All Forum Posts by: Olivier H.

@Aaron Caddel Thank you so much Aaron ! Very detailed answer and I'm afraid I'm not so familiar with IRR and therefore I probably don't completely understand to be honest. My DTI is good, but even though I'm also in California and even if I'm sure there's deals everywhere, I also feel like the entry ticket to start is a bit too high and I'd rather move and start in another state to get acquainted and feel more confident than investing here and be overwhelmed and scared. Your answer is simply very interesting I will have to do more research on this specific topic, I have the feeling that I'm missing something important here. On this regard I also wonder in which way the fact that you collect rent as an investor could potentially make you reach another threshold or tax bracket. Therefore does the profits still outweighs the potential tax increase ?

@Kuriakos Mellos Thank you ! I am the same, can do very basic tasks but wouldn't trust myself yet with drywall and all that (far from it :) . Licensed and references! I get that. I read stories all the time where the contractors weren't pros and left the job undone or messed up or even damaged something! So definitely a big question for me as to work with the right team. I'm currently in California and as much as I like the weather, I don't see myself starting my investment journey here. It's expensive. I was thinking of completely moving to another state and start there. I do a lot of research on MLS like Zillow but I just can't shake the feeling that I have to go and be there, at least for a start

@Sean T. Oh Thank you Sean ! Yes that was exactly my question ! I always missed the part where you actually have to refinance the first loan in order to get the second one. Sorry having a aha moment :)

Also according to you what is a reasonable debt to ratio ? That’s a question I’m asking myself, what is allowed and what is safe, and if taking on too much debt to start would minimise my chances to investing in a second property for instance

@Kuriakos Mellos Thank you ! These are all great advices and congrats. 5 units sounds like sci-fi to me now :) I would be very happy to start with my first. It is daunting but I’m convinced that going against those fears would make you wonder later why not having started earlier. The rehab part is stressful because honestly I’m not handy. I have other skills but this I just don’t know. So you have to trust your guts and the contractors and it’s definitely a step I will need to take. It’s just about that first step for me. Do you invest around your area ? I would like to do a distant brrr, but as a newbie I just see more room for errors right now

@Sean T. Thanks Sean ! Not quite there yet :) but will definitely let you know. I tend to be more like you. Just rent the whole unit. But to be honest, the potential cashflow as well as the trends regarding renting per room sounds appealing. Just don't want it to become a nightmare. Specially as you have to live there too ! :) Also there is question regarding the FHA, I hear people say you live in the unit and repeat the process. Do they actually mean that you can apply for another FHA after having lived in the previous one for a year ?

@Kuriakos Mellos Thank you so much Kuriakos ! According to all the researchers I have done these past years, this is indeed the way to go. Also sorry for your nightmare experience. I’ll be honest this is the type of stories that keeps me and newbies in general from taking actions (also suffering from a mild case of analysis paralysis:). But I guess with the rewards comes the risks or with the risks comes the rewards as they say ! I love the Brrr strategy in theory, it’s just the practice that is daunting. The choosing the deal and the rehab part imo

@Sean T. Thank you so much Sean ! I totally agree with your method. I definitely think that a 2-4 units is a good way to go and leverage the terms on an FHA loan. Regarding this strategy, would you go the route of renting per room in order to increase the cash flow, or the potential issues of having more tenants could bring more downsides ?

@Dan Weber thank you so much for your answer Dan. Really appreciate! My understanding in regards to the minimum down is that you can eventually use the cash left over to invest in another property. Which makes sense to me

Hi everyone,

Been a long time observer but this is my first post so please excuse me for going back to basics

I’m trying to figure out what’s the best strategy to start and if in your opinion you should buy your first property as your primary (and do some type of house hacking) or buy an investment property first.

Second part of the question is for your first loan is FHA always the best option and which route would you go. Borrow as little as possible or as much as possible and why ?

If you made it until then thank you, much appreciated