All Forum Posts by: Mike Trzaska

I've seen multiple properties in Cleveland Heights with a third floor unit, my agent just advised to move the the stove/range out of the third floor. I know investors in Shaker and Cleveland Heights that have done this, but I'm not sure it is legal. Can you reach out to a property manager familiar with the area?

@Brendon Woirhaye thanks for your response. If I calculate the debt to income ratio given the max price we would spend on both homes I would be in the 40-50% range. I've seen some conflicting information where some sources say this should be good and other say this will not fly with a mortgage lender. 

Typically, how do investor who acquire multiple properties within a short period of time satisfy this debt to income requirement of conventional loans? I know if they have 2 years of landlord experience they can count rental income, but what about someone just starting out? Assuming they go outside the realm of conventional loans.

Hi All,

I'm looking for a little feedback on a plan my wife and I have been mulling over. My wife and I purchased our current SFH in 2013, this was before i knew about bigger pockets or house-hacking or anything like that. For the last two years my goal has been to purchase a multi-family rental in the Cleveland area, but I have been on the outside looking in. Mostly, I have been absorbing as much information as I could and saving enough capital for a 20% down payment.

My wife and I are now thinking about selling our SFH to "upgrade" to a larger house with a yard, and by upgrade I mean in size only, we are looking for another house that needs work. I deally, we would like to sell our house at a profit and purchase a larger SFH (primary) with a 5% down payment and use the remaining profit to purchase our first multi-family rental with a 20% down payment.

The Facts:

Purchased our current SFH in Cleveland's Tremont neighborhood at 90k with a 30 year fixed @ 3.5%. Took out a subsidized home equity loan for 65k @ 2.5% amortized over 12 years. The neighborhood and the house have appreciated significantly over the past 3 years and current appraised value of the home is 230k. Currently, we owe 145k total across both loans on the house.

Our Plan:

Sell our current SFH. We are assuming we would sell at the current appraised value of 230k, freeing up 85k in equity. After paying a real estate agent (6%) and closing costs (4%) we would have 76,500 in net profit. We would then purchase a new SFH as a primary residence with a 5% down payment, looking for house less than 300k so max down payment would be 15k (willing to put more down if necessary). We don't want to increase our monthly payment by much, currently at $1,100. Use the remaining $61,500 to purchase a multi-family rental. Purchase price would be less than 200k @ 20% down, so we would have a max down payment of 40k leaving a balance of 21k for repairs or improvements and a good base for capital expenditures that come up down in the first few years.

I would love to here the group's thoughts on this idea, and if this is totally off base or not smart at all. I am a beginner and to me this seems logical, but may not be feasible as I have not seen it discussed much here. What other factors do we need to consider? Interest rate changes, getting two conventional loans in a very short time period if not simultaneously, tax implications, etc.

Appreciate any feedback.

Mike

Thanks for the welcome @Jerry Padilla @Account Closed .

Right now I am just going through the strategy for learning the ropes that most of the experts here have laid out: Books, Podcasts, Forums, etc. I hope to be investing in the next year and was thinking about starting my first deal with a partner, either a close friend or my brother. Anyone have any thoughts on doing a deal with a partner that you have a personal relationship with?

Hi All,

My name is Mike and I'm from the Tremont Area of Cleveland, Ohio. I came to this site with hopes to learn as much as I can, and when the time is right, both financially and personally start investing in Real Estate. I am a total newb, as the only Real Estate experience I have is buying a home of my own and working with a contractor to do a significant renovation. 

I feel that Cleveland is starting to turn the corner from up and coming to full blown resurrected rust belt city. I want to be a part of that resurgence in whatever small way I can. I am particularly interested in up and coming neighborhoods, like those of Tremont, OHC, Detroit Shoreway, Edgewater, Slavic Village, and North Collinwood. Currently, I am starting to save up a down payment and really learn as much as I can about REI and the markets that I am interested in.

My ultimate goal in getting into this is to "retire" by 45, and by "retire" I mean to be not reliant on a 9-5 in the corporate world for my income. Whether I actually retire and stop working a 9-5 would be completely up to me at this point. My less loftier goal is just to be less dependent on the corporate world for income. I am almost 28 and I have spent the last 5 years working in a few different jobs, all of which I have never really fallen in love with nor had a passion for. I want to be able to pursue my passions in life, and it is yet to be seen if I will find that in the corporate world, but I do feel that REI can be one avenue to follow my passion for real estate and give me flexibility to pursue my passions for fly fishing, snowboarding, and spending time with my family.

I wish you all the best in whatever endeavors you are pursuing and I hope to posting here regularly as I start learning and investing.

Thanks,

Mike