All Forum Posts by: E Ibrahim

Wow. Some great nuggets of advice here.

@Lawrence Potts Thanks for the HOA tip! will get in touch with a RE agent and lender shop down there once my boots are on the ground.

@Laura Shinkle your advice on getting clear on the goal was super helpful! It's something i've been grappling with but couldn't really name and address. After some thought, eliminating my housing expense would be ideal and at the lower end of that range I could probably still snag something comfortable and in a good area. There are homes like this and this at lower price points (in the 400s) with mortgages of 2.5k that match all the other criteria. I'd be comfortable putting down 20% or slightly more if the lenders require that.

Unfortunately, ATL doesn't seem to have many quality multi family homes however, there does seem to be a good amount of basement apartments out there to make this work.

@Ryan Thomson Thanks for the tip on dti and loans. That's probably my biggest obstacle atm, since my income would only qualify me for homes in a price range in which homes would be much smaller and house hacking wouldn't be possible. Will shop for lenders in the coming months.

Hello All!

I am moving to Atlanta in a few months for a job, I am changing careers and will be starting on a salary of roughly 60k in the tech industry where salaries scale quickly. Prior to this, I worked and saved in more lucrative positions and have upwards of $200k cash in the bank.

I have a solid credit score of 760-800 and no debts except for a $340 car payment. My family of 3 and I want to house hack a nice and fairly big house in the $300-600k range in a safe part of town with a strong school district.

By way of example and erring on the conservative side with the numbers, there are homes like this one with finished basements that could easily be rented out. PITI about $3000 and that basement could be rented out for $1200-1500 ..so would only be paying $1500-1800 a month to live in a very nice house which costs the equivalent of a 2-3 bedroom apartment in town. Some properties I've seen on Zillow are on a big lots, so in future, would explore taking out a loan to build a tiny house on the property to live for free(ideally cash flow).

I wanted to pick everyone's brains on a few things specifically:

1. Taking into account my cash savings, can i qualify for an FHA loan when the loan is over 5x above my annual income?

2. Would I be better off going smaller and finding a house in the 300-400k range with a finished basement to try this on instead? I'm comfortable with the  risk of going higher, but curious to hear how you would approach it if in my shoes.

3. Also curious on what everyone's thoughts are on the feasibility of this strategy overall.

Thanks!

@Mike Lorence great suggestion, I love that!

@Jason Merchey Yes, exactly..my idea is more on the active side when I really think about it....being remote makes it really difficult to build that trust with a partner or partners. I managed to find a company that does commercial multi-family turnkeys, but they're all out of inventory.

@Jason Shackleton I feel there are options to qualify somewhere out there, but without Landlording experience and a loan guarantor I have not been able to find any interested financiers. If you happen to know of any lenders that could do so on somewhat favorable terms, let me know! 

Thanks everyone for your feedback. You have given some really solid suggestions and feedback.

I'm pretty intrigued by the paid mentorship model (where mentor becomes a partner). Seems like great way to get educated, and also have someone experienced by your side with skin in the game and every incentive to ensure the success of the student.

@Mary Esses Hey Mary, I am in your exact position. Had a conversation with Eric and am currently checking out the inventory available and then might pull the trigger if I find the right property. Let us know how your experience goes. RtoR seems to have a great reputation here on BP.

@Joshua McMillion    Thanks for the tip Josh! I never considered joining a mastermind, though I've often heard them come up during my research. Accountability is great thing. Will be looking into it now.

@Arn Cenedella Thanks for the input Arn. I wouldn't mind being a more active investor, but given distance, a more passive investment is better for me. I was drawn to partnering as I can be part of the deal with training wheels on, but still retain equity and have some say over selling or 1031 exchanging in future, all the while learning along the way. 

Your numbers are exactly what I have found when investing syndications, and as you noted, bigger pockets are needed to get the cash flow I'd like (pun intended :P).

Hello BP family,

I'm an overseas American looking to jump into RE investing.

I am currently considering two strategies.. Either turnkey sfh investing or apartment complex investing .. I'm investing for cash flow ( goal of $3000 month net for myself) and through my research have yet to find a better cash cow than commercial mf ..even the lukewarm deals there cash flow better than turnkey sfh's

I have been in talks with brokers and have seen some decent deals on the MLS but have struggled to find reasonable financing because I have 0 investing experience.

Anyone have advice on how to find a willing and experienced partner who can be my boots on the ground and mentor on the journey? I can provide the bulk of the capital while partner finds the deal, guarantees the loan, etc.

Thank you all for your responses and insights.

@Blake A. Rivers thanks for that comprehensive answer, you've given me a lot to think about, specifically with PML. Since I have no RE experience, don't think I'd be a good loan prospect now, but something to look into for the future.

@Account Closed

I ran the numbers using a pro forma with pretty conservative numbers from Memphis Investment properties.. assuming a 30 year mortgage at 4% interest and the purchase of 7 doors at 20% down, the DSCR comes out to 1.45..

From what I know however, commercial loans tend to have shorter terms and have higher + adjustable interest rates, and balloon payments... I am not really motivated in pursuing commercial loans since the typical terms can really kill cash flow which is what I'm after. Additionally from what I understand, commercial lenders generally only loan to experienced landlords, which I am not.

@Carlos Ptriawan

don't lenders only use .75x rent only after its been with the investor for at least a year and reported in tax returns? On another note, I'm glad to hear some conventional lenders may go for this.. It really isn't complex when I thought about it, and in my mind it's a win win for the bank and myself.

Hello all,

I'm currently in the process of zeroing in on a REI strategy. I will most likely go the TK SFH route through one of the more reputable companies I've found here on BP.

Ideally, I would like to make my investment in one go, buying 5-10 properties as a package. My credit score is solid (780), I live overseas but have had my job here now for 5 years, making the equivalent of about $50k USD annually, 0 debt, and plenty of liquid cash.. enough to buy 10 properties (worth 100k) with 20% down, or fewer with higher down payments. I am after cash flow, as close to $2k per month as possible.

I had a few questions though:

1. Are lenders comfortable underwriting this many mortgages at the same time?
-->*note: after making Down payments, I will still have reserves to cover 6 month PITI for about 7 properties.

2. Will my DTI be a disqualifier/problem as the number of doors (and debt) increase?
    --> According to some sources, the most I can qualify for is 4.5x my annual income, this wouldn't enable me to do a great deal in terms of investing/scaling.

3. Assuming I'm capped from a mortgage standpoint, what do you think of putting down 30/40% down on fewer properties (4/5)?


I will take these very questions to the preferred lenders of the various TK companies too, but wanted to pick the brains of the BP community first to gain a greater understanding from the investor/lender community. Thanks!