All Forum Posts by: Frank Paternoster

Hello BP,

I've finally taken action and gone under contract on my first investment property. 

In an effort to get my feet wet, I've identified a single family turnkey property in Missouri for $75k that will cash flow around $550/month after expenses, but before financing charges.We're closing in mid-August, so I have some time, but not a ton.

I have a few options for financing, and have been weighing this over myself for a couple of weeks now, but thought I'd seek the advice of the BP community.

A few things about my situation:

• I have approximately $100k in cash that I've earmarked to invest in real estate.
• I have access to a line of credit equalling approximately $65k
• I am in the midst of refinancing my primary residence, which should be closing in the next 2-3 weeks. In doing so, my wife is remaining on the title, but the new mortgage will be solely in my name.

As I see it, I have a few options to choose from to purchase the property

• Traditional Mortgage in my wife's name (she is also on the title), which shouldn't affect the refinance. Given the price of the property, she should be able to absorb the mortgage into her DTI in the event the mortgage on our primary hasn't closed yet. Not concerned about any rate difference between the two of us - I'm expecting that to be relatively small.
• Delayed financing, where I purchase in cash then finance in a month or so after my refinance is complete
• Pay in cash, then do a cash out refinance in six months
• Pay in cash, then take a HELOC
• I don't know what I don't know! Are there options I'm not considering?

Given my situation, all see like viable options, but I'm having some difficulty weighing the pros and cons of each approach.

My goal is to achieve financial independence as quickly – but as safely and methodically – as possible through cash-flowing buy and hold properties. In the short term, I'll be looking towards turnkey properties until I have experience purchasing and land lording. I'll likely start looking for properties where I can force appreciation in the next year or two. Longer-term, I have an eye towards scaling up to multifamily or possible self-storage at some point. I'd like to have a bit of real-world, progressive experience under my belt before I take that route. 

My hope is that with what I've saved, I'll be well-positioned to purchase 3-4 properties in a similar price range or slightly higher relatively quickly, so I'm not really interested in tying up all of the funds in a single property.

Would love to hear the community's thoughts on how to approach this situation. If anyone is feeling generous, feel free to teach me to fish if there's a framework you're willing to share to think about approaches to optimize financing.

Thanks!

Very exciting to see so many investors starting their journey in the area! I've been wondering this as well. 

@Dustin Fike @Matthew Armstrong

I moved to Winter Garden relatively recently and am just getting started in real estate as well. I've been working on analyzing deals and have been speaking to a number of people I've met on BP. I'm hoping to BRRRR, but my knowledge of rehabs is a bit lacking to say the least. I thought I'd start out with a more straightforward buy and hold to get familiar with that aspect at least, though I'm having a difficult time seeing how I would finance subsequent deals if I did this so am also looking at BRRRR options when I can.

I'd love to discuss strategy with you both. Maybe we can help each other succeed? Looking forward to speaking with you!

Congrats @Jerniel Diaz! A solid start. Great that you're following your dream to retire here. We certainly have that in common - hopefully I'll be catching up with you soon.

Best of luck to you!

@Dmitriy Fomichenko Thank you!

@Tyler Gibson Thank you! May very well take you up on that in the near future.

@Daniel Salone Definitely! Would be great to exchange thoughts. Always good to have likeminded people to bounce ideas off of.

@Roxy An That's exactly what I've been seeing, which is what's made me look elsewhere in the state. From your post the other day, it looks like you're doing the same - albeit much closer to Orlando. 

I'm sure being so new at this, I'm missing something though - like Tyler said, there seems to be a decently large group of investors in the area from what I've seen on BP. Certainly happy to introduce you to anyone that might be able to help as I meet them.

@Thomas J. Clifford Thanks for the insight! It certainly rings true, at least based on what I've seen come on the market via public MLS sites as I've been analyzing deals for the last few weeks.

Certainly gives me a lot to think about.

@Jonathan Vasquez Absolutely! Thanks for the warm welcome.

@Matt Leber Appreciate the offer! I'll definitely need to give Brevard another look as well.

Thank you, Andrew. Very much appreciated!

Hello BP Community!

My Name is Frank, and I'm a longtime podcast listener, first time poster here on the forums. 

My wife and I moved to Orlando from NYC in late 2019 and are looking to start our family. I've been investing in stocks for quite some time and am very interested in diversifying into and achieving financial independence through real estate. Not necessarily looking to retire, but I would like to leave the W2 world given sufficient investment income to focus on growing real estate as a business to regain control of my time and have the freedom to spend as much time as possible with my family.

Given my goals, I plan to do long-term buy and hold single family and small multifamily rentals. Am very interested in pursuing the BRRRR method, but am conscious that I need to take action and start somewhere to get myself from 0 to 1.

I'm still trying to nail down the market I'd like to invest in, but am very intrigued by Jacksonville (as hot as it seems to be right now...), Gainesville (possibly more of a rent by the room scenario for the college crowd) and Lakeland, a very high rent to own ratio area closer to home. Would love to invest nearby, but the prices are climbing quickly these days.

With so many possibilities in real estate that it's hard to decide where to jump in. That said, I am absolutely determined to make sure I'm not one of the people that give up, fail, or never get started -- even though, as a naturally risk-averse person, am having a really difficult time getting out of the analysis paralysis and pulling the trigger on a deal. Hoping others can relate!

Looking forward to meeting others who are or have been in my shoes.