All Forum Posts by: Josh Mitchell

@Quintin Richard

I personally don't ever think that having a property paid for is a "bad" thing, however there are some things to make you aware of..... If you purchase a property in cash are you going to have enough reserves for a roof that need replaced in year 1? Replacement of HVAC in year 1? Also, a big tax write off can come from your mortgage interest in which you pay each year. Also, if you want to grow, you will probably refinance the equity back out of this property in order to do so, so you could eliminate that step by just putting 20-25% down payment that most lenders require. Hope this helps. Good luck!

4plex would be the best way to start if you can afford it. Just think, one roof, one appraisal, one inspection, etc. If you are going to live in one of the units, you can purchase it using an FHA loan for 3.5% down. You have to live at the residence for atleast a year, and you cannot have more than one FHA loan at a time. You would need to refinance out of the FHA to get the PMI to come off of the loan as well. If you are going to buy it as an investment you will have to do 20-25% down payment.

@Daniele Reeder

@Justin Tahilramani

when we bought the place, yes we did know that the HOA had restrictions, but that was before we got interested in REI. This was my first place I bought after college, and my wife and I have been living there for the last 2 years. We could lose the ability to rent, yes, but like I mentioned, we were going to sell the condo soon anyway, so if they change the rules we will just sell.

Just received HOA approval to rent out the condo we are currently living in. Just recently they voted to allow 15% of the units to be rented out, so everyone who wanted to rent, had to submit a request. Yesterday, we received word that we were picked as part of the 15% to rent our unit out! My wife and I were looking to move soon anyway, so if the HOA decides to reverse that policy in the near future, we will just look to sell the condo. With the average market rent in our area, after all expenses are taken out (Mortgage, HOA, 5% repairs 5% vacancies), we will be cash flowing $441/mo.! Excited to take that extra cash and invest in some more properties!

@Keith John

With the 3.5% FHA loan you are referring to, you would need to live at the property for atleast a year, so you are correct, that it is a "house hack" method. Like @Upen Patel said you should expect to pay 20-25% down on an investment property if you are wanting to go the conventional route.

@Jane A.

Can you elaborate on why you are running into problems at the banks and credit unions you have called?

@Audrey H.

Welcome to BP!

@Hae-Yuan Chang

1) She will need to live in the home in order to do the FHA loan for at least a year.

2) If you are going to use this home as "income" you have to have rented it, and show it on your tax returns for 2 years for it to be taken into consideration for income.

3) I would consider a conventional loan, but if your mom is not going to live there it is going to have to be considered an investment property in which there will come higher required down payments and rates associated with the loan.

I would def recommend getting a job asap because you will need to have 2 years of work history in order to be able to qualify for loans more easily. I don't see you renting this house out in the near future and being able to afford another property, if that is the route you want to take. Good luck!

@Andrew Scheibe

Welcome to BP! Great to know of another broker in the city who is investor friendly! Hopefully, one day we can do a deal together!

@Josh Prior

You are in the best place to do that. Learn all you can on the site. Watch podcasts. Sign up for the webinars. The "Learn" tab on the top of the page will guide you through all types of different things. Once you start to learn more, you will find out what type of investing you really want to pursue, and figure out the steps to make it happen! Good luck!