All Forum Posts by: Matt Nico

@Paul D.

Im sorry to tell you this, but your strategy will not work in Florida, because there are no Duplexes to buy. Florida has a lot of Single fam homes in developments and HOA's. Im from Philly and I was used to the duplex and row homes, but they dont exist in FL much.

I house-hacked a SF home for my first 3 deals and had roommates. The home still cash flowed with me living in it. If you want to sacrifice some of your privacy, then you can do great.

Good luck,

Matt

@Domenic Santarelli

I agree with most of the other people posting before me, but i have done 3 renovations while the tenant is occupying.

If you want to go that direction, id ask them if they would want a new, fresh remodel. Explain to them (like I do) that you are trying to improve the home value and ALSO the space for them to live in. Usually tenants appreciate when i update things and make things nicer. Ive redone kitchens, bathrooms, paint, flooring, you name it while tenants occupy. Just be clean when you can and keep the area safe.

Good luck,

Matt

 Hey John,

I'd try to avoid the big banks. I'm pulling in thousands of dollars in cash flow from my rental properties, and my wife works a job as an engineer making a lot of money, and Wells Fargo is rejecting a $50,000 HELOC I'm requesting. I know the times we are in suck for lending money, but its still crazy I cannot get approved. I have yet to find a small community bank yet but it looks like that's my option. Hope my story helps you.

@Brett McManus love this freaking post man. You are taking the first step.

If you are planning to acquire multiple properties and invest in a lot of real estate, i'd recommend this:

1. Go to your accountant and create an LLC or other business entity. Banks require you to have 2 years of an operating business before you can get any kind of loan, so starting that process now saves you A LOT of time down the road ( I'm running into this problem now). 

2. Open up a business account....with 2 checking accounts. 1 collects your rent and holds your cash flow, while the other holds your security deposits. This keeps all of your finances easier. If you cannot get a business credit card yet, then I'd say your idea of using 1 designated card for business purposes should get you by at first. 

3. I think spreadsheets work great at first. I used a spreadsheet for my first few properties. After you get a little bit bigger and have more cashflow coming in, i'd say go for quickbooks online. I use that and its cheap, easy, and there are a lot of Youtube videos out there to help with it.

4. Hiring out great contractors is important, but i'd recommend for your first deal to maybe take care of some of the smaller stuff on your own. Easy tasks you should be able to do is Paint, A bit of landscaping, and cleaning. That should keep some of your money in your pocket at first. And the tools required for those tasks are a paint brush and a roller, and a shovel/rake.

Good luck man. Feel free to message me if you have any questions about anything.

-Matt

@Rob Bianco

Try looking at something called an umbrella policy. Its pretty cheap and is supposed to give a good overall coverage across all your properties.

-Matt

 Greg,

I use a combination of Quickbooks online and Cozy for payments. Cozy allows you to upload documents and assign rent and other payments and even does background checks. The tenants seem to like it, and it allows for bank account and credit card payments.

Then I use Quickbooks online to sort every house out individually and give me my profit / loss for each house broken out individually. This strategy works well now. If I have a lot of properties I'd probably try out the bigger software's that are more housing / landlord specific like appfolio or buildium. They talk about those on the podcast a lot.

Happy housing,

Matt

 

@Sean McCluskey      I quit my job some time ago so I never did the calculations with it. But if I did, I would be able to acquire a mortgage of about $275,000. But assuming I had my job still, this would get me the 4th house, but after that I would run into this same exact problem for the 5th house as the banks continue to count mortgages against me and no rent.

So what I'm after is a more permanent solution. I will be looking into the commercial mortgage area for future rentals, and I already have seller financing in the works. In addition to that, I am approved with my real estate history and ability to get a loan with no income verification at 15% down, so saving for that along with other methods seem to be my best plans of attack at the moment.

 

@Luciano A     You are not the first person to suggest this to me in the thread. This makes zero sense. My mortgage rates are so low right now on the properties I already have that switching them to a commercial mortgage with its higher rates and lower terms will almost add a 4th mortgage to my debt. It wouldnt make any sense. I understand the idea, but its just not in my best interest.

 

@Peter Nikic

I have a plan in place that I will share..... I know mostly everyone is living close to paycheck by paycheck in my properties, but this coming months rent isn't an issue for my current tenants. Its after that that's the problem. 

What I have decided is that next month if tenants are having trouble paying, I will apply their security deposit to the rent for them, and explain to them that I am taking a big risk by giving you back your deposit to cover rent, and that I hope that they will in return respect my home and the things I have provided in it extra carefully. All of my tenants and I have good relationships, and they will all have no problem with this. Then once this whole thing blows over, I will give them a period of time to accumulate their deposit back up again.

Hope this helps.

-Matt

@Laura De Loera     -This is helpful Laura, thank you. I want to make sure I have this down: So you are saying with this type of loan, the lender will look at the property being purchased and then they will analyze the rent that I will get getting, and assuming that the rent at least covers the mortgage, they will be comfortable giving a loan on that particular property?

How would I go about finding a lender to make this type of loan?