All Forum Posts by: Javier Molina

Brian Mathews Eager, anxious, hungry, motivated. Yes I am. This is a 15-20 year plan that was supposed to have gone in to affect about 2 years ago but due to family matters had to be pushed back. I do plan on staying in the military until retirement, so driving by my property is not going to be an option for me. Also living on base is not an option for me. I am trying to take my time hence why I haven't put in an offer yet and am asking for opinions and advice here as to if I should pull the trigger or not.

William Strong it’s a half full half empty approach I believe. You can see it as paying 100 bucks a month for someone else to live in it, or you can see it as someone else paying 90% of your mortgage and you only pay 36k over the life of the loan for a 150k house...

Jerry W. Thank you very much for your offer to help, I really do appreciate it!!! The house I am looking at now is right outside of the 1% after insurance and taxes as you suggested. Thou it does follow the 1% rule before all that.

Jason Minnich Thank you for all your information for military specific laws. I am going to have to look in to that as it appears nobody else knows about any of these exceptions. My main method of execution was SFH thou as I started to learn the rules and noticed how hard it is to find a home that fits in those rules I started to consider multifamily homes due to it being much easier to find homes that fit the 50% rule. Thou it is not really what I want to do. As multiple people have said they tend to bring a lower quality of tenants and end up causing more issues, compared to a family with 3 kids that can afford a new house with a pool and a Jacuzzi. Regarding multiple industries, the military is the primary source of jobs in this middle of nowhere town. Thou there is the hospital and the college that also employ a heft portion of the population. IF (that's a big if) The FAA decides to put their test site here, it will end up being the best investment I could of ever done. The good news about the tax issue is that I am a resident of CA so I wouldn't have to deal with the out of state investor tax.

Question about CPAs. How much are they? Is it like an annual thing or a yearlong thing? Not exactly sure how they work, all I know is that everyone recommends getting one.

To all that are apologizing about long replies, don't. I appreciate the long thought out responses. Longer the reply the more info in your post, and I am HUNGRY for knowledge lol.

Problem with the auction is that I wasn't able to take a look inside of it, and needed quite a bit of work from looking thru the windows.

So I have taken your advice and moved on and found a 3 bed 1.75 bath built 2007, 1300 sq ft. Very nice. Asking 130k Thinking about offering 110k and see if they accept it. Agent laughed at me. Thing is crunching the numbers I can't spend much more. Rent will be about 1000 to 1100 a month. So even at 110k I am barely making a profit. Reason I am considering this place is because it is very new and nice so it will be much easier to rent than other places. Also I will be VERY hard pressed to find a place in similar condition for the same price even more so cheaper.

I am looking at exit strategies as everyone says. All I can think of is the current buy and hold, (if thats my main strategy can it count as a exit strategy?) or sell it... I won't be any good to refinance the first couple of years, as the refinance costs will end up more than what I have paid off in principle so far. Any other ideas?

Regarding price should I be willing to go to 120k? Them paying all closing costs in the price. House is owned by the VA.

Thanks again!!!

Sorry about the late reply, had to run out of town last minute for family issues...

I see how you got the cash flow rate, how did you get a cap rate? Does that not require a positive cash flow rate to calculate otherwise it would be a negative percentage? Sorry I am new to the game and trying to learn as much as possible.

Regarding VA loans, as long as you move out due to orders you don't have to refinance. I am just not able to take out another VA loan until that one is paid off.

Quick update: I have found a 3 plex home total of 4 bed 4 bath (so 1,1 1,1 2,2 I am assuming) that looks pretty decent and clean via pictures. It is starting auction at 15k and I don't think it will sell for more than 80-90k Using the 50% rule that is just about my limit on how much I should buy it for as well. Problem is that they only take cash, no financing. So I don't know how I could get my hands on this home. Do hard money lenders count as financing to the seller? Any ideas would be greatly appreciated!!! Thanks

For those interested, here is a link to my question. Thank you again!

https://www.biggerpockets.com/forums/311/topics/90622-first-investment-question

So I have been wanting to invest in real estate for a while now, as it is part of my retirement plan. Been waiting for a good time and have finally decided to pull the trigger. Worked quite a few numbers, and found a home that I am about to put an offer on. Well untill yesterday that I was doing a bit more reaserch and found this 2% rule and 50% rule. Now I don't know... With those rules it is impossible to buy a house in this area. Also, I am seeing that the 2% rule was made back when interest rates were double what they are now. So I am looking to get some advice and see if I should go ahead and pull the trigger or back off before it's too late.

The house is a 3 bd 1.75 bath. 1880 Sq ft. Nice home, half carpet half hard wood. Been on the market for over 200 days. Asking price is 157k. They currently owe 123k on their loan. I am using a VA loan so no down, awesome interest rate. I will be asking them to pay for about 10k in closing costs so I figured 135-140k would be a decent offer as I am not willing to go higher than that. Also the average price for such a home is 150-165.

Having done my homework on rental prices the best I can get is about 1050 for that place if I want any chance of renting it out. So the math comes out as this:

For a 140k loan at 3.5% average
629 P&I
131 taxes
67 HOI
-----------
827 Total a month

That leavs 223 a month for Property management (105 a month) maintnence, profit, vacancy and what not.

That makes is kind of tight. I will be living in the property for about 7 months which will give me some time to put away about 6 months of mortgage. (Whis is what I think I should maintain at all times for vacancy and repair purposes)

I can look at this two ways, 1. (the way most of you might look at it) I have a pretty decent chance of having to put some of my money in to this property to keep it afloat, not a lot but still an amount. Or 2. I don't have a cash flow but hey even if I put in 100 bucks a month in to the property Im getting a 140k house for 100 bucks a month that some one else is paying the rest for. In the long run I am still getting a pretty good deal on it.

A little background. I am in the military so I will not be able to buy all my houses in one location, so they will be spread out as I move around. Figure I wll live it the house for a few years then rent it out instead of selling it. The town I am currently looking to buy in is a VERY small town whos whole economy revolves around the base. (Currently a potential location for the next FAA UAV test site which could more than quadruple the population and bring billions to the local economy over the next 10 years but who knows if they will select this as their next location) And lastly I do not have long to sit on this since I will be moving out of the location in about 8-9 months and want to be out of my current rental by the end of my lease July 31st. As well as living in the house for a while before I rent it out to give me time to acumilate my 6 month buffer. The current location is probably one of the best chances I will get at buying my first house since it is a fairly cheap market compared to most other places I will get stationed (Such as San Diego where if I buy my first home there it will be 2-3x the cost and if it goes vacant there I will be in deep sh** while if this one goes vacant I can still keep my self afloat)

Sorry for the long post but its the only way I could paint the full picture so that I can get the most relevent advice on my current predicament. Thank you very much for all of your help and time.

Thank you very much. Will do.

Thank you very much!!!

Where should I post questions? Should I post them here in my own thread or start a new one else where? I am about 48hrs away from putting in an offer on a house and would like to know if I should go thru with it or pull out.

As posted on the title I am trying to become a new investor currently located in Ridgecrest, CA. I am looking to gain advice and potentially mentor-ship to learn as much as possible and minimize stupid decisions as much as possible.

Short term goal: Buy my first house and start off my investment plan.

Long term goal: Own at least 5 houses in 15-20 years

Niche/strategy: SFH, Turn to rentals.

I look forward to hearing from you guys!!!