All Forum Posts by: Account Closed

Bump. Anyone willing to chime in here? Thank you.

Hello BP!

I am getting my educational foundation set at the moment, so apologies if this question comes off as amateurish. I also realize this question has been asked here multiple times (I read the threads) but this question is a bit different and I am having a tough time wrapping my head around it. Was hoping I could get some input.

At the moment, I am looking for my first deal. I am currently renting and this deal with be my first home purchase. I am seeking a multifamily unit (most likely a duplex) where I would move into one of the units and rent out the other. I plan on purchasing another unit after a year or two, most likely another multifamily and will probably move once again.

Now here is where I am getting a bit caught up. I have read in multiple places that an FHA loan should be the go-to option for these sorts of purchases. I understand why this makes sense for investors who may not have the cash to put down 20% on a unit. However, what about for those who do have enough cash on hand for the 20% down payment w/ a high credit score?

The monthly payments for the FHA + mortgage insurance is higher than a conventional loan. When I was using the BP Analysis Tool for a few test properties, it was very difficult finding duplexes in my area with semi-decent positive cash flow with mortgage insurance included.

Furthermore, if I continue with my plan moving forward, I hope to purchase another property in a year or two from the first deal. Meaning if I use the FHA for this first deal and decide to finance the second deal with an FHA (if I end up moving) then I will need to refinance the first deal into a conventional loan and use the FHA on the second (I believe). With this comes additional costs for the refinancing (I would assume), not to mention I would have to pay down some of the debt on the first property with cash because I would not imagine my equity to raise from 3.5% to 20% to 1-2 years.

At this stage, I am looking for any feedback here. I think I have my facts straight, but I could also be missing some key pieces of information. I am trying to determine what the best path is for me moving forward, before really diving in.

Thanks in advance.

-Dennis

Thanks @Patrick Wheeler , very helpful! One follow-up question if you don't mind.

If you do find an off-market property for a client, how do the fee structures and tasks work on your end? Let's assume the seller does not have a selling agent representing them. How (if at all) would your responsibilities differ in this sort of circumstance? Since there is no selling agent, would you work directly with the seller? I am trying to get an understanding of how this would work.

The reason why I am asking BTW is I assume I am going to have to find a property off-market. However, I have not had any previous experience purchasing property so having an agent representing on my end would be beneficial. Not only to ensure the process is handled correctly but also for piece of mind.

Thanks!

Thanks @Patrick Wheeler ! Yeah, from everything I have heard & read it seems that once a property anywhere near Boston hits the MLS, it is already too late. My plan is to try and score a property off-market before it reaches the MLS.

One question that I have had (and I imagine you have some insight into) is how do real estate agents assist with clients that are primarily seeking off-market properties for purchase? Say for example a client of yours ends up finding an off-market property with a motivated buyer and they decide to sell. If and how does your client interact with you and at what stage (if any). What if the seller doesn't have an agent? How do the fees work out?

There is plenty of material online for the seller-buyer process w/ agents via MLS but not as much for this situation...which is where I plan on heading.

@Alexander Zurn Can you please update this thread after you speak with the tenants on your decision and describe how it went? I am very interested to hear how it worked out for you. Good luck!

Hey @Justin Repp ! 

In all honesty, I am beginning the process of narrowing that down now. I needed to get my head wrapped around the education piece first, I didn't want to get ahead of myself!

I do know I need to be within the 495 belt (yes,I realize that is a huge area) and I also need to be close to a Commuter Line rail to Boston. As I work full time (and plan on continuing to do so for the time being), I will need decent public transit access for at least this property.

To rattle off some towns/cities I know I will be investigating further include (in no particular order): Waltham, Newton, Framingham, Natick, Marlboro, Westboro, Lincoln, Ashland, Concord, Needham, Wayland.

@John Mathewson - Thank you for the greeting and much appreciated!

@Ricky Beliveau - Fantastic! I have a few questions right off the top that I am curious to get your feedback on and how you went about it. Will DM you.

@Mark Nolan - Appreciate the link. Added it to my laundry list of resources to keep my eye on!

Hello BP!

I have been lurking and increasing my REI education before diving in...

After months of consistently reading books/articles/guides/forums and listening to BP podcasts, I feel like I am beginning to get there! I wanted to gain a semi-solid (there is so much to learn!) education before introducing myself and moving forward. So here we are.

I have begun to formulate a plan for my first deal. By the end of 2017 I plan on purchasing a multifamily property with positive cash flow located near Boston, MA (ultimately, inside the 495 belt). I currently rent, so I will be using the multifamily property to house hack my way into my first property, most likely using an FHA loan. I am seeking a B-C property that needs a bit of cosmetic work, but nothing with substantial flipping or outrageous rehab costs, located in a B neighborhood. I plan on rehabbing the unit(s) as soon as I purchase the property, increase the equity and rent at a higher rate.

I am still trying to figure out my exit strategies but I am leaning toward refinancing the FHA after one year and using some cash reserves to house hack into a second property, again utilizing an FHA loan.

I already have a bunch of questions and hope the BP community can assist me as I continue to build out this plan and execute on my first deal in MA. I need the help!

-Dennis