All Forum Posts by: Frank Avallone II

Hi @Morgan Stelly,

As a few others have mentioned it is true that with a conventional or FHA mortgage you would need two years of self employment and then we would average that income and use that to qualify you.

Personally, if it is an investment and you don't need to live in it I would recommend looking into DSCR loans as you can qualify based off the property and its rental income.

These types of loans typically require at least 20% down and will have a higher interest rate but if the deal makes sense it could still be worth it especially to get the ball rolling. 

Late you can look to refinance for better rate and terms when you can qualify conventionally. 

I have personally done this in order to not miss out on a good opportunity that came my way. Then I refinanced out of it and the deal made even more sense.

If you have any questions about anything feel free to reach out! 

Hi @Kendall Moore, glad to hear you are interested in getting started in real estate investing. 

Not sure of your current living situation but have you considered getting started with a livin in multi family purchase using an FHA mortgage to put as little as 3.5% down on a multi family up to 4 units?

When looking be patient most of the times a great deal won't be there waiting immediately but you will find one if you keep looking.

Buying and renovating is a great way to create equity to then use to fuel your next investments.  

Hi @Ali Clark, I do not think this is possible in this instance. First off, not all townhomes in general are FHA approved so this would be something to look into initially even if considering one.

Definitely would be awesome to pick up all 4 though. Have you considered buying them conventionally? Maybe 1 FHA and then the other 3 through conventional mortgages? 

Hey @Robert J., best way is going to be talking to a mortgage lender. You definitely want to go through the details so you can be sure you are making an appropriate plan. 

Hi @Luke Stewart,

Definitely good to use a ballpark gauge but I would also talk to a local contractor to get a better estimate for the work and material!

Good luck!

Hi @Morgan Pierson, 

Happy to hear you are looking into investing into real estate!

Starting with a strong income and a good amount saved up is definitely going help you get started and keep the ball rolling.

If I were in your shoes I would pretty much do what you are describing here already. Utilizing the FHA mortgage is a great way to get started and will allow you to maximize the cash you have on hand in order to set yourself up for the next one.

If you are able to I would recommend starting with a 4 unit which is the FHA limit to maximize the benefits of the FHA loan. Of course depending on the deal a 2 or 3 unit may make more sense than a 4 unit but typically it is easier to get a better return with more units. 

If you can find a property that you can add value to with renovations and such than that is even better. By doing this you can create equity for yourself so that you can extract cash from the property down the line to use to put towards the next one. 

As far as picking the right market this is always a tough conversation on bigger pockets. Really is hard to say but if you are knowledgeable about any specific areas this could help. 

When looking, be patient. No need to rush into anything. Find something that makes sense for you.

Good luck!

HI @Charles Granja,

I am an investor and lender. 

It really does depend on the exact scenario because there is different rules for different scenarios.  Are you currently living in one of these properties you are talking about?

Usually for properties that are owned less than two years we have to go by the lesser of either the fair market rent value or the lease agreements. From there we can use 75% that income to be counted towards you qualifying income. If this doesn't wipe out your mortgage on the property than you would still have a net debt. If you have already went through a tax filing since having this property then we would look at the reported income on the tax returns.

For the second part about not using income from a property you had bought cash, I have never heard of that. You would be able to use income from that property as long as there is leases in place or you had the income on your tax return. 

Hope this helps, feel free to reach out with any additional questions. 

Could be great for flipping!

Hi @Shakir Khan, Congratulations on the purchase. 

I can definitely help you out with this!

Hey @Quiana Berry, I was in the same boat when I started out. I would advise starting to look in the areas around you that you are comfortable with. Sounds like friends and family is definitely a strong factor for you which totally makes sense. Have you began talking to anyone in the field in your area? Any realtors you are talking to or other investors? This would be a great way to get more of a understanding about the area you are in from an investment standpoint.