender does 10% interest with a baloon payment at a year.

Do I still need to pay a down payment? And assuming $20,000 for rehab costs. So my total loan would be $60,000. How much would I be paying monthly at this time? And when I pay it off after the refi is it just the 60k I borrowed or is this where I add the 10% interest to the total? Do I pay a down payment plus the interest when I pay it off?

So would I pay 6,000 down to the private lender at the beginning for down payment…

Then rehab the place over 6 months then refi for an ARV of say $100,000 with a small local bank I have lined up. 0.70% on a cash out refi = $70,000 so at this point I could pay off the private lender for the 60k and have 10k left over at the 6 month mark?

if anyone could explain the beginning of a brrrr with a private lender it would be greatly appreciated thanks!