All Forum Posts by: Daniel Kong

Nicely done. Is there any significance to the yellow boxes?

Thanks @Andrew Postell  . I was a little confused by that. I heard conflicting information, but I guess it just varies by lender. This makes it a lot clearer.  I also feel a lot better now about finding a lender when I will need one, while holding my lines of credit. Too bad you don't lend in the area I'm investing. I almost want to start looking for deals in Texas now just so I can use your services lol. 

Thanks for the advice everyone. 

@Andrew Postell Great solid advice as usual. Gonna call my banks and see how they calculate the minimum payments. One of them charges 2% of my current balance. I'm assuming that when I apply for a loan, the lender will use my maxed out lines for my DTI vs my current balance at the time I am applying. Is that what you would do from your side? Depending on what I'm trying to do, it might make more sense to use hard money or private money.

This looks like it could be the beginning of a bad situation. Once you start down the "Lets do my family member/friend a favor" with some decent money involved it is a slipperly slope. I would suggest you try and convince your girlfriend to separate family and business. Rent out the place for as much as she can get, and if you want to be charitable just give her neice a monthly stipend of like $500 a month or whatever to help them out. That way your girlfriend can see what she is actually doing by lowering the rent, and the expectations of everyone all around will be different. Letting someone stay at your place for cheaper seems like it doesn't cost you anything, but if you are shelling out cash every month, thats a different story. 

@Jon Mark Its really up to the seller if they will offer that or not. Like it was said up there, it might be more attractive to the seller if you offer say 630k to give them an incentive to allow you to put zero down. Another alternative would be to partner on the deal with someone else who could bring in the closing costs/cash reserves or take out a personal line of credit if your credit score/DTI is good enouh.

Hello. I'm opening a few personal lines of credit to do short term BRRRRs. The problem is that now that I have the LOCs open and am borrowing from them, it looks like my credit score is taking a big hit. This may impact my ability to refinance when I need to and I'm wondering if anyone has advice on how to manage this. 

My idea is to find out the date the LOCs report to the credit bureau and then clear them out (pay them down low) just before that date, so that they will report a smaller amount - thus my Credit Score won't take as big a hit. Looking for some strategies on this. Thanks in advance!!

@Jason Malabute Hey Jason. In the article you sent me has the two parts flipped. Usually the 1% rule is the monthly rent divided by the purchase price. So a property renting for $1000, divided by a property that costs $100,000 would be $1000/$100,000 = %1. 

Most markets in general won't meet this %1 rule if you take a random sampling from the entire market. Usually, there where will be pockets however, within a market, that will either get close to the 1% or exceed it. If you just google "Turnkey Properties", you will see a bunch of different places that will sell properties that meet this criteria.  

Price to Rent is just a guideline. Its a quick way to determine if a property will cashflow positive at a glance. Near or above 1% is very promising, but then you have to actually run the numbers yourself to see if the property actually will cashflow. Mortgage, property management, insurance, property taxes, maintenance, utilities etc. 

Echoing @Stanley Bronstein , it might be worth it to go with a CPA at least for the first year. Get everything set up and running - ask a lot of questions. After you laid that initial foundation, and feel more confident, maybe trying to do it yourself the next year. It definitely will cost more with a CPA initially, but getting sound advice on taxes, entity setup, your business structure/strategy on your first year may go a long way to saving you a lot more money down the road. 

Been a Software Developer for 17 years and going. Put a lot of time and energy into making money that way. I read Rich Dad, Poor Dad, which blew my mind. I realized that for all the time and energy I put into my job, my ROI was so capped. Decided just jump straight into RE (part time for now) after that. Its been fun and promising so far!