All Forum Posts by: John Larson

My goal is to buy and hold for the passive income.  With the goal of favorable terms in mind as well as have good positive cash flow, sounds like building experience would be beneficial in the residential world first before progressing.  However, I think talking to a few lenders now would be good just to see where I stand and compare that with what I might get had I had more experience, all other things being equal.

Thanks again for the feedback and advice.

@Nick Belsky thanks a ton for the detailed response!

Based on the answer to #1, looks like #2 no longer makes sense.

Say I wanted to go directly to CRE multifamily, would a typical lender talk to me or would it be better to have experience in the residential world first to show experience? If so, how long would you suggest I send in residential?

Given your response sounds like a beginner should start off in residential for some number of years, show you know what your doing, and then go commercial. I was wanting to end up with 2x 6-12 unit complexes. Since that's my planned destination, I think forming a LLC to own the residential rentals and then once I'm ready to move to CRE that LLC has the needed history. Would you agree with that approach? Or would my personal experience be enough to carry over (I'm hoping this is the case)?

I plan on retiring early and moving to a cheaper state in ~3 years.  Our plan is to move into a rental home in the new state, sell previous home, and eventually buy a new home in the new state.

Between now and then I plan on buying some multifamily RE and am concerned with getting a good rate with the mortgage on the next primary home in the new state because 1.  I’ll have debt in the multifamily rentals and 2. we’ll have much lower income (wife will work and we’ll some hove retirement income).  If I kept my current salary when buying the next primary home, this wouldn’t be a problem but my employer won’t allow the remote work and I would prefer to stop working for money at that time.

Questions:

1.  Say I invest now in only commercial properties using loans.  Do commercial loans affect my income to debt ratio?

2. Would owning CRE or non-commercial RE using a trust or LLC be beneficial to my situation knowing I want to get a good rate as much as I can for the primary home mortgage?

3.  How can I estimate my income once I am retired in much the same way a mortgage lender would?  Currently all of my investments are in the stock market but I plan on buying some RE in the next 6 months or so.

If anyone has advice to do these events in a different order to achieve my goal, I’m happy to read what you have to say.