All Forum Posts by: Nicholas U.

I live in a college town and things aren't that simple.

In my college town they are starting to build high rises and such so investing near campus is not wise in my opinion.  I do believe students will be back because there are major benefits to in class education, but buying around college campuses have their own risks.  

I don't see massive selling in many areas regardless and you will still be paying a premium for paying close to campuses. 

My answer is why not both?

Ok this is a huge decision and if you are getting married you shouldn't rock the boat right from the start.  That being said, getting a duplex or something that is good space where you can rent out the second part is something that might be a compromise.

Duplexes might be bigger than a Tri-Plex or Four-Plex so if you want to you can live there for a good amount of time and be happy, but it gets you into the investment world at the same time. 

If later both of you decide it was a good or bad decision it is pretty easy to bail or add on.  

Simple answer I think you want is that they need to be on the mortgage and they would use their credit, debt to income, and such as a validation.  

I would also be cautious if you doing this with anyone other than family.  If you do then make sure you hire a lawyer and setup terms before signing the loan.

Yes sorry that is what it sounds like...

So some banks don't do multi-family loans.  These are investment properties that are 1-4 units under your social security number.  They can do a commercial loan but that requires an EIN number and has less favorable terms.  

So what you want to do is make sure you are talking to a residential loan officer.  What they are probably trying to do is give you a 10 year loan that is amortized over 30 years.  This will keep same general payment as a 30 year loan but at year 10 the entire balance is due.

So I try to structure my accounts into different manners.  

1) I have 1 main account for each property.  In it I try to keep a minimum level for mortgage and maintenance for year.  This depends on property value and other things.  Roughly a max of $5,000.00 per property I try to hold.  This maybe a lot but it is very safe.
2) I have 1 CapEx account. The reason for this is that I view CapEx different from general maintenance and want to track it differently.
3) I have then account for future savings for purchases.  

This is a simple way of keeping track of each property for tax purposes. 

My original investment property has a rate of 3.25%. If I did a cash out refi not only would it destroy the rate but there are other costs too in my area. I wouldn't disagree in most cases where rate is the same, or if the goal of the HELOC is just quick cash access in case there are issues.

 Single family homes in my area require at 20% down payment.  Generally I can get 20% down up to a TriPlex but once I get to Four Units it is 25%.  This differs sometimes on bank requirements.  

The Governor of Indiana just extended an order preventing evictions and foreclosures.  I suspect this will extend to other states and while it doesn't solve the eventual problem of when these orders ends it does delay it.  

I have very good tenants and try to stay in contact often, but I am interested on what will happen to the rental market if this extends 6 more months.  Indiana is offering rental assistance but the amount of assistance probably won't last long.  

What do you guys see in your current market?  What do you think will happen once these orders end.

Buy a multifamily home in which you live and the landlord.  It will be work but you will only need 5% down.  The more units the better.  Reading is great but I find that going out and just looking at properties will start giving you a deeper understanding.  

That being said I strongly encourage you to go start looking at places and understanding the market first.  Good properties go extremely fast so you need to understand the differences.  If you do make an offer hire roofing and plumbing professionals to make sure there are no issues.  If the house is older (80+ years) you want to make sure it doesn't contain any knob and tube wiring.  There is easy tells by walking a property in regards to knob and tube but it is just something you need to be aware of.  

Finally, be conservative.  Budget high on yearly maintenance, insurance, property taxes (your County Assessors website is helpful here), mortgage interest rate, and such.  If you have a family member who would be willing to co-sign on the mortgage it will probably help a lot.  

I started out buying a single family home when I was 19.  Looking back on it I should have bought a multi-family because they are more limited and risks are lower.

Visiting here is a good first step, but understanding the area you want to buy is very important.  There is a lot to do so don't jump in, it might mean letting a good property go at first, but if you don't understand what you looking for then you taking big risks.  

First Welcome to Bigger Pockets!  The people here are friendly and can be very helpful.  I generally read more than I post but wanted to chime in with some things to think of before investing out of state.  I generally am one who tries to invest nearby because I understand the area's better, but if you can get people to help you (realtor/management company) then that is great.  But here are a few things to think of.

• What is the property like
  
• What kind of Management Companies and Services are offered
• What would happen if there is a dispute?  Are you able to handle dealing with not being in the State

These are just a couple but #1 I would make sure you find an EXCELLENT management company.  That means one that not only will find tenants and handle the payments but also properly monitors your investment.  This may come with extra fees but it is important.  Some management companies have a real-estate piece to their business.  What is helpful with this is that you might get heads up if properties are opening up and they generally want to keep you happy so they can provide excellent advice on buy options.

The reason I say that is this.  Where I live a lot of multi-family homes are owned by people from California or other states.  A number are now for sale because they bought the properly without thinking of all the potential costs but because the places need a lot of work it isn't easy to sell.  Buying turnkey properties will probably be important for you, but don't trust that it says it has a new roof.  A recent property I backed out of was because of this.  After inspection I had a roofer come out and confirm a lot of issues.  It would have cost me $60,000 to fix it properly.  

Now I noticed the property appears to be pending sale again but that isn't my problem.  Someone is going to get stuck because they didn't properly research what they were buying.  I believe a number of people will lose a lot of money eventually because the market for rental properties is already inflated in my opinion.  So using the Rental Calculators and asking people's opinions here is a great to start understanding what you might be underestimating for a cost or forgetting about.  If you aren't making 10% cash on cash return I personally don't think it is worth it.