All Forum Posts by: Chace Fraser

Hey @Jono Stark , Welcome to BP! I've got someone who could help. I'll DM you her info now

Hi @Adam K.

If you are using a low down payment, it's not really realistic to expect to be cash flow positive. When an investor is looking at being cash flow positive, they are typically putting down 20-25%. If you are in a high demand metro area, it's simply not realistic to expect to be cash flow positive if you are putting down 0-10%.

Now if that is all the capital you have, that is what it is....is it better to keep renting than to buy? Typically it is better to buy. Better to build your own equity through the debt pay down, enjoy the tax benefits of ownership, and garner the equity of an appreciating asset. You just can't expect to cash flow on an initial purchase with a low down payment. Now with time and rent growth, what could be a negative cash flow property might very well become a cash flow king, but that takes patience.

Another way to increase cash flow would be renting out rooms in the unit you live in, either Airbnb or longer term.

Hi @Anh Tran and welcome to BP! Have you thought about building an ADU (which a ballpark figure would be around $100,000)? Also, if you wanted to network with others in the area there is a BP meetup Thursday. Here is a link

@Raj Vora I love the vision and drive! It's rare to find someone (outside of places like BP) who have as much of both as you do! If you need any referrals for good realtors in FL let me know!

@Kenneth Foster I've heard of people putting in the mgmt fee and taking it out. I would recommend managing it yourself while you can handle it but keeping the line item of a management fee in place. If I remember correctly Brandon Turner recommends leaving it in... that way you can make sure it still cash flows after you move out and if/when you decide to hire a property manager. In the meantime you can just stack that extra cash!

Hi @Deven Wolfe In regards to house hacking if you are using a low down payment, it's not really realistic to expect to be cash flow positive. When an investor is looking at being cash flow positive, they are typically putting down 20-25%. If you are in a high demand metro area, it's simply not realistic to expect to be cash flow positive if you are putting down 0-10%.

Now if that is all the capital you have, that is what it is....is it better to keep renting than to buy? Typically it is better to buy. Better to build your own equity through the debt pay down, enjoy the tax benefits of ownership, and garner the equity of an appreciating asset. You just can't expect to cash flow on an initial purchase with a low down payment. Now with time and rent growth, what could be a negative cash flow property might very well become a cash flow king, but that takes patience.

Another way to increase cash flow would be renting out rooms in the unit you live in, either Airbnb or longer term.

Hey @Anthony Janke I agree totally with what @Craig Sloan said.... but why not go with the best of both worlds? Don't rush, but you don't have to wait a year... who says you have to sign a 12 month lease? EVERYTHING in real estate is negotiable. Yes, month to month leases will be a little more expensive but with that added expense you get flexibility. If you say "everything in my area is a 12 month lease" then you're right and you'll never find a month to month option because you won't look. If you believe there are month to month leases out there you'll search until you find one. It sounds like you have 4-8 weeks to find one!

Hi @Dayton Komarek welcome to BP! I agree with @Andrew B.

The best advice often heard is to start with a House Hack. This means buying a 2-4 unit property and renting out the other units. Often times the rent will cover or exceed your mortgage costs. Don't forget to keep reserves for maintenance and capital expenditures.

You can also use the FHA loan, which allows you to put 3.5% down on this property as well. (Also look into the FHA 203K loan)

Another benefit to going with a multifamily is that it can "boost" your purchase price using 75% of the other income to help your debt to income ratio... so $1000 rental is worth $750 to offset any PITI payments. A good thing especially for young adults who have student debt.

Hi @Julian Quintero

As far as lenders go here's my take; as a Realtor myself I find it easiest to have my clients go through lenders I have worked with before. The reason is I know which lenders:

do a good job

stay on top of the necessary tasks

know how to be creative within the rules (some people don't fit into the standard mold of a buyer, and some lenders don't know how to get them approved, and some lenders know how to get them approved)

and which lenders can actually close deals.

Another reason is, as someone like you who wants to house hack, not all lenders are experienced in it. So my recommendation would be to have your agent recommend a lender to you. That's why I think it's important to work with an agent who has worked with house hackers before and therefore worked with lenders who have worked with house hackers before.

I bet if @John Warren cannot help you out he can refer you an agent in your area who can!

@Brandon Horton welcome to BP!

The best advice often heard is to start with a House Hack. This means buying a 2-4 unit property and renting out the other units. Often times the rent will cover or exceed your mortgage costs. Don't forget to keep reserves for maintenance and capital expenditures.

You can also use the FHA loan, which allows you to put 3.5% down on this property as well. (Also look into the FHA 203K loan)

Another benefit to going with a multifamily is that it can "boost" your purchase price using 75% of the other income to help your debt to income ratio. A good thing especially for young adults who have student debt.