All Forum Posts by: Mohammed Milord

@Manny Vasquez Thanks so much for your insight on home warranties. If you have a home warranty for your investment property, why do still need to save 2-3 months in cash reserves for the property?

0 Votes

Long Island, New York

Quote from @Clayton Plummer:

Yes, it is important to have cash on hand. If you're doing well for yourself, you're making about $100/door from a rental after EVERYTHING is paid. $100/month is $100/month, but it doesn't add up too fast at first.

The basic rule for the amount of cash to have at hand is 3 months of ALL expenses as if the rental was unoccupied and you had to pay all the utilities on top of the full Primary mortgage, Interest, Taxes, and Insurance (PITI).

As well, it's pays to have a bit more because life happens.

Good Luck!

@Clayton Plummer Could buying a rental property that is already occupied mitigate the risk of not having immediate cash on hand the cash reserves?

0 Votes

Long Island, New York

Quote from @Manny Vasquez:

I also recommend to get a Home Warranty for your investment property, just like @Clayton Plummer recommended above. There are a few Home Warranty companies such as American Home Shield, First American Home Warranty, Choice Home Warranty, Old Republican Home Protection, just to name a few. This will definitely come in handy just in case something "big" needs to be repaired or replaced. As a general rule of thumb, I usually strive to keep about 2-3 months of mortgage payment reserves. This has worked well for me and my properties.

@Manny Vasquez What is the difference between a home warranty and home insurance?

0 Votes

Long Island, New York

Quote from @Nathan M kiefer:

Quote from @Mohammed Milord:

I am thinking about using gap funding for the down payment on my first rental property as a buy-and-hold investor. I don't have any money saved up but don't want that to hold me back from getting started in real estate investing. I want to ideally find an off-market single-family property as my first deal using g this strategy. Would that negatively impact my ROI? I'm not interested in seller financing as an alternative because I'm an introvert and not very good at sales. Is this a wise move? Is this strategy even possible???

Save your money, investing as you described is a falacy in REI. While possible to do after you have many properties where it can be paid off quickly I would not recommend doing it out front.

using this method to circumvent saving cash will only lead to over leverage and a false feeling of investing to slow you down later

@Nathan M kiefer What do you mean by over leverage?

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I am in the process of looking at single-family properties for my first rental. I don't have any cash on hand for the cash reserves. Is it important to have the cash reserves already saved up BEFORE you acquire a rental property, or is it okay to just set aside a percentage of your gross rent to fund the cash reserves after the investment property is acquired? How much money do you need you need in cash reserves for every rental property? I would appreciate any advice!

1 Vote

Long Island, New York

Quote from @Erik Estrada:

Quote from @Mohammed Milord:

Let's say you bought a property using a hard money lender, and you put the property in an LLC. Is it possible to than refinance the hard money loan through a conventional bank if the property is in an LLC?

Hey Mohammad,

You may refinance the loan if the property is held in an LLC however many lenders will require you to close in a personal name.

You can close in an LLC with a DSCR loan and best of all is that the rates are getting much better on these compared to a conventional mortgage, with less paperwork to qualify.

@Erik Estrada Thank you so much!

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Hi, I am a new investor who is having an issue getting into real estate investing because of funding issues. How likely is it to get a hard money loan with no money down for a rental property?

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I just wanted to know, would there be an issue if you wanted to use a 1031 exchange if all of your properties were in a holding LLC?

0 Votes

Long Island, New York

All Forum Posts by: Mohammed Milord

Mohammed Milord has started 12 posts and replied 34 times.

Post: How do you build cash reserves when you are just getting started as a landlord?

Post: How do you build cash reserves when you are just getting started as a landlord?

Post: How do you build cash reserves when you are just getting started as a landlord?

Post: How does everyone feel about using gap funding as a buy and hold investor?

Post: How does everyone feel about using gap funding as a buy and hold investor?

Post: How do you build cash reserves when you are just getting started as a landlord?

Post: Can you refinance a property with a conventional loan if its in an LLC?

Post: Can you refinance a property with a conventional loan if its in an LLC?

Post: Is it possible to obtain a hard money loan with no money down???

Post: Can you use a 1031 exchange if your properties are in a holding llc?