All Forum Posts by: Dennis Williams

Looks promising. What’s the price on it? Is it still available?

@John Brooks

I have done both. I actually started like you, but wanted to start with a rental unit first. At the time, before I bought the home, I had been renting and moving every year to keep saving for that down payment. Until one day, I asked my daughter if she was going to go outside to make new friends. She said, “What for, we are just going to move next year.”

That hit me hard. So I took the money I was saving and bought a home in an up and coming area in Florida (Winter Garden). I spent the next 3 years training my family on the concept of living in one unit and renting out the rest. We sold the home after 3 years and bought a quadplex. We are currently living in a 2/2 (downsized from a 4/2) and renting out the rest while building a new home in a different city. I say that to say; once we move out of the quad, the rents will pay for both mortgages.

I found a GC that will build at my price and we will have enough equity in both properties to buy another rental after we refinance. My advice to you is start playing investment podcast or books when you are in the car with the family. Some of it will stick.

I have a partner in Mississippi. We are currently transitioning from using our own cash to using private money. However, the current lender we are using didn't have an appraiser that could get the job done in time. We used a local appraiser that didn't give us a true ARV report. He gave the as-is value instead. Which means we are bringing more money to the table than expected.

Please share with us who you use for Private money and or an appraiser for this area. We are ramping up to buy a few more in Jan/Feb.

LOSS*

I'm closing on a quad in a few days that we bought for $450K  at 3.25% that was fully renovated, a $4,000 commission plus $10,000 credit in closing cost. Its on a single street that has 14 quads with the same floor plans. All units are 2/2. Of the units I'm buying, 3 of the units are rented for $1,050, $1,000, and $900. I am occupying the last one. It appraised for $550K in its current state. All units will be renting for $1,100 by March 2021.  

There is another quad 3 lots down for sale at $450K as well. HOWEVER, this one is half renovated and the roof is 14yr old. The owner took it off the market because he wants full price AND paying no closing cost. He'll pay $13,500 commission to me, but he has leased 3 of the units, starting June 1st, at $750 each.  The area is starting to turn according to a few city representatives I met that are developing the new park directly across the street from our street. They also mentioned their group will be buying a few things in the area to help that turn. There is an 100+ unit apartment complex up the street that is income restricted (rent range $800 to $1,100).  

I have a lend that will lend 90% LTV and 100% rehab cost and 7% int. With this information, would you buy this second quad at $450K knowing you can get $1,100 in a year after the $750 lease is done. I'm guess the 2 non-rehabbed units will cost about $5,000 to reno and turn. I will be using the $13,500 towards my closing cost. Since we can get up to 90% of $550K, I may only have to pay traditional closing cost plus points ($15,000). I do plan to refi this property in 6 months at a 4% int or better.

@Remington Lyman

Also some lenders will allow you to do a one year filing if you apply for a conventional loan 10% to 20% down.

@Remington Lyman

In my opinion, the fastest way to qualify for a loan on your own is by getting a W2 job (full time) that is in the same or similar field as your JP job. Most lenders will only require 30 days paystubs and last two year taxes. Otherwise based on your message, you will have to wait two years of reporting income (try not to write everything off at tax time).

I believe if you do this, at that point, the lender will also qualify 75% of the rental income from your units, lowering your Debt to income.

@Don Konipol Thanks for breaking this down for me. It really gave me some insight on what to do next. I am using my VA loan to buy and live in one unit while paying myself the rent cost each month ($1,000). The plan is to pick up one more quad on the same street with 20% down in hope of gaining the same opinion of value in a year. At that point, re-fi both properties, pull out a bit of equity in order to build our home elsewhere using my VA loan :-). Thoughts?

@Amanda Paris I'm still thinking about the HELOC. Three people have suggested it thus far.

@Trent Stone Thanks for the feedback. Yes, I was over the moon. Didn't think it would come in that high.