All Forum Posts by: Dave Green

Quote from @Wale Lawal:

@Dave Green

Here are the three options for generating passive income and scaling up a property portfolio: selling rentals and buying a multifamily property, paying off your primary residence, or holding rentals and maintaining cash flow. A hybrid approach, which involves selling one rental and investing in a multifamily property, is suggested for long-term goals. A fee-only financial planner or real estate-focused CPA can help structure the sale, financing, and new purchase in a tax-efficient way.

Good luck!

Thank you for your comment. Why do you feel that a hybrid approach is best? For the sake of trying to learn and picking your brain, why would it be better to keep one rental and upscale the other instead of selling both and getting a significantly more expensive piece of property and trying to significantly increase cash flow? Also, if this is the approach that we go with, does there ever come a time in your mind where we would sell the other single-family rental and upscale that into another multifamily as well?

Quote from @Jonathan Greene:

Your cashflow is decent for the two investment condos and you have reduced maintenance there because of the HOA (but you have HOA which is a hindrance), but I would rather sell those and trade up to a multi with no HOA. However, you will likely have more maintenance without the HOA as now you have the exterior and grounds to worry about, as well 4 of everything on a 4-plex. I would not pay off your residence's mortgage. What is the gain there?

I tend to agree, I hate to lose all of my passive income just to eliminate my primary mortgage.
just out of curiosity, what makes you say that an HOA is a hindrance? Do you feel that cash flow increases significantly with a trade up such as this to a much more expensive property?

Quote from @Malcomb Stapel:

@Dave Green are you willing to live in the multi-family? If so, it would seem like selling all and scaling up to a nice multi-family asset might be a good option to look into. It will cut out your HOA fees as well.

This is a possibility, but I’m not so sure we’d enjoy living in a multi family. I do enjoy the thought of house hacking a lot, but we really enjoy having our privacy in our current primary residence. This thought has definitely crossed my mind

Quote from @Mark Munson:

Hi @Dave Green

If you sell the rentals, or even just one, you can use the funds to cover the down payment on a DSCR loan. You only need 20% to qualify, along with a credit score typically north of 660. There are obviously other metrics that have to be met, such as the gross monthly rent has to be equal to greater than the total principal, interest, taxes, and insurance; that is the debt service coverage ratio (DSCR). You are in a fine spot financially, at least from what you shared. I am happy to walk you through it if you need advice.

Yes, thank you for the comment! This sounds exactly like what I had in mind. I’ve been reading about DSCR for a few days now and this has been at the forefront of my considerations for what we’d like to do. I’d love to connect, if you don’t mind.

I realize that I probably need to hire a financial expert to truly assist me with this question, but I’d like to ask the community how they’d look at this situation beforehand because my wife and I are relatively new at all of this. I’m looking for some genuine advice on the next investment move here. My wife and I own a condo as our primary residence, we owe 216k on it. We also have 2 investment properties within about a 15 min drive of where we live. Both are condos. One, we owe 130k on, valued around 215k currently, the other, we owe approx 38k on, valued at around 150k. We’re looking at some different options. Ideally, we’d like to sell both of the rentals, and use the cash to place a down payment on a larger multi family home investment property, maybe valued somewhere around 400-600k. We’re relatively new at this. I’m not sure how the financing would work for such a move, being that I have 50k in student loans and 216k owed on the primary residence and work as a traveling nurse on a modest income. I do know that we could come up with about 150k as a down payment. The other option that we considered is selling our rentals and paying off our primary residence mortgage. I can easily come up with the remainder needed to finish off the mortgage, however, that leaves me in a bit of an undesirable spot. Yes, we’d have no mortgage payment, which is huge, but the ultimate goal was to create passive income and scale upwards so that I could eventually retire and spend time with my family. I’d much rather create that reality than simply cutting down our costs and deleting all of our passive income. Of course, there’s the option of holding onto these rentals, as they both cash flow about $400 a month each, but we’ve got what feels like adequate equity to scale up at this time. If you were looking at this situation, what would be the move you’d ultimately decide on, and why? If you were going to hire a professional to speak with, how would you know where to find the right one? We aren’t looking to pay one of those “guru’s” that feed you a bunch of crap. We want real advice to make some real moves. Any info is appreciated, thank you.

Hey there, I know there's already a thread about this, but I read through it and still don't feel like I have a great answer. My question is the same. I am a travel nurse, and I've had trouble getting a mortgage for 2 reasons. #1, my income looks much lower than it is on paper because a large portion of my pay comes from a travel stipend (tax free money for being a travel nurse) and can't be considered by the lender, and #2, my contracts change every 13 weeks, so it appears on paper that I'm unable to show consistent employment, even though I've never had a gap in employment. Does anyone have any suggestions for this? My credit score is 800 and my finances are great, in reality, it's just difficult for me to prove any of that on paper to any potential lenders and I'm on my third try. Located in southeast Michigan.