All Forum Posts by: Nick Velez

I would check and see if his parents loan is assumable or has a due on sale clause. If he is able to assume the mortgage, I would think that would be the easiest and low cost way to go about it. You may also want to get in touch with a real estate attorney (I am not one) and see if they have any better ideas! 

I am about to get a 30 year fixed DSR loan for myself at the brokerage I work at (David Greens One Brokerage), and I am pretty satisfied with where my rate will be! Let me know if you ever have any questions about DSCR loans in general. Happy to help!

I would definitely get pre approved first, especially in todays market. If a property has several offers and all of them are pre approved besides you, it already puts you in a disadvantageous spot. If you are talking about a 1-4 unit multifamily property, the lender will take a 2 year average of your income and determine how likely it is to continue. There are lenders out there that will lend on small multifamily properties, that wont take into account your personal income as long as you have good credit and the cash to close. If I were you, I would look into DSCR loans, which fall into that category.

Lenders will likely need proof that your income is from your real estate business. Money coming in and out of bank accounts has to be sourced and just because it is coming into your business account, does not mean they will count it towards your income. There are bank statement loans available as well along with loans that approve you on the cash flow of a property and not your personal finances, if that ever becomes an issue.

Hey ella, if your DTI is not heavily affected by your liabilities then it all comes down to how comfortable you feel purchasing something while having that monthly payment. Personally, I would rather keep the low monthly payments on my loans and use all of my available capital to get into real estate. :)

Hey Collin,

as everyone else mentioned, I wouldn't pay anything up front. If you are looking for alternatives, how you thought about doing a DSCR loan? Some lenders can close in an LLC and definitely don't charge any upfront fees like that.

Investment Info:

Single-family residence buy & hold investment in Gainesville.

Purchase price: $170,000
Cash invested: $7,000

This is my primary residence that I have house hacked since I purchased it. I live for free and collect $100 a month in cash flow after accounting for expenses. I purchased this slightly under market value for $170k and I recently got it appraised for $247k after adding some sweat equity to the property. Once I move out and turn it into a full time rental, it is projected to cashflow $600 a month.

What made you interested in investing in this type of deal?

I love living for free and the low down payment e=requirements of owner occupied homes.

How did you find this deal and how did you negotiate it?

This property was sitting on the MLS for about 6 months and needed a new roof and was pretty outdated. I was able to get about 15k off the asking price and negotiate a new roof at closing,

How did you finance this deal?

I used a Fannie Mae home ready loan because of its 3% down payment requirement.

How did you add value to the deal?

I have put a lot of sweaty equity into this property by re-doing almost everything including interior/exterior paint, new flooring, new bathroom vanities, new privacy fence, and much more!

What was the outcome?

I refinanced the home and was able to remove PMI, lower my payment slightly, and pull out about 22k in equity, one year after purchasing the house.

Investment Info:

Townhouse buy & hold investment in Gainesville.

Purchase price: $140,000
Cash invested: $7,000
Sale price: $160,000

This 3/3 townhouse was the first property I purchased at 20 years old with an FHA loan. There were 3 bedrooms and a tiny enclosed porch so I rented out 3 of the bedrooms for $1400 a month total and lived in the enclosed porch until one of the roommates moved out. I cash flowed $300 a month and used all my housing savings to purchase another house hack the next year and turned this one into a full rental.

What made you interested in investing in this type of deal?

I wanted to get into real estate but had limited cash and income from my job.

How did you find this deal and how did you negotiate it?

Purchased off of the MLS

How did you finance this deal?

Fha Loan

What was the outcome?

I lived for free for an entire year (and made $300 a month) and got the ball rolling on my real estate investment journey. After housing hacking for a year, I was able to save enough to purchase a house the next year and repeat the process. I ended up keeping this townhouse for a year as a rental but ultimately decided to sell it to purchase a higher yielding investment in the future.

Lessons learned? Challenges?

Living in a tiny enclosed patio is NOT fun but definitely do able!