All Forum Posts by: Evelyn Roper

Do you already own a primary home?  If not, is a duplex an option?  Because if you can find a duplex, you could rent one side for income.  If you can commit to living in it for a year, you could possibly qualify for an fha home mortgage.. Look up house hacking on here.  I hear it is an excellent way to start your rental portfolio.  

If they don't have other offers, they may let you do an inspection.  I have purchased "as is" with an inspection contingency.  You might know that the house needs work but an inspection will allow you to know how much (and at least check major systems) before you commit.

I will not rent to family or friends.  There are just too many ways that doing so can turn a friendly relationship into a really bad one.  Better to stick with pre-screened applicants that you have no emotional/relational ties to.

If you do decide that refinancing is the right approach for you to take, make sure you shop around for the best possible terms.  One company we went to (the first) had a much higher interest rate and higher closing costs.  When you get your credit run for a mortgage, you are allowed 30 days to shop lenders and it only counts against your credit as one "credit pull."  When we checked with other lenders we were actually able to find one with one full percent lower interest rate. They also lowered our closing cost, possibly because we mentioned we were shopping lenders.  Not sure of your situation but as Brent mentioned, your first property won't cash flow as it does now with a refinance. Will you have enough reserve without having to rely on the first property's rental income? That would be my concern.  I am a very new investor. Others who have more experience likely have a better answer.

We bought our primary home six years ago so we had paid down a fair amount of principle (extra payments were helpful) and we bought it at a good price.  We recently did some home repairs then refinanced at a much lower interest rate (dropped over two points).  We were able to pull out enough cash (from equity/appreciation) to fund our first rental.  I was surprised to learn that our payment on our primary home only increased by $50/month thanks to the low interest rate.  We pulled out nearly $20k!  If you bought your house right and your market is strong, this might be an option.  Be careful that you don't over-mortgage your primary home though and make sure that you can easily handle the refinanced payments.  I am new to investing but I am certain that this was a good move for our family/financial situation.  It may be for you too so I wanted to share.

@Luis Gonzalez  I do not have any experience with the 203K loan (not even 100% certain on the name).  I just have read about it here on BP.  Others have said that they have used that form of financing on homes that need repairs.  Google can probably give you some information about it.

Is it in livable condition? Would you be willing to live in one of the units for a year? Could you possibly get financed with an FHA 203K loan? If you could it would save you the hassle of having to refinance and you could get a better interest rate than a hard money lender.

*interest rate*

We did a cash out refinancing and because we were able to get a much lower interest rebate than we had before (dropped over two points) our payment changed very little (up by about 10%).  With that refinancing, we were able to purchase our first rental.  Try another lender.  It is a great time to refinance.

Just bought our first one today!