All Forum Posts by: Nick Burkhardt

BP Community, we did it! My fiancé and I just closed on our first 3-unit multi in Southern Maine and are so excited to finally be off the sidelines, out of my parents basement, and in the game!

The property is currently running at -$750/mo. with us occupying one of the 1-bed units (2-bed/1-bed/1-bed). We took the unit in the worst condition and will make improvements over the next 2-3 years while we save for the next one. Like most millennial investors we have student loan debt. Our current plan is to pay off our largest loan so we add +$500/mo. to our disposable income, which will take about 10 months. We will be able to put away close to $30,000 over the next 24 months. So in total 34 months to be ready to look again. We have a window of about 40 months from now before we want to have our first child, so I need to maximize our 2 incomes and make a significant move.

34 mo. Prop#2 Plan

I am thinking about going Single-Fam with an in-laws apartment 5% down around $230K (+$5K closing/fees = $16,500) which would leave me with 10-13K for improvements (most properties in my market req. a day 1 reno. budget). That would free up Prop#1 to make its projected +$600/mo. Basically we'd stay at the same overall disposable, but own two props (appreciation/paydown etc.), and live in a single family home.

Debt Reduction Plan

The other option is to spend 38 months and throw ALL disposable income at our student loans, to maximize our disposable income. Only problem there is we run out of time to utilize both incomes to save for the next prop. We'd have to wait for the 6 year (20% of 30-year fixed) to Refi or HELC and use that capital to go get another multi or said single fam.

My question is this; how can I improve my plan? What advice could you give to help me get there quicker? Thanks so much!!

@Wesley Mitchell Thanks so much! We are dealing with our first challenge; getting longtime tenants to come up to market rates (rents). Excited for the summer in our first home/Investment! Hoping within the next 4 years to go get another one with the equity built through improvements and mortgage pay down. The amazing thing is the next one doesn't have to be an owner occupy if we don't want to. We have options!

So excited! My fiancé and I just closed on our first investment property in Scarborough ME! Its the firs house of a main road in a beautiful town. After over a year of searching in an extremely hot market we found one that fit our criteria. We paid a little more than what we would've liked to pay, but we got way more than we could have expected, and in Scarborough, you need to have some DRAW.

The prop is a 2-1-1. We will be owner occupying, and trying to get the rents up to market rent (a disparity of about -$300). I would like to put coin laundry in the ultra clean basement to add value for potential tenants. I would also like to add landscaping and some "communal" amenities, such as patio, fire pit and 10'x10' storage unit in the cleaned out basement. Are there any other strategies that you guys would employ to get the rents up? The units themselves are in good condition, without jumping finishes, fixtures and appliances to a new level.

Thanks so much for your advice! So excited to get my hands dirty, to INCREASE value on an already valuable property.

-Nick

@Dean Poff ii thanks for the info! So maybe my lender is the same and I’d have to same the 10%-15% DP. I’m more than ok with that! To me that’s so worth it to lose the MI during the life of the loan rather than FHA which stays with you forever and is more restrictive. Is there a set point at which the MI comes off the loan? Is it a set percentage of the loan paid? How does that work?

@Ceasar Rosas My plan is to buy the first one live in it until I have enough capital built for the next DP, then as long as there’s no rule saying I have to stay in the first residence for X amount of time, I would occupy the second prop and fully rent the first. I would repeat this as long as my lender will allow on conventional 5% loans. Does that make sense? Would I be better off saving for the 20% conv. and getting rid of the MI off the bat?

Hey BP!

About to make my first investment in the 4-6 months and I'm already thinking about the next deal. I have about 37K saved and will need to utilize a low down payment loan program. Initially I was thinking FHA was the way to go, but after getting to know my market a little better, I am reconsidering, and thinking it may be better for the long run to go with a Conventional 5% down loan. This way my PMI drops off after 20% equity is built and it adds to my cash flow.

My question is, can I keep buying 5% down conventional properties, barring the lender gives me the loans? Or, must I have that 20% equity built, BEFORE reinvesting in another property with the same loan?

This is only my second post and I'm LOVING the feedback from all of you! Thank you so much for your valuable advice in advance!

-NB

@Adam M. How do you assess ARV? With comps? Actual appraisal? Learn as you go? I like the idea of the 70% rule just need an example in an expensive market (for what you get) like mine. When does 70% fluctuate? For what variables?

@Cara Lonsdale you mentioned in a previous post, that there's a way to be the GC yourself and sub out work, could you expand on that? I would be able to do most of the work myself so are contractor bids just a way for the lender to estimate appropriate funds, or is it that they actually oversee construction and require receipts etc.? @Matt K. Essentially I'm asking is it possible to get that 25K, or whatever it is you need for rehab, and use it to do the work yourself, thus being able to accomplish more and stretch those funds?

@cara lonsdale that would be GREAT! Currently I am going with my brokers lender which is under the same parent company, but it would be great to compare. Thanks so much!

@Lumi Ispas so you're saying you can just take out an FHA 203K do the rehab and create equity/pay down your mortgage to the 20% mark, you can then refi and utilize FHA 203K again??