All Forum Posts by: Josh Young

@Griffin Malcolm Lenders have certain rules they have to follow, so talking to a lender to help you create a plan is a very important step.

@Griffin Malcolm you need to talk to a lender, they will be able to tell you exactly what you can qualify for, but yes you should keep your current house as a rental and buy a new primary residence. The lender will be able to lower your DTI by counting 75% of the market rent against the mortgage. I'm not sure they will count room rentals, and I'm pretty sure they will want a copy of the lease, but the lender will be able to help you iron out the details to help you create a plan, so you can keep it and buy another property. As far as raising the rents on your friends, room rental rates can vary a lot, the real question is, if you raise it on them can they find it cheaper somewhere else, and how confident are you that you could fill the vacancy at the higher rate if they do leave.

@Stephen Rodrigues I can certainly understand wanting to invest out of state when you have high prices and high property taxes in Massachusetts, but I would be cautious about investing in an area that has a flat or even declining population, it might look like you are going to get some cash flow right out of the gate in year 1, but you will never get the big win of appreciation which is much greater than cash flow when it happens and if you never get the appreciation you won't get rent price gains, so your cash flow won't appreciate as much either.  If you are looking for a specific market, I'd search the forums in that area and find an agent that is also an investor who is giving good advice on the forums. 

If you have any interest in learning about the greater Phoenix area I'd be happy to chat with you, I'm an investor here and an agent, and I help other investors find, analyze, buy and manage properties.  We have population growth, job growth, and a lot of development happening here.

@Kerns Churchill I would make sure that they are also on the lease as a personal guarantee, I would charge first, last, and security deposit, and I would make sure you are charging a premium of at least 25%.  I would also make them responsible for paying for all repairs under $500, except major mechanical and roof. Think of it more like a commercial lease.

@Alejandro B Yoon it's very important that you read and understand your state's Landlord Tenant Laws, here is a link that will provide your answer https://statutes.capitol.texas... if you scroll down a little you will see that it appears you were within your seven days, plus it looks like you could have had a fifteen day extension for having to order the part, although that extension would require some paperwork.  I don't see anything anywhere about requiring a landlord to pay for a hotel.  You should also research to see if you have any local laws that could affect you.  I would apologize for the delay in having to order the part and let them know that you were trying your best to get it fixed as quickly as you could.

I agree that small multi family could be great too, just be careful not to overextend yourself with only $100k if you need to rehab, stabilize and have reserves.

@Tony Nuttall I can certainly understand that, I also have two young kids. Well if you consider the Phoenix market for an investment property I'm an investor and an agent, I help other investors find, analyze, buy and manage investment properties. We have some 3/2 SFH here that might work for you. We have population and job growth, lower property taxes, and relatively newer properties.

@Jorge Vazquez if interest rates drop prices will accelerate, people are willing to pay what they can afford/qualify for as a monthly payment.  Prices have already started to move up because people are anticipating the drop in rates in hopes of refinancing in the next few years.  Overall housing affordability (as a percentage of income) for renting and buying is a problem and will continue to be because there is a housing supply shortage.  I don't think rents are outpacing mortgages, according to Redfin its more expensive to buy vs rent in every major metro in the US with the exception of Detroit, Philadelphia, Cleveland and Houston. But it's normal for it to be more expensive to buy, because you also get principal pay down, tax benefits, appreciation and you can refinance.

@Tony Nuttall you could use as little as possible, like 3-5% down to buy a primary residence and turn your current home into a rental, then do the same thing next year and again the year after that, this will get you three rentals. Or you can go buy one investment property at 20-25% down and have one rental.

@Michael Benton you can rent out the rooms while you are living in it, this will help you save more money in the meantime, but I would not recommend that you spend your reserves on another property, that is when bad things happen, you want to always have 6+ months of PITI payments available. A year might seem like a long time, but it will go by fast, use the time to keep learning, analyzing deals, and saving.