All Forum Posts by: Account Closed

There are companies offering non-conforming loan products which can get you in the 10% DP range. Keep in mind that you will be paying more interest, but it's nothing close to hard money interest.

I only know of the one that I have been in contact with, but I'm sure there are hundreds. I'm not going to post the name here because I don't advertise for free. PM me if you are really interested.

Doesn't it make sense to tip the individual contractors rather than the GC? I tip the bartender, not the manager, for a stiff drink.

Originally posted by @Mike H.:

Yea. I would agree with one of those latter posts. Give everyone an application. If they submit the application and they look good, I tell them they are qualified and the house is theirs IF they want it. But I also tell them the house isn't locked up until I receive a hold deposit.

I keep doing showings until I get a hold deposit from someone I've qualified. What you don't want to do is tell someone the house is theirs and then tell everybody else its rented. And then a week later, find out the applicant you picked isn't going to rent from you after all.

Then you have to start all over and probably could have had someone else in the previous group locked in by now. Typically if you call them back, it'll be too late.

So I never tell anyone its rented or stop showings until I receive that hold deposit.

The hold deposit is not some additional fee - its a portion of their security deposit paid in advance. If they back out later, though, I keep it.

You'll find out real quick who is serious and who isn't. Its also a bit of a red flag if they tell you they need a week or so to come up with the $500.  When that happens, I am typically dying for someone else to qualify and put up the money to beat them out.

A few years back, I got a good deal on a near new construction house. First applicant saw it on friday and was fantastic. Nurse with great income and job history. Husband had good job too. But then they said they couldn't get the deposit to me til monday. Hmmmmm.  Somebody came and looked at it on sunday. They were great too. Filled out the app, I ran the stuff, offered to them, and they got me the deposit the same day.

Told the nurse/family and they were beside themself. Told me how much they wanted it and that I should have held it for them and then she said she was going to hurt herself she was so upset and it would be my fault. Not exactly what I want to hear knowing nurses are the ones that are helping people. I tried telling her there would be other houses but this lady was just crazed. 

So it can be a bit tricky to do it this way, but ultimately, requiring that hold deposit will let you eliminate the risk of a tire kicker no showing on you when it comes to pay and you've already told everyone the house is rented.

I believe you dodged a bullet there...

My question for you, Mike, is what paperwork have they signed at the time that they are giving you the hold deposit? Have they signed the lease by that time?? 

Originally posted by @Steve Milford:

If I bought a first property and didn't need the cash flow, I would reinvest that money into paying down that mortgage.

Why? Paying down your mortgage is not an investment, it is the opposite of an investment. An investment is something that will generate income or appreciate. Paying down your principal does neither.

Originally posted by @Kyle Regitz:

Originally posted by @Account Closed:

Originally posted by @Kyle Regitz:

 I'm tired of flushing rent money down the drain every month, but 18 months probably wouldn't be long enough to cover closing costs, unless I'm able to force a heck of a lot of equity. 

What did you mean by this? Closing costs generally refer to the costs the buyer assumes when purchasing a property. Underwriting fees, origination fee, ect.. This is to be payed up-front unless rolled into the mortgage.

Do you mean selling costs (agent commission and title transfer, ect..)? The answer is to not sell it =). If it cashflows with property management and proper setting-aside of reserves, then there is no reason to sell!

If you are wondering what you will qualify for, just call any lender or broker and have them run some rough numbers. You can also do it yourself. 

Total monthly debt servicing (1% of student loan balance + car payment + minimum credit card payment + any other monthly debts)  / Total monthly income before tax

EDIT: For house-hacking add 75% of the potential rental income from the other units to your monthly income!

This value generally should be under 0.43 (someone correct me if I'm wrong).

Yes, sorry I meant the selling costs. Yeah, that's definitely the route I'd want to take (to hold onto it) and if my analysis is done correctly upfront to factor in property mgmt, I could own the property no matter where I live.

Do banks look for a particular debt servicing ratio?

Yes, for FHA loans and (I think) all fannie-mae type loans, they want to see under 43% debt-to-income. There are other options for you, but they cannot beat FHA for low downpayment and interest rate.

Originally posted by @Kyle Regitz:

 I'm tired of flushing rent money down the drain every month, but 18 months probably wouldn't be long enough to cover closing costs, unless I'm able to force a heck of a lot of equity. 

What did you mean by this? Closing costs generally refer to the costs the buyer assumes when purchasing a property. Underwriting fees, origination fee, ect.. This is to be payed up-front unless rolled into the mortgage.

Do you mean selling costs (agent commission and title transfer, ect..)? The answer is to not sell it =). If it cashflows with property management and proper setting-aside of reserves, then there is no reason to sell!

If you are wondering what you will qualify for, just call any lender or broker and have them run some rough numbers. You can also do it yourself. 

Total monthly debt servicing (1% of student loan balance + car payment + minimum credit card payment + any other monthly debts)  / Total monthly income before tax

EDIT: For house-hacking add 75% of the potential rental income from the other units to your monthly income!

This value generally should be under 0.43 (someone correct me if I'm wrong).

Nobody is going to take a 14 year old seriously in almost any business. Nobody (except family) is going to give any amount of capital to a 14 year old to invest. A 14 year old should not be knocking on doors or looking for leads. I'm really sorry to say these things, but there are FAR too many people that have given unrealistic advice to this kid. This is like the 4th or 5th thread. @Michael Kantar If you want to make some cash, you can probably get a job at a lawn & landscape company or mcdonalds or something of that nature. Even that will be tough at 14. See if your parents have any connections. I know for sure this isn't what you wanted to hear. I have a mind like yours and I get obsessed with things too. For now just keep learning for a couple years. I only speak the truth.

.

Pay attention to whether the law states that you have to disclose this information if you are renting or selling.

Nobody has actually asked @Raeshelle C. how she plans to use 1031 to grow 10k to 200k-1m. How is it that you think 1031 exchanges work?

I'll tell you my understanding. 1031 exchanges are a tool, not a strategy (like flipping, brrr, ect.). It's simply a way of not paying capital gains on any profit from a property sale, and instead rolling that profit into another property withing a short time window. There's no secret, nothing magical.

You need to check yourself. Can't tell you nothin! This community is the single greatest online resource of networking and real estate knowledge and you've started off on the wrong foot.