All Forum Posts by: Josh Young

@Charles Horn without knowing anything about your situation it's hard to say, but your most likely path will be to talk to a lender and create a plan. That plan might look like this: buy a primary residence (1-4 units) using a VA loan, and live in it for a year. Next year buy another primary residence (1-4 units) using a VA loan, move into it and rent out the first one. Keep doing this every year or two. At some point they will not allow you to take out any more VA loans, but you might be able to refinance the first VA loan into a conventional or even a DSCR loan and that might make you eligible for another VA loan again. There are many ways to acquire properties, but using a primary residence VA loan is most likely going to be the lowest down payment and the lowest interest rate available. The biggest thing is talking to a lender, they will help you create a plan.

@Hilton Bothwellmaru can you put a fence around the property and charge for boat and RV storage?

@Jonathan Firouzi some cities have additional requirements, so check with your local laws too, but here is a link to the state law requirements for pools: https://www.azleg.gov/ars/36/01681.htm

@Elton John that does look like a good first deal. Don't beat yourself up over the $15k that you think you could have negotiated down, you will look back in 5 years and that $15k will be insignificant. Over time rents will increase and you will be able to refinance also. When looking at a deal there will always be something you wish was better and there will always be a reason not to do the deal, but if you do your due diligence and the numbers make sense, pull the trigger.

@Alfred Dublin that looks right. Over time rents will increase and you will be able to refinance when rates decrease.  If you wanted more cash flow now you could put more money down or buy the rate down, or both. I like to include debt pay down and 3% appreciation as part of my returns, they are not cash flow, but they are part of the deal and should be considered.

If you own your properties in cash then the S&P 500 probably does have better returns in most cases, but one of the biggest advantages of real estate investing is the use of debt as leverage.  I would recommend the book "The Millionaire Real Estate Investor" by Gary Keller.  This book talks about your return on equity and keeping your money active by doing cash out refinances and 1031 exchanges into bigger properties to grow your portfolio. 

@Chris Seveney I agree. Leverage must always be offset with cash reserves. I'm all for using lots of leverage, even paying a premium for it when the numbers work, but no reserves is just asking for trouble.  It's like Warren Buffet says "When the tide goes out, you see who's swimming naked." 

I love helping people of all levels become real estate investors, but working hard and saving money is part of the game, if someone can't save enough money to have at least 6 months of PITI payments in reserves then they probably aren't ready.

@Corey Conklin great post! This is talked about in the book: "The Richest Man in Babylon" 

The clay tablets with the information of how to make, save, invest and keep wealth are worth a lot more than the purse full of gold.

@Account Closed as long as the mortgage payment isn't much higher than it would be on a normal SFH with no in-law suite then it makes sense. The whole point of house hacking is to subsidize your living expenses, so you can save money (and you have to live somewhere). You will be saving money, learning to be a landlord, you will own real estate and your mortgage will be getting paid down. In my experience you can always find a reason to not buy a deal, you can always wait for a better deal, but the best advice I was ever given is: do your due diligence and if the numbers make sense, pull the trigger.