All Forum Posts by: David Rutledge

So you can actually refi a property even if you use your own cash to complete the full purchase up front? I have never heard of that.

I wanted to get some opinions. 

I am looking at buying a very cheap multi family property in the coming months. I am looking anywhere from 20K - 80K. I am wondering if I should go ahead and just buy something that I do not need to take a loan out on (under 40K) and therefore obviously have no mortgage payments and potentially better cash flow initially or whether it is smarter to take out a small mortgage and buy a property worth closer to 80K. Cash flow may not be as good but I will be getting into a more valuable property and leveraging the cash that I have.

Also, does anyone have any experience taking out very small personal loans (under 20K) to fund real estate? I am wondering if these may be an option worth exploring if I found something where I was only 15K - 20K short instead of taking out a 30 year mortgage. 

I am a newbie so any advice or insight would be great.

Thanks

David

Good morning,

I am going to make my next purchase in the next few months either for my own primary residence in CA or another multi family (2 - 4 units) investment property out of state (I bought my first two in the summer of last year).

I have been able to secure financing if I go the primary residence route but I am hitting some road blocks on the investment loan.

I only want to buy something worth 60 - 80K and my loan will only be 75% of that so I am looking at a loan worth 60K max. The few lenders I have called have indicated that they do not fund loans that small.

Does anyone know where/how I can find lenders who would be willing to offer such small loans for investment properties? Ideally I would like a nationwide lender as I am still unsure on which state I will buy in (NC, FL, OH, IN are my main options)

Alternatively should I be looking at a personal loan rather than a home loan for this kind of small purchase?

I have never bought a property this cheap before so I am unsure of my options or what the best route for me would be. 

If anyone knows where/who I can ask please let me know. Any information or guidance would be appreciated.

Thanks so much.

David

Thanks so much for the info Chris, very helpful mate. 

I apologize for the long post but I was hoping to get some opinions and advice from some other investors.

I am very new to the investment game, I have been saving for years and last year I bit the bullet and purchased two investment properties out of state (I live in OC in CA). I have been really pleased with my two purchases and I have experienced positive cash flow on both my properties. I bought a SFR in Charlotte, NC and a duplex in IN. I have two great property management companies in place in each state and I am very happy with how everything is playing out thus far.

I still have around $25000 - $30 000 left in savings and I had always planned to make another purchase this summer. I only have enough for one more purchase for the foreseeable future. Until I can get a home equity line of credit or refi on one of my loans etc...

I had always thought I would simply go ahead and purchase another out of state investment that will immediately cash flow (Ideally a multi family if possible). If I was to do that I would be looking at something worth around $100000 and would need to put a 25% dep down which in turn would wipe out the rest of my savings.

An alternative option that I have been researching more lately would be to take out an FHA loan and actually buy a primary residence in the OC or surrounding areas which I would live in and possible rent out any extra rooms for a few years before turning it into a rental. This way I can leverage my savings by only putting 3.5% down and purchasing something worth up to $400 000. The down side is of course that my rental income would not come close to meeting the mortgage and I would obviously be unable to cash flow.

My plan moving forward is to build my real estate portfolio as much as possible so the idea of leveraging my money to purchase more valuable real estate is appealing to me in the long run.

I am just in the beginning stages of figuring out my next move but these are the two options I am looking at. I would love to hear some advice or insight from others with more knowledge and experience than myself just to get some different opinions on what you guys feel would be a smart strategy for me at this point. 

Any advice or guidance would be very much appreciated.

Thanks so much for reading.

David

After doing a little more research it seems that portfolio lenders are my best bet for my situation at this point.

I am new to all this, can anyone tell me how I can find portfolio lenders in my area and how can I distinguish between a regular lender and portfolio?

Thanks in advance.

David

Thanks Austin. 

Thanks so much everyone, for all your insight. All of this information is really giving me a clear picture of how this situation is likely to play out.

I keep hearing that lenders will count 75%. One of my properties has a 12 month lease while the other is month to month.

Will lenders still recognize the income from the month to month lease if I can show a trail of that rental income?

Thanks again everyone!

Hi Ralph,

Thanks so much for all that info. My rentals will not show up on my tax either so I am guessing I may be in a similar situation as you.

My loans for all around $100 000 and the next purchase should be about the same so hopefully the small amount will help.

I dont plan to go with banks as I find they are much more conservative when it comes to approving a loan. Hopefully I can find a lender that will give me a loan even if my rentals dont show up on my tax returns yet.

Thanks so much for your insight. I appreciate your time.

David

Thanks so much for your help Paul. Very much appreciated!