All Forum Posts by: Joshua Lee

I have no properties yet - just working a regular job and doing some freelance work on the side. I'd like to start earning some "unearned income" and building wealth. I've read quite a bit and I've watched a ton of videos. I'd like to check and make sure I'm on the right track.

BTW: I make around 80k per year and I live in central Florida.

Here's my strategy:

- I'm currently living with family and reducing spending. Looking to save for a year or two. That should give me about $15k-$25k.

- Buy a multi-family home - I've seen some for as low as $250k, but I'm sure there will be different deals by the time I'm ready to pull the trigger.

- Take out an FHA loan for 3.5%. That's $7,500 on a $250k home which should be much less than my savings. That means I can either have a cash cushion for any renovations or covering some of my mortgage until I get a tenant or get into a property quicker.

- That puts my mortgage at around $1,500. Looking at the comps, I think I can rent it out for $750 - $1,000. That would put me at negative cashflow of -$750. Maybe call it -$1,000 to cover upkeep. Also, even though this is a negative cashflow it's basically what my rent would be. So, I guess I'm paying $1,000 to live in my home to earn equity in my duplex. 

- According to an amortization schedule, it'll take about 10 years to get 20% of equity in the property. Ideally, I'd put more towards my principle faster if I have the cash.

- Once I get 20% equity in the property, use another FHA loan to buy and live in another multi-family property then rent out both sides of my first duplex leading that to positive cash flow.

- Repeat..

Am I on the right track? Basically, take out an FHA loan for a multi-family, get 20% equity as fast as I can, and then do it again.

Quote from @Trevor Powers:

Network, read/listen to books, and don't be too hesitant on pulling the trigger on something you believe is a good deal. When it comes to the "2 years to get started" comment, there are mortgage brokers who might be able to help shorten the time required for the loan. Start asking around! Sometimes if you have your other ducks in a row, they can do some magic and make it work.

 Thanks for the advice Trevor. Sounds like I really need to network and see how I can work with other people like mortgage brokers.

Thanks, Kerlous. Just checked out Ohio (around Cleveland) on Zillow and saw some decent looking duplexes for around $70k. I'd have to do much more research, but it looks like that area, we might be able to get into something for less than $15k (less if we can do an FHA loan) and still have around $10k to fix it up a bit before renting one side out. That would put us with a ~$400/mo mortgage while still having one side to rent out.

Might be worth it to live in Ohio for a year to do that and get that set up. Still have a lot to look at, but thanks for the suggestion. Gives me a bit more hope that this is possible sooner than I thought. 

I've read about house hacking the BRRRR method, FHA loans, etc.. I'm ready to get started, but not I'm sure about next steps. Maybe you can help?

For the last 10 years, I've been living in Asia running a small marketing business I started from nothing to making $3-4k per month. My new wife and I are moving to FL with family because we think we'll be able to build wealth much easier here.

Luckily, we'll be living with family for a bit while we get settled. Right now, my plan is to have my wife do more of the business while I take on a full-time job and do the business part-time. Conservatively, I think we'll be making around $80-$100k/yr ($50-$80 W2, $30-$50 self employed). Crunching the numbers, it looks like we can save around $2-$3k per month.

So my question is... where to go from there? 

I'm thinking maybe the best route would be to work and save for 2 years, then buy a duplex (maybe with FHA loan) and rent one side out. Only issue is 1) that will take two years to get started and 2) Using a loan calculator, it looks like I'll only be able to get a mortgage for $200k which will not buy a duplex anywhere near us (we'd probably have to move out of state).

I've thought about some other possible options like buying a duplex in a different state with an FHA loan and living in it. In the mean time, build a one-room or studio dwelling on the property as well, and then after a year move back to FL.

Really wondering if there's a quicker option than "work for a few years to make money and then start."