All Forum Posts by: Jacob Bunce

 I wont have 20% down till later, but I will take this into serious consideration. My end-game goal (I'm sure, like many others) would be to own enough houses, managed outside, to have a passive income for retirement. 

I see what you are saying with the refinancing. Would it be better to put a large down-payment on the house, or spend that to increase the value of the house? I would think building the equity of the house, then refinancing with the new equity in the house would give me more value for re-investing. I am starting to see the 'creative' side of buying tho. 

I work a full time job, so flipping would not be like the rehabs you typically see. (ones that are livable, but not selling due to things like the pool.) Like I said, I will be living in the house that I am planning to fix up. The house may not even be a flip, just a property that we plan on building equity in. Like I said, the comps (rough, due to no access to MLS at the moment, I will talk to my realtor tomorrow about it) shows the house being worth roughly 120,000 on the low end.

The duplex is already rented out (already has tenants, will be meeting with them tomorrow) and I do have the money for both mortgages, seeing as I currently rent an apartment for 800+ a month, and each of the mortgages should be manageable. It would definitely spread me thin, but it would be do-able. 

 I was also under the impression that is the 'life of the loan' was the case, you could have the property refinanced after that 80% debt/appraisal ratio. 

But my question of "Is it possible to get the duplex using a conventional loan, then buy the house using a FHA loan?" still stands. I know that I have seen many of the bigger pocket's podcasts that make it appear as if these people have bought many home using loans, but how feasible is that? I would like to start building my portfolio, and this seams to be the only way of doing it at the moment (without getting involved with hard money lenders before I know what I'm doing)

So, I'v been doing a lot of studying the last couple weeks, and have found a duplex that fits all of my qualifications (I have another thread about that one) and am going to attempt to get financed for this land. I had originally planned on using FHA and attempting a 'house hack' with it, however, I was wondering if another option would be better.

I found another house that seems like a good deal for a live-in flip. (or if we fall in love, just a good place to stay) The property is listed at 74k, and I plan on offering 60k for it. Most of the houses similar to this one in the neighborhood/area are at the 120,000 price point. The property also has a pool, which appears to be decommissioned, how-ever, my father-in-law has been a professional install/maintenance 'pool boy' for many years, and I myself have done many jobs with him. It would be quick and cheap to get the pool back into good shape. 

Is it possible to get the duplex using a conventional loan, then buy the house using a FHA loan? The time between buys would be roughly 3 months. I would be fixing this property up, and getting rid of the PMI ASAP. If this is an option, how long do most loans take to mature and allow the PMI to be dropped?

Just as an update, my numbers were off. I'm not sure where I got some of those numbers from, but this would be the calculations for the 50%.

600 * 2 = 1200 (for both rooms)

1200 - 450 = 750 (after mortgage)

750 / 2 = 375 (per room)

375 / 2 = 187.5 (per room at 50% rule)

These number are still way off from after expenses are calculated.

The correct cash-flow per month would be 164.24 per unit, so 82.12 for the 50% rule. The property starts looking attractive once we hit 90k, which comes out to be 204.56$ per unit, 102.28 after 50% rule is factored in. 

@Michael Limina 

Not yet, however, South Carolina has a conventional loan, much like an FHA with 3.5 down, however, instead of re-financing, the loan matures into traditional fixed-rate loan. I would give you more information, but I do not have it at this moment. I'll update this thread when I can get it.

Thank you. I'm glad to be here. 

Yes, me and my wife think it is a good idea, plus (no offense to multi-family living) it will motivate us to continue buying to be able to build our portfolio and get into a single-family house (for the children)

If there is anything I am missing (cap rates, that kind of thing) feel free to call me an idiot for not including an expense. Also, not exactly sure how insurance is effected by multi-family. the numbers I went off of are basically just doubling a single-family very near it.

First of all, I'm excited to finally be at this stage in my life. I have always planned on having a passive income for retirement via rental properties. I am 23 and looking to have children soon, (next 2 years) which means I need to get my finances in line. Before I go any further, I don't intend on asking for a mentor, just advise on this specific deal. (As per ToS)

I've been looking for houses for the last couple months, but recently I stumbled upon BP's youtube channel, which has been a wealth of information. It also opened my eyes to multi-home rental options. Now, there are several houses that I have fallen in love with and lost already, but like Brandon has advised me many times (via youtube/podcast) over the last couple weeks, I just need to start. 

In the Charleston area, there are not many multi-family properties for sale, unless I am missing something, but I did find one duplex in a decent area. This is were I am asking for advice, maybe some number checking. These are the figures that I came up with, but keeping in mind that I would be offer lower on the house. (90,000 would be good?)

The property's asking price is 110,000, and I would be using an FHA-like loan, so the down payment would be 3,850. There are 2 units, which both rent for roughly 650$ in the area. (I will be going with 600$ for my numbers to be conservative) Interest rate will be calculated at 5%, and loan term would be 30 years. After all of that is considered, the mortgage should be around 450$ per month. The 50% rule would end up giving me

1,300 - 600 = 700

700 / 2 = 350 (for duplex)

350 / 2 = 175$ per unit, per month. Not bad for a 50% rule. 

This leaves just the expenses. (120 for insurance, 233 for property taxes, 75$ for other) With all of these numbers, I figured that I would be getting a clash-flow of 328.48 per month for both units, leaving 164.24 after 50% rule is applied. 

I want to make sure I am doing this correctly, and as it stands, I want to put an offer down ASAP on this property. Keep in mind, that me and my wife do NOT own a house, so for the time being... we would not see both being rented, seeing as we would be living in one of them, but once we buy another house, this should be how the figures work out.