All Forum Posts by: Ethan Lee

Thanks @Walmsley Gedeon! I saved money like crazy over the past 2 years to have funds for down payments, then so far we got conventional mortgages from banks. We also work with private lenders (so far family members) to fund projects that need repairs, then we'll refinance them with banks. We're working now to find portfolio lenders which should be a better fit with me not working a W2 job and our increasing DTI, although rates will probably be higher.

@LaMonica Evans I haven't personally done wholesaling yet, but I probably will in the future if/when we get into direct marketing and find deals when we don't have the funds lined up. We haven't bought from a wholesaler yet but we're on several lists and are constantly analyzing their deals, so I am hoping we will at some point this year.

Thanks @Richard M. and @Henry Shungu! Keep plugging away @Asim Alam it wasn't a walk in the park but definitely not impossible either. The beginning is often the hardest and it snowballs from there.

@Maxwell Lee Great, waiting for a call back from Ameris and I'll give First Atlantic a call. Sounds like your cousin's wife will be a good asset. In case it can help you or anyone else searching, calling around today has so far left me with Atlantic Coast Bank, Angel Oak Home Loans, and Caliber Home Loans with programs designed for real estate investors. They have different requirements with minimum loan amounts, credit scores, whether or not they use DTI in their underwriting, etc. but they all seem like possibilities in the Jacksonville area.

@Kurtis R. Thanks! My partner has been a big part of my success and now will be a big help in getting loans. We knew we were a good fit because he makes great money for his age, while we knew I would be able to focus on growing our business full time. I just now left a job so we will see how much that impacts getting loans. We are searching for good portfolio lenders who will use a portion of our rental income when calculating our debt to income ratio, which isn't the easiest since we've bought all of our properties within the last year. 

I would recommend finding a partner who is willing to be very transparent about his/her finances and equally focused on the goal of building a rental portfolio. My partner and I are open books - we're constantly updating our combined debt to income ratio so we know how we look to banks. We're both committed to frugal lifestyles and having zero consumer debt like car payments or credit card payments. I would definitely recommend transparency when looking for a partner to team up with for mortgages.

We divide income evenly and we're both focused on putting any disposable income towards more properties, so we haven't run in to any issues there. I would find someone whose goals align with yours extremely well.

@David Zheng you can read a little more in the above post, but I'm getting around $2,000 in cash flow per month, which covers our expenses. I didn't have a high paying job so taking the risk of doing real estate full time was worth it. Plus I'm kind of trading my job for a job flipping houses as well as the more passive rental investing. 9k a month is awesome in a year, congrats. It all depends on your risk tolerance, how much you're making, and how much you like your job, but unless I was making a lot of money doing something I loved, I would definitely live off the six figure rental income and reinvest at least half of that each year to keep growing the portfolio. I imagine it will be more and more difficult to maintain both a job and that portfolio as you grow.

@Andreas W. Thank you! The easy answer is I live an extremely frugal lifestyle. No kids helps and my wife brings in income as well. We also do wedding photography on the side which helps. I cash flow conservatively/realistically around $2,000 a month, which covers all of our expenses. We saved up a cushion of money which is allowing me to take the risk of flipping house and acquiring rentals full time! It wouldn't be possible without our frugal lifestyle, but I would much rather get out of a 9-5 now and get the finer things in life later on.

@Todd Miller I appreciate it! Would love to connect as well. Our current BRRRR is in South Carolina so we will be using a portfolio lender up there once the 6 month seasoning period is up. I am in the process now of trying to find good investor friendly local banks. Let me know if you hear of anything!

@Maxwell Lee thank you! I look forward to connecting soon - I think I saw that you'll be at a Jax meeting in February that was being planned over the forums? I'm excited to be here and to get plugged in. Do you recommend any local banks that work well with investors? Starting to call around but not having great luck with banks that count recent rental income in the DTI and allow more than 4 mortgages.

Hi @LaMonica Evans, good luck getting started! If I wasn't married, I would absolutely have started with house hacking a multifamily using an FHA loan. I'm a huge fan of the idea for getting several units with a super low down payment.

While your broker is right about SFR maybe being safer because you can sell to both investors and home owners, multi families have their own strengths. I'm not sure about your market but in areas I've studied, if you want to house hack you can get a SFR for $75-100k and bring in a roommate for $400 a month, or you can find a great deal on a quad for $150-200k and rent out the other three units for $600 each or $1800 a month total while keeping a unit for yourself. With FHA, the down payment on the quad is only going to be a little more, but you've got yourself $1800 in gross rents instead of $400.

I think it's a great way to get started. The key is to be patient and find a great deal in a decent area. If you can find a great deal, good tenants, and improve the quality of the building or keep it in good shape, you shouldn't struggle to find a seller. The other point worth making is it's good to be safe and think through exit strategies, but I plan on holding my rentals long term, so I am more concerned about strong cash flow than I am about reselling it. This all depends on your strategy though. Research your market, run the numbers, and do your due diligence and I think you'll do well with house hacking a multifamily.