All Forum Posts by: Heath Jones

Hey Damian, Congrats on getting motivated to do this at such a young age. How much to save really depends on how much the price is of the place you are going to buy. Just starting out, a duplex is the best way to go, but that is not considered commercial, it's still residential (anything 1-4 units is considered residential) and you would be getting a conventional loan. Since you will be living in the property in one of the units, you would only need 3.5% down, so that equates to 3.5k for every 100k in price (for example, a 200K duplex is going to need 7k down), plus depending on your mortgage lender and what you can negotiate the Seller to pay of the closing costs, I would estimate another $3300-3700 for that to be safe. 

What is the best age you ask? I'll answer that with an old Chinese proverb you'll hear thrown around the investing world (I hope I don't butcher it):

"The best time to plant a tree was 20 years ago, the next best time is today" Start ASAP and Good luck!

@Alban Biba

Well, there should not be any PMI if you bring 25% down on a conventional mortgage. On the commercial side, I think most banks will require 20-25% down and I do not believe there is PMI associates with these loans.

@Alban Biba

Sure! For 1-4 units, you would be getting a conventional mortgage. If you live in one of the units for at least on year, you can come with 3.5% down, if not then it is considered an investment property and you would need to bring 25% down. You might be able to find a mortgage broker that does less, but I don’t think that’s likely.

For 5+ units, this will be a commercial loan and will have to find a lender for this. Many recommend finding smaller local banks, as they are looking for your business, but you can always shop around.

Let me know if this helps and if anyone else has any advice, please feel free to chime in! Take care and stay safe!!!

What type of multifamily? 1-4 units or 5+ units? The lending is different between those two sizes.

Looking forward to seeing what this add-on can do!

Get in touch with me about your Multifamily investing experiences and we may have you on our show!

For us, I know we are sometimes just so concerned with having enough to close the deal that making sure we have adequate reserves is not as important as having the down payment. Hopefully, during the DD period, we have assessed how much would be needed and found anything they may jump up and surprises us and be darn sure we put back enough each month to build enough reserves to weather any surprises. I don't think anyone would deny that they would feel much more comfortable with more cash in their reserve accounts.  

@Jay Hinrichs

A little more than halfway there! I think we will get them all this month, next month is what I’m more worried about...

@Chris Seveney

Learn to sharpen your pencil by analyzing more deals...

@Steve B.

For one of the questions, it was a 3/4 year review in October which probably required an hour or so of his time. The second question was in reference to the tax implications assumed by a potential seller reinvesting a portion of the sale as an LP in the deal.

I figured these questions wouldn’t take too much time and was expecting a quick, “yeah you’re still good like we discussed at the beginning of the year” and a, “no, I wouldn’t tell the owner he would save on taxes by reinvesting with you because it doesn’t make sense to do so.”

Like I’ve said in above posts, I don’t mind paying for the time and advice, but if I’m paying close to 3k, it would be nice to know beforehand that I will be charged if they answer my questions. Then I could decide if I want to pay fo that answer or if it is really that important to find out. Thanks for your response.