All Forum Posts by: Julius Dixon

Thanks for the response @Justin Fox . Going to have to try to clarify because I'm dumb haha. So say the rate for "good credit" is 5% (I actually don't know what's a good rate so if you have a benchmark that'd be really helpful). I'd multiply that annual rate times the purchase price over a 30 year period (should I use 30 years?) and then divide by the number of payments (30years*12months)? Also, could you please clarify by "add .25 to .5% and go from there? At what increments do I add these values.

Also, you've mentioned the insurance payment - what is the $60/month based off of and how does the number increase or decrease? Is it based off purchase price, property value, your credit or what?

Finally, how does the mortgage payment change based off the amount you put down? For instance, is there a higher/lower interest rate based off what you put down or is the payment just larger/small by a factor of how indebted you are?

Thanks!

Hey guys, does anyone know a rule of thumb to use when calcing mortgage payments? Just trying to figure out some assumptions for the model I'm making. FYI I don't know too much about how different credit scores will affect my mortgage payments, so I'd also appreciate some guidance which incorporates high vs. low credit credit scores.) Thanks!

Thanks for the response @William W.! As a follow up, why have you heard that it's a bad idea to put real estate into a corporation? My understanding is this is fairly typical, in fact, @Matt Turbitt is suggesting putting it into an S Corp just above. What do you think? Thanks a lot

Hey guys,

I'm reading a REI book and it is talking about verifying the income on a property before making a purchase. This seems obvious but how this is done more specifically and what prevents a seller from inflating numbers, and how can you independently verify current rent rates and occupancy? Is this a buyer beware type of situation, or are sellers contractually bound not to inflate their numbers?

Thanks,

Julius

Both fair responses, thanks for getting back with me guys, it's much appreciated.

Really appreciate your response Bishoy. Yes, we are all starting at banks. Do you think this will make a difference when applying for a loan? I've never applied for a loan before, so I don't know whether they'd take expected earnings appreciation into account as a way to offset a small credit history. I definitely take your point about not wanting to do it with this many people, but I think with more people involved (and we are all close and with similar goals), we might be able to make financing that first deal easier and we'll also be able to share responsibilities as they arise. Shared responsibility was pretty important to us as we will all have pretty long working hours. Also, are you even allowed to get FHA rates if it is this many people applying and living together to qualify as "owner occupied?" I've only ever heard about it as one person moving in, or that person with their spouse who would obviously be a part owner as well, but I've never heard about it for more than one unrelated person. Would love to hear about your experience in investing as well. Again, thanks for the response, and I definitely hope to hear from others too.

Hi,

Long time reader and first time poster here. I am a recent college grad who has super thankfully just begun a relatively high paying job. Alongside 5 other capable friends who are from my school and also in my general industry (think starting salaries in the 80-110k range with very high expenses due to our location), we are researching next steps in purchasing a rental property. We all graduated this past June, so we are all just beginning to build credit and save. A few questions - would it be possible to syndicate an FHA loan for 6 unrelated people who planned on living together as roommates? We planned on buying a 4-plex, but one of the units will ideally have 6 bedrooms so that we could all fit somewhat comfortably. Is this allowed under FHA guidelines? Also, it would be incredibly helpful to hear other's perspectives on credit insofar as borrowing for the loan is concerned. We will ideally make our purchase in one year, after our current one year leases have all expired (we each pay roughly $2000-2500 in rent each month if this is relevant), and our credit history will be from June of 2016- the date of purchase (this is actually for 3 of the 6 of us, as the others have more credit history). I believe that with the FHA, our downpayment would be 3.5%, but I am unsure of how interest rates will be calculated or if credit will be extended at all to us as we are young, even with our education and earning potential in mind. I'm definitely hoping to not have to depend on parents as guarantors or as funding sources. I'd love any advice on this situation, and I'd love to hear what your immediate thoughts might be on 6 recent college grads becoming roommates and business partners. I'm going to a bank tomorrow to run some of these questions past a business credit specialist, but I'd love to hear thoughts from you guys as well!

Thanks!