All Forum Posts by: Nathan Platter

Hey @Joshua D.

• You need closing costs, so add 5% ($25,000)
• Needs repair costs (unless they're currently rented) add $39,000
• Unless you're taking over the loan, you'll need a down payment, change 0% to 25% ($125,000)
• 15 year AM is fine, you could also do 30 years
• Management is typically 8% of gross rents, so pretty good

The Rent/Price ratio looks too good to be true

Most investors struggle to reach the 1 % rule in B class areas, and this is a 3% rule. This package looks like a warzone purchase. If that's your specialty then great, but property managers often refuse to manage D class properties with all the involved headaches and the safety of their staff.

The details of FHA very, but here are some broad answers (as of June 2018) as they were quoted to me

for MN prpoerties:

• Interest Rate: 4.2%
• 3.5% is the minimum down payment
• DTI is roughly 30% so you can buy a property that's 3x larger than your gross income.
• 2 years employment history and tax records
• Seasoning, not sure, likely 1 year
• Under FHA rules, you must owner occupy for a minimum of 1 year as your primary residence
• Yes, you can attain additional (only conventional) loans while occupying the property
• No Private or HML

The best person to answer FHA questions is a mortgage lender/banker

Hey @Mindy Conant ,

Finders Fees and referral fees are state-regulated by the Chamber of Commerce. Assuming California is fine with a realtor paying a non-realtor a Finder's Fee, that dollar amount is completely negotiable between you and the realtor.

Hey @Ken Thom ,

In Minnesota, you are not obligated to disclose your intention for the property after acquiring ownership. The lender will need to know that yes, but the seller shouldn't need to know what you'll do with the house since it'd be your house.

Hey @Calvin Lipscomb ,

Can you provide more specifics? What is taking 6 hours versus the seller agent taking only 3 hours?

Hey @Joe Scheffold.

As of June 2018, most banks will lend 75% for an investor buying an investment property. $25,000 means the most expensive property you can buy is $100,000

Without knowing your situation or location, consider house hacking. Basically, if you owner-occupy a residential (1-4 unit) property the bank will lend up to 95%, meaning you only need 5% down. That $25,000 can now buy a $500,000 property. Major opportunity there.

Action plan (and in this order):

1. Talk to a lender/banker. Tell them your intention (owner occupy, own a rental but live elsewhere,...) They can then tell you what they can do to help you make that happen. They'll also write a Pre-Approval letter stating, "We here at Happy Bank will lend Joe $320,000 to purchase a residential property."
2. Talk to a realtor who has helped clients buy 2-4plexes. Tell them you have a bank pre-approval letter for up to $XXX amount.
3. Look at properties that can generate good rent/price ratios. Many use the 1% rule
4. Once you've submitted an offer and the seller accepts, Talk to a Property Inspector. They'll find out the structural situation of the property.
5. You and the seller renegotiate the situation know all the pros/cons of the property.
6. Assuming the deal is still a GO, go to closing.
7. Ta-da, you now own an investment property!

Hey @Lisa Hodges

Forgive me if this post sounds too simple, my intention is to answer your question.

Assumptions: Assuming your goal is to attain financial freedom, meaning not obligated to work a day job, you'll need passive income to afford that lifestyle. You'll need dividends, rental income, or some other way of getting money without clocking your time to get it.

Most investors wanting the above things choose to own rental properties. If you don't have the funds to buy rentals, you to get money (active income, day job income) to afford to buy those properties.

Many investors choose to make real estate their active income (being a real estate agent, flipping houses, wholesaling properties,...) because those jobs create profits or commissions, meaning the more successful they work the more money they make. Most jobs (e.g. Business Analyst, Pharmacy Technician, Bricklayer) get paid by the hour/year, and get no bonuses for their extra success at their role.

My suggestion at this point is to find money that can buy rentals. That money can be found by borrowing or partnering with family/friends/coworkers who want to buy rentals and add yourself as an owner of that rental property. You found it, they bought it, you both can co-own it.

If you're more of the "lone wolf" type, boost your income so you can buy your own rentals and start building that passive income so you can afford to not work your day job so hard.

"Where did all the houses go" could be answered by, "they're not for sale, but they're for rent" which pushes the price up when a house becomes an income-producing asset for the owner.

I can't imagine having to wait 20 years to buy the first house.

The way apartment communities are getting fancier (pools, athletic facilities, walking to retail, BBQ's,...)  the allure of owning your own house fades. 

Agreeing with @Jordan Moorhead , there are easily 15 duplexes for sale in that area, 5 of which are nice enough to require minimal touchups.

Hey @Adam Widder ,

You're on point with the cashflow and crime. When they're selling for $170,000 and renting for 1600/month, they can approach too-good-to-be-true.

I do think the stadium will generate more commercial investment to the area, but I'd have to ponder more how that would play into appreciation/rent/demographic changes.