All Forum Posts by: Evan Manship

Welcome @Drae C. 

One thing that I haven't seen mentioned on this topic just yet is utilizing an FHA loan. FHA allows a first time homebuyer to purchase a 1,2,3 or 4 unit property with as little as 3.5% down. My advice would be to purchase a multi-family property while living in one unit and leasing out the others.

Another product, FHA 203k is the same product, but allows the buyer to add in the cost of renovations to the purchase price.

For example, if you purchased a $100,000 home and it needed $20,000 in repairs, one could pay 3.5% down for a total $120,000 purchase price.

My twin brother and I recently purchased a 4-unit building and will be living in 1 of the 4 units while leasing out the other three. Construction starts in a month or so as we are putting over $80,000 into renovations for the quadplex.

Hope this helps.

What's up, Kiel?

Welcome to the site. I graduated in May 2013 and am currently working a really cool job in commercial real estate. My twin brother and I co-own 5 units here in Indianapolis and are always looking to add to our portfolio. REI is one of the most lucrative yet challenging industries in the world -- and you'll begin to see that on your own as you start.

My advice for newbies:

1. Network. Meet people who want to do what you want to do. Associate yourself with folks who want to learn more and are frantic to be the best.

2. FHA Loans. The best way to get started is to utilize an FHA loan which allows you to acquire a 2-4 unit property at 3.5% down so long that you live in one of the units. My brother and I are living in one of the 4 units in a property we just purchased while leasing out the other three. This allows us to cash flow while building equity and faith with lenders and possible investors.

Reading here on BP is the best way to get started. Get familiarized with the terms, products, and situations. Learn what you can and make the leap - once you do, you won't look back.

There are many properties that sell in markets like the Midwest and Great Plains regions just like this one listed. Obviously there is deferred maintenance on the property, but an inspection with a contractor will  tell you the difference between some TLC and a fundamental issues with the home.

Looks nice to me (not familiar with Iowa markets) but I wouldn't move on it until I speak with a contractor.

Hey folks,

I am in need of some pro advice. I am in the beginning stages of raising money for my real estate investments as I would like to look into bigger multi-family projects but cannot afford them on my own.

If you have raised capital for a project, please share:

1. How much you raised

2. How much you needed

3. What methods provided you the most success in landing new investors

4. What were the best selling points for investors?

Look forward to seeing the replies.

@@Michael Seeker said it best -- you don't want to leave a unit vacant just to maybe have a place to stay to go fix something. The $500/mo in rent that you'll be collecting is well worth $200 for a hotel.

Don't lie to the bank as far as your purposes with the property. Be upfront and do your research into what products they offer for your needs.

No.

I am in the middle of doing what @Jesse Waters is recommending. My brother and I recently purchased a 4-plex and plan on living in one of the units while leasing out the other three utilizing FHA 203k financing. It has been a little bit of a headache but will turn out great when it is completed.

As far as your deal goes, some people will live and die by the "2% Rule" which is defined as your monthly rent being at least 2% of your purchase price. Your current numbers using my calculator indicate:

Mo. Payment - $682.84

Property Taxes - $3,000 annual ($250/mo)

HOA - $96 monthly

PMI- $130 monthly (estimating)

Homeowners Insurance- $60

Total = $1,218.84

With a rent of $1,400 and total outflow of payments at $1,220 you are looking at a total cash flow of $180 per month and that is not including any type of concession such as vacancy or maintenance reserves. Once you counter that in, this deal may not be what you bargained for.

Cool post, Jason. It is easy to get sold on the idea of investing and pushing all your effort into making a deal happen. As someone just getting into the art of investing, I can say first hand that there is a fine line between being ready to pull the trigger and jumping the gun.

"The power of negotiation always lies with he who cares the least"

I can't imagine that being correct. Each loan program I have looked at whether FHA or not requires at least a 3% down payment. Fannie Mae Homestyle loans are also a renovation loan but those require as much as 15% down depending which type of property you're looking into.

Thanks @Jon for the quick reply. My apologies, yes. It is on a land contract. He attempting to avoid the most tax at all costs. His thoughts were originally to 1031 this investment property but he is in no need for an alike investment.

Any ideas on how I can go about acquiring this property with the lease amount in tax possible for my uncle?