All Forum Posts by: John Lyszczyk

You wouldn't have to refinance in order to remove PMI. The bank will determine is current balance owed is lower than 80%. I think what you're asking is "Can I legally move out and rent out the unit prior to the 1 year mark?". My brother and I waited until one year was up. When I told my MLO that we were living in the duplex she said, "Oh I thought you guys were just going to rent that one out right away". I'm not saying you should rent it out immediately haha I prefer to play within the rules and guidelines.

@Dominic M.

Freddie or Fannie loans aren't loan products. They're organizations that buy consumer mortgages. When you get a conventional loan, it may be sold to Freddie or Fannie. Typically, the process goes as followed:

You get your home loan from a bank or mortgage lender

The lender sells that mortgage to Fannie Mae or Freddie Mac

The money Fannie and Freddie pay for mortgages goes back into the pool of local bank and lender funds

Those lenders use the funds to make more home loans for more borrowers

More loan money – i.e. more supply – pushes down lending costs for everyone

Back to the FHA loan, you can eliminate your PMI by paying down your loan below 80% LTV. The bank will likely require an appraisal, and sometimes it's just a "drive-by appraisal". Once that is complete they will remove the PMI.

That's correct. Just a heads up, FHA loans have special inspections. They may require small things to be fixed prior to you buying the house. Either the seller or buyer can complete them. For instance, there was chipping paint on the fascia boards and a large crack in the driveway. The FHA inspector flagged those and made me fix them before closing, so I had to mix concrete to fill in the crack and slap some paint on the fascia boards. No big deal. We closed.

@Dominic M. To my knowledge, you can have up to 10 loans at one time in the state of Michigan. Not sure if the same rule applies in Philly. I don't believe there is a restriction in the type of loan you have, but there are restrictions on how many loans you have in your name. To verify this, I would contact a local MLO and present what you want to do. I don't see why you couldn't get five FHA loans @ 3.5% as long as you qualify and the house passes FHA inspection. The one year occupancy is a requirement for FHA loans.

I've done this with my brother, but we decided to put the loan just in his name. We did that so the loan wouldn't negatively impact BOTH of our DTIs. We were keeping in mind future acquisitions. In Michigan, you can have up to 10 mortgages in your name. We didn't want to have both of our names on the loan if we didn't have to. His name was on the title originally, but after one year we did a quick claim deed into our LLC. Be mindful of how leverage can impact your DTI.

Dump that credit card debt, but if you can still qualify for a loan and keep the car loan I would try and keep as much cash in hand as possible. Having more cash for repairs/reserves will give you a cushion to take on your first property. I agree with @Twana Rasoul on his recommendation to house hack using an FHA loan at 3.5%. That's the type of loan I used to buy my first duplex which I house hacked. Having a tenant offset the cost of living allowed me to save money for future acquisitions. In addition, I got a taste of what it was like to be a landlord/homeowner. Best of luck to you!

Good stuff man! Keep educating yourself and start developing that game plan. Best of luck!

@Sean Ramuchak Lots to unpack here so I'll try to get straight to the point. First and foremost, I think you need to reframe your mindset and continue to educate yourself. BiggerPockets is a great place to do this and this community/website has tons of resources at your finger tips. Start by asking yourself why you want to invest and what your end goal is. Once you've established that, start analyzing deals and taking action to move towards your goals. Don't get stuck analyzing though..you'll need to dive in at some point. 

When I started investing, I was living with my Mom at 27 years old. My brother and I shared a 200 sqft room above the garage. Rent was cheap, but it was somewhat "uncomfortable". My brother and I got along, but my social life suffered. I had to give up privacy, space and special amenities in order to save money. Not to mention going against the grain of social conditioning that we feel like we have to live up to. Society thinks we should have a big house, family, two dogs and a white picket fence by our late twenties. Since I made the decision to avoid all those things and make some small sacrifices, I was able to buy my first two properties within a year and half before moving out of my Mom's house. 

My point with telling you this story is to let you know that you'll have to make sacrifices or live just a little differently than what you're use to. I'm not advising moving back in with your Mom, but evaluate your current living situation to see if you can make changes to meet your goals of buying a house hack deal within the next year. If your current rent allows you to save enough money on paper to buy a house next year, then that's awesome. But write out a plan to see if you can make the numbers work.If they don't work, then you'll need to figure out a way to make it happen by reducing expenses and adopting a minimalist lifestyle. If you happen to land a higher paying job that will help, but focus on what you can control and execute on those things to meet your goals. 

Kind of a long post, but I thought it was necessary to share. Best of luck to you!   

YES! Louder for the people in the back! lol I love hearing about other investors pushing through adversity. This business isn't for everyone and typically it's learned the hard way. Team building is so important and that's why I only do business with people I know, like and trust (last one is most important). Setup interviews/meetings with potential team members to discuss your plans and goals ahead of time. Making them feel a part of the team and project will motivate them to follow through with their word if a precedence is set ahead of time. This is why I love RE investing so much, because we not only learn how to make money and build a business, but we learn one of the most important skills a person could: People skills. Congrats and keep pushing man!  

@Qadre Lewis Depending on the house you buy you may need to get a contractor involved. If there are repairs to be made that you're not comfortable tackling then I would hire someone else or find a friend/family member to help you out. Watch them complete the work on learn from them. 

When I started out, I was a horrible carpenter. I sucked at paying attention to the details and didn't even know the basic terminology of construction and building materials. Thankfully for me I have a step Dad who is very handy. He built his own house and made it self sustaining. He helped me and mentored me in the beginning, but when he wasn't available I had to YouTube what I needed to get done. If a bathroom fan broke, I would Youtube "How to Fix a Bathroom Fan", and that helped expedite my learning/experience. 

 Fast forward three years, I complete nearly all my renovation work on my own. It's not as hard as everyone makes it out to be. It's just like anything else in life, the more you do it the better you become. If you're going to invest in Real Estate, you will want to know everything about your asset and how it works. You'll want to know every square inch of that place and invest time into learning how to manage your asset. As you improve, you realize you have more control than many of the other investment vehicles out there, and you gain the confidence to buy more properties. 

Best of luck to you man!