All Forum Posts by: Paul De Luca

Hi Jeff,

I highly recommend reading the Book on Managing Rental Properties by Brandon Turner for managing your rental(s) as a business owner. You'll learn about systems that you can utilize to streamline the management of your property. To learn more about how you can optimize tax deductions, depreciation, etc you should read The Book on Tax Strategies for the Savvy Real Estate Investor published by BiggerPockets.

I don't recall the episode numbers, but I know there have been several BP podcasts that have featured active duty service members that explain their strategies. Check out this blog post by Brandon Turner for investing in real estate while in the military. Good luck!

https://www.biggerpockets.com/...

Have you discussed the possibility of using a Home Possible loan with your lender? It's a specialty mortgage program for first-time homebuyers which allows for down payments of 3-5% and features reduced PMI. There's an income limit you cannot exceed though and your maximum DTI ratio is 45%. If you've already under contract for a property though it's likely too late.

I've been using this website https://themortgagereports.com... for some ideas myself. It offers a few other ideas like the following:

•  The Conventional 97 loan:
  Loan size may not exceed $510,400, even if the home is in a high-cost market.
• The subject property must be a single-unit dwelling. No multi-unit homes are allowed.
• The mortgage must be a fixed rate mortgage. No ARMs via the Conventional 97.

I've also been doing some reading about the “piggyback loan” program, which is typically reserved for buyers with above-average credit scores. 

"It’s actually two loans, meant to give home buyers added flexibility and lower overall payments.

It's an 80/10/10 loan. The beauty of the 80/10/10 is its structure.

With an 80/10/10 loan, buyers bring a ten percent down payment to closing. This leaves ninety percent of the home sale price for the mortgage. But, instead of giving one mortgage for the 90%, the buyer splits the loan into parts.

The first part of the 80/10/10 is the “80”.

The “80” represents the first mortgage and is a loan for 80% of the home’s purchase price. This loan is typically a conventional loan via Fannie Mae or Freddie Mac; and it’s offered at current market mortgage rates.

The first "10" represents the second mortgage and is a loan for 10% of the home's purchase price. This loan is typically a home equity loan (HELOAN) or home equity line of credit (HELOC)."

Hopefully other investors or lenders can chime in @Zack Karp.  I'd be interested to hear if anyone has used the 80/10/10 successfully. The HomeReady program seems like a good option too if you have a partner that has not yet purchased their first property, since you can't own another property in order to be eligible. 

Nice work! How many rentals did you purchase and how did you finance the purchases?

Hi Mandy,

It depends on your investment strategy and lifestyle goals. Do you want to house hack? Do you already have adequate capital to keep buying? Are you trying to grow your portfolio quickly? If the goal is to grow fast and buy a bunch of rentals, it makes sense to sell your primary residence and utilize the equity you have accumulated by funneling it into more rentals. Or maybe you could use a HELOC to tap into your equity and use it to acquire more rentals.

Sorry to hear that'd Stessa is giving you trouble, I had not heard of the software before. I've used Mint for personal finance and only recently started using QuickBooks Self-Employed as an agent for $12/mo. It sounds like the QuickBooks Simple Start package ($12.50/mo) is probably the best fit for you. I'm just a fan of the Intuit softwares like Mint, TurboTax, Turbo, QuickBooks, etc.

I'd say the most important qualities of an agent are:

• Be a good communicator 
• Conscientious
• Attentive (active listener)
• Proactive
• Connector of people (contractors, lenders, inspectors, etc).

Different clients demand different skillsets, but I think buyers & sellers will be well-served if their agent has the above qualities.

Exactly what Forrest said. It's smart to build relationships with many banks, particularly local banks because of their flexibility. Even if they don't ask, it may be a good idea to open an account with the bank to show that you're serious about doing business with them.

Since you're a first-time home buyer, I would suggest investing the $25k in something relatively liquid so you can access your money easily if a major expense came up. An index fund, for example. 

 If you want to be more aggressive, find a partner that will house hack a multi-family property and go in 50/50 while your partner lives in & manages the property. That way you'll have some rent money coming in.

What you can do with $25k largely depends on your market and level of risk you are willing to accept.

Check out the Tenant Screening Ultimate Guide under the Education tab > Guides. That will help you avoid placing a bad tenant in your rental. Also, start planning for the future and setting goals with where you want to go with your real estate investing. Start with the end in mind. A good lender will be able to offer strategies for you to acquire more rental properties with different loan options.