All Forum Posts by: Dustin Graham

Howdy,

Does anyone have any contractors they would recommend in Sacramento, CA?

Looking at a handful of small and medium projects by my estimate around 5-10k, property under contract, so also looking for an estimate of the work now, to be completed after close of escrow.

Shoot me a PM or share the details here.

Much appreciated,
-Dustin

Howdy,

Been doing some research, but wondering if anyone had a property manager or property management company they would recommend in Sacramento. Specifically northeast side of town.

Shoot me a PM or post a website here. Much appreciated.

Thanks,

-Dustin

I was brought here because of my keyword on Grass Valley. ;)

But, @David Dey WOW! The story in your first post is amazing. You earned that money because you understood all the moving pieces well enough to organize them. Heart warming solution for the lady.

Thanks for the info Logan.

That sounds in line with other stuff I've been reading in the last 48 hours. I think the answer to my question is basically that properties three and four will be feasible if the rental property covers the PITI.

I'll shoot you a PM to discuss actual loan considerations.

Thanks Logan.

Two questions. Does that mean I need to wait two years for the rental income to show up on tax returns before I can get my third property using the rental income of the first while living in the second?

Second, even with positive cash flow, the back-end debt-to-income ratio for three mortgages comes out to 40% or so. The fourth would be close to 50%. I'm calculating this by adding my income, plus 100% of the first rental income against the PITI of three properties. And, for the fourth, my income, plus 100% of two rental incomes against the PITI of four properties. How is this an okay debt-to-income ratio? Seems to high compared with what I have read.

Howdy,

Been running a lot of numbers in the past few days. I found some advice that the back-end debt-to-income ratio should be under 36% for lenders to be happy. (Some mentioned 45%.) Great!

I figured out a way to do that, buy a second property, and rent out my first. Right at 36%. Then after some time the rental income would add to my income, and DTI becomes something like 30%. Great!

Then I had an ah-ha moment. Can I do it a third time? Attempting the exact same deal would put my DTI to 40%. D'oh.

Of course extrapolating that makes sense. If I had 50 of these, with the 50% rule (unrealistic in California, but assume.) The DTI would gravitate towards 50%.

So my question is. Adding rental income to mine, how do we get numbers to work for the mortgage lenders to be happy with the third property? And fourth, fifth, sixth?

Thanks,

-Dustin

I'm still trying to figure out what my first step is going to be. I've looked at a lot of different options. I think I'm down to two main considerations.

I currently own a 3/2. I'm considering buying a 2/1, then renting out the 3/2. The property must be <1 hr from my work. So this is a bit restrictive since even 2/1's are a bit expensive around here. I would owner-occupy so I could put 5% down. These are around 200k in my area.

Alternatively, I may look for a 2/1 within a 5 hour radius in the 60k range.

What really gets me, is the current 3/2 that I'm in is valued at around 315k. Assuming a 10% down payment, the 283.5k would have a monthly P/I of $1353 (4% 30yr).

Places around here appear to be renting for around 1600! I think it may be pushing it to try to get 1700/month.

I realize I didn't buy my current house with rentals in mind, but how can I justify renting it out. With the 50% rule, I'd need 2700/month! 1700-1350 = 350 for insurance, taxes, vacancy, utilities, capex, etc.

What are my options. I suppose I could owner occupy a 2/1, then sell this place, and re-invest in another 3/2 that has better numbers... But is that worth the closing costs and such?

So much to think about.

Long term I want to own lots of real estate creating passive cash flow.

I envision that as either many SFHs or small apartment complexes.

I want to keep working full time at my 9-5 that I love. Trying to figure out where to start.

I'm leaning towards a 60k @ 900/month target to get my foot in the door.

Just read something that reminded me that I should become an expert in my desired niche, however, 60k isn't my desired niche, it is what I see as a viable stepping stone to 200k 3/2 SFH 1700/mo type opportunities.

A down payment for the 200k is much harder. But becoming an expert in 60k properties seems like the wrong path.

Not to mention, neither of these things are small apartments. Can anyone see my dilemma? 

Just getting started. Narrowing down my options. Primary considerations are a 3/2 owner occupied in GV and renting out my current 3/2. Secondary option is finding a $60k place 25% down that could rent for 1k within 3-4 hr radius.

Learning and reading as much as I can right now.

Howdy,

Does anyone know of a Grass Valley, Nevada City, or Nevada County REIA or REI Club?

Thanks,

-Dustin