All Forum Posts by: Corby Goade

Our market (Boise) is pretty tight, not as much so as Austin from what I understand. That said, I have a few duplexes and am always looking. It takes time, but a couple times a month something interesting pops up on the MLS. The best advice I can give is for you to find a realtor that will submit any offer you like, with full understanding of what you are trying to do. You'll be a low maintenance client who knows what they are looking for, and they submit many offers for you, knowing full well that they'll only get a small percentage of them. Then, just make offers based on what your goals for the property are, not the asking price.

Most leases have a month to month clause with an increase for that privilidge. Ours have a $100 per month premium to go month to month. I assume your's don't? If not, and your new tenants don't want to sign a new lease, the good news is that you don't have to sign a short term lease with them, either. Once the lease expires, you don't HAVE to accept month to month terms. You can propose a new lease with new terms. If they don't want to accept those terms, they can move out and you can start a search for a new tenant. You aren't evicting them, the lease ended and you both decided to part ways. 

If you want to agree to terms for a month to month agreement, you could just draft a basic addendum to your existing lease adding a month to month clause that you've both agreed to. 

@Corey Smith, thanks for the clarification. Funny, but what you describe is almost exactly what I have done with my RE- BRRRR using a HELOC as a down payment, fix it up, rent it and refinancing to pay the HELOC off. I have mortgages (six of them currently), all traditional and have never used a portfolio lender. I have W2 income, but it's not much- I'd venture to guess that your's is likely more. I don't think you'll need a portfolio lender until you hit 10 mortgages. DTI guidlines will likely be exactly the same for a portfolio lender vs. conventional anyhow. Make sure you buy properties that will cashflow nicely and you should be good to go.

Something you might want to check in to is "Delayed Financing." I am working on a refi using this program right now. It's a conventional refi for investors buying a property with all cash and you can do it immediately after closing or fixing the place up, up to six months after closing. 

Best of luck out there! 

I wouldn't worry much about portfolo loans yet and I wouldn't worry (as far as approaching a bank) about your lack of REI experience- most conventional lenders don't have much REI experience either. If you can pay 25% down, have some cash reserves, good credit and your debt to income ratio is reasonable, you shouldn't have much trouble getting 10 conventional mortgages at market rates. Once you are there, then you'll need a portfolio lender. Most portfolio lenders use the same criteria as conventional banks, it's just that they are willing to give you mortgages over and above 10, at a premium, of course, as long as you prove to be a solid investment. Current rates that I've seen are in the 7.5-9% range.

Out of curiosity- if you have money for a down payment, make a decent W2 income, and have only two mortgages, why are you shopping for a portfolio lender? 

In my state, you lose 75% of the market if you don't allow pets, and I've generally had good tenants with good pets. That said, we don't charge a pet "deposit," because deposits are intended to be refunded. We charge a $250 pet "fee," which is non-refundable and we make it very clear with every tenant. Any damage that the pet does will be covered by the damage deposit, which is generally one month's rent. I've never had a pet owner even discuss the pet fee, they are usually happy to pay it for the right to have their pet in the rental. We do include the pets in the lease and that the addition of any new pets without prior approval are grounds for eviction.

I've never considered charging additional rent for a pet, and haven't heard of that being done in my area. Interesting idea- anyone out there had luck with that, one way or another?

Hi Sergio-

I give everyone the same advice- what I wish I had done, house hack. Buy a multi family that needs a little sweat equity, 1-4 units via conventional financing, live there for a year or two then move out, rent out your unit and do it all over again.

You didn't include your age, but If you were to do this a few times, be patient and buy smart, it's entirely feasible that you could "retire" after a few years. Obviously there is much more to learn and consider in this oversimplified scenario, but that is the road I would start to head down. Best of luck!

Hi Andy- In true BP fashion, I had some investors contact me and offer help- some of it very useful. However, in the meantime, a great deal sort of fell into my lap right here in my area, so I jumped on that and am out of the market for a few months. I may get back on the bandwagon and take another look at Indy in the fall. If you come across anything enlightening, please keep me in the loop. Best of luck!

Hi Jacob-

Best of luck from Boise! Looking forward to updates on your progress.

Hey Trio- First of all, it's great that you have prioritized your education. I wouldn't jeopardize that, so keep on track there. 

There are options for you- getting your first couple loans is much easier than it will be as you get older. There are programs out there for first time home buyers- you can pay VERY little down. I'm not an expert on the Chicago market, but from what I've seen you should be able to get into your first duplex, maybe event your first couple duplexes, for just a few thousand dollars. Where it gets tough, especially if you aren't working full time, is that banks don't give you much credit for rental income, which makes your debt to income ratio look undesirable, at least in their eyes. 

I'd recommend a couple things- work a flexible job where you can earn tips- deliver pizzas, maybe drive an Uber, something like that where you can build up a few thousand bucks in cash for a down payment over a few months. In conjunction, start a relationship with a regional bank or credit union where they understand what your goals are. I'll bet if you connect with some other investors from Chicago on here, they will be able to recommend a few banks for you to check out. If a bank knows and trusts you, they may offer you in house products that have a little more flexibility than a conventional mortgage. It wouldn't hurt to find another local investor that you can do some grunt work for in exchange for some mentoring. 

In any occasion, keep reading and learning. There are infinite ways to be involved in real estate and you can never know too much. Best of luck!

@Trio Martinez, sounds like you have an idea of how you'd like to start. My two cents would be to find a duplex near the university and live in one side and rent the other out. A duplex might be more expensive, but you have to keep in mind that the income from the other side will offset your expenses. In my area, if you are patient, it's possible to buy a duplex where one side will almost pay the entire mortgage. Imagine if you went to college for four years, and moved into another duplex each year? When you graduated, you'd already have passive income from 8 units. That's a great start.