All Forum Posts by: Dakota Rice

@Jason Crittenden thanks for the reply. I have someone in mind to approach on a private loan which we would be able to refinance out of later if we wanted to. I’m also thinking about contacting our current tenant and seeing if they would want to resign their lease for a longer term which would then allow the banks to use that toward our income. My wife isn’t comfortable with the hard money loans and so I am trying to think of every other possible way to get the deal done. I should hear back from the banks in the next few days to see what they need from me as well. Thanks for the input!

What tips/suggestions do you guys have for getting approved for a loan with most of my income coming from commissions on a job I’ve had just over a year?

My situation: between my wife and I our income is about $4200 a month in salary/base pay. I also make about $3500 in commissions. We currently own a duplex that has about 20% equity and brings in enough income from the basement unit to almost cover the mortgage. One of the lenders I talked to this last week stated that with the new COVID regulations they wouldn’t be able to count my rent as income due to it not being signed to a year contract.

We would like to buy a second property, owner-occupy it, and rent out the current unit we live in. What have you guys done when you/clients/friends have run into the issue of financing with commissions income before the two years of work history?

My brother just gave me the run down on a property he would like to buy. It’s 8.5 acres in southern Idaho. The property has a 24x36 insulated shop, along with a rundown cabin and garage. The owners are an older couple who have retired and had squatters in the place previously. They want around 200k, and won’t seller carry. The owners have posted an add on Facebook about the property but it has not hit the mls yet.

My brother does not have any money for a down payment and would have to sell a vehicle to come up with around 10k. I have mentioned the urgency of getting the property under contract, because for that low of a price a cash buyer could snatch it up at any moment.

What do you guys think? How can my brother go about financing this property with little to no money? Would a local bank loan on the lands’ appraised value since the only building with much value would be the shop?

Thanks for all the great tips guys, I'm really learning a lot here. Before getting our last mortgage I checked with a community bank, a credit union, and a mortgage lender to see about getting conventional financing for up to a 4 unit. All three told me we would have to do a commercial loan with a larger down payment for anything over a duplex. I already reached out to another mortgage lender on financing this second property and was told he could get it done for us, especially since we already have  a lease in place for our current residence. If that doesn't pan out I'll check elsewhere until I find a way to get property #2 funded.

@Jaysen Medhurst thanks for the reply.

My current house was bought in poor condition in b- area of town. We paid 165k and put around 13k in improvements into it. We rent out the basement to traveling nurses for 1000 a month which nearly covers our mortgage. If we move and rent the top we will cash flow around 700 on the property.

In SD you have to have a commercial loan on anything above two units, and due to the lack of 30% down we chose to go the route we went with the SFR. We would like to repeat the process one more time and then possibly look at refinancing in another year to pull money out for a down payment on a 5-8 unit. My DTI ratio is below 40%, and we have been living/rehabbing on just my salary while my wife finished nursing school. Starting next month we will have her salary to help qualify for another loan. I just don't want to have to wait 6+ months of stashing away her salary for a down. I'd rather purchase another project and live-in/fix/rent out during that time.

I currently live in a single family house that I am house hacking with my wife. We bought it with a low down payment conventional mortgage. After being in it for nearly a year, we would like to purchase another property and do something similar there. We don’t have enough funds to do 25% down on the next property (which we were told we would need by the lender). I haven’t yet talked to another lender in the area, but I wanted to see if you guys had any thoughts first. We would like to do another low down payment so we can keep our reserves for repairs. Would we need to try and refinance our current house to see if all our sweat equity there would get us up to 20-25% on that loan in order to go get another low down payment on the next property? What are your thought/strategies?

Thanks!

Thanks Andrew, I appreciate it!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $165,000
Cash invested: $10,000

My wife and I bought this single family house last fall with the intention of house hacking it. We live upstairs and will rent out the basement which has a separate entrance. We have spent the last 5 months doing all the remodeling/repairs ourselves. It just went on the mark a few weeks ago and we are currently processing applications for our first renters. It is furnished and includes utilities to appeal to traveling nurses. Once rented, it will cover all but $19 of our mortgage.

What made you interested in investing in this type of deal?

Since it had a separate entrance for the basement, I knew we could house hack it. The property was also in a great area, but needed quite a bit of work done to make it attractive to potential renters.

How did you find this deal and how did you negotiate it?

MLS, just submitted an offer through our agent.

How did you finance this deal?

Owner occupied conventional loan with 3% down.

How did you add value to the deal?

New paint and texture to all the walls. Both bathrooms were full gut and new tile installed. All new flooring downstairs. Egress window in basement bedroom.

What was the outcome?

Should have a renter in place in the next few weeks which will cover most of the mortgage.

Lessons learned? Challenges?

The rehab took much longer then I expected. Learning how to do the tiling, and putting in the egress window took up a lot of the time invested.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I used Christian Morrison at Keller Williams, and Carey Gardner at CMG Financial. Both were great to work with, and I'll use them again in the future for purchases in the area.

@Eric Wang

My wife and I are currently chipping away on rehabbing our first place. I have a full time job and she is full time in school, so we spend any extra time we have working on our property. I consider myself fairly handy, but I rely heavily on YouTube for all my rehab questions or concerns. The one thing I have noticed though is that everything is taking us about three times as long as we had originally planned. It has been frustrating at times, but I’m at grateful that we decided to just start in the first place. Good luck moving forward!

@Shamus Samerdyke I would like some more information on your tax deeded properties in South Dakota. Particularly the ones in Pennington County, or near Rapid City.

Thank you!