All Forum Posts by: Dyanne C.

I've always been a saver and what has helped me the most is automating everything. Set up automatic deposits to your savings account on payday. I would start with at least 10% of your income. Focus on paying off all credit card debt as well, and free up as much of your income as possible by cutting your bills and spending. Pack a lunch, downgrade your phone plan, etc. 

At my job lunch seems to be a big ticket item. Many of my coworkers spend $50-60 a week on lunch plus regular groceries. That's huge to me, think of how much faster your savings will grow with that extra $200?

I believe the lender I'm working with now is using my W2 only, which although it's pretty conservative to me it also makes sense since it'll be my first rental. From what I've read some lenders don't count on rental income until it's shown on your tax return. So future rental income isn't being considered.

@Aaron Chapman The lender I'm working with is the one who stated my DTI would be at exactly 45% if I added a 2nd property at 50k. The credit card debt is on multiple cards, so the minimum payments add up. I am pretty anti debt as well, the only reason I have been carrying this debt this long is because it's all 0%. I intended to pay it off as soon as the promotional period ends. I preferred to keep more cash as a reserve in the meantime.

Thanks @Account Closed have definitely been very helpful!

Hi everyone,

I have a mortgage on my primary home for about 90k and it is worth about 110k. I only put 5% down because I wanted to hold on to the cash for future investments, it's luckily appreciated a bit which is how I've built some equity, but not enough to pull from.

I also carry a small amount of credit card debt which is at 0% interest but I'm considering paying down just to help with my DTI. As it is now I've been approved for conventional financing for a home with a purchase price of 50k and 25% down.

I am not going to invest in Miami since there is now way I'll get anywhere with those numbers, although ironically when I applied here I was approved based on the market rents, I would have been fine if the mortgage was 75% of the rent, I just couldn't find anything that could cash flow after insurance/taxes.

So instead I'm investing out of state. Specifically Cleveland, OH, but I'm trying to decide if I take some of the cash and pay off all the cards (6k) or just move forward with a 50k home and buy property #2 in about 6 months.

OR have I started too early and should I sit back and save more cash? 

Ah owner financing. :) I somehow missed that in the first post, must be tired. I've been going through conventional, hopefully will find something through owner financing soon. The few deals I've seen with owner financing ask for more down, so I think you have a solid deal here. 

Does it need any repairs up front? If all the big ticket items check out I think you'll be fine. 

Only thing I'm confused about is how you are getting it for 5% down. The best I can find is 20-25% down! 

A good place to start is to look at properties that will rent for at least 1% of the purchase price. 100k home should rent for at least 1k.

That really doesn't guarantee anything until you break it down expense by expense, but its a really good way to eyeball it and filter out potential properties. The closer you get to 2% the better it'll likely be. They call these the 1% and 2% "rules" which is just a rule of thumb.

I'm facing this issue now as well. I'm looking for my first property but I'm already worried about how I'll be able to afford my second.  Right now I'm leaning towards borrowing from my 403, and after that I guess it's back to saving, but hopefully I'll have two cash flowing rentals to help along the way.

Great interview, and I hadn't heard of the 2-5-7 method, but I love it. 

The idea of getting all sorts of creative financing after house #10 makes me a little nervous. Love the idea of free and clear investments.