All Forum Posts by: Account Closed

@Brandon Proctor 

I forgot one very cool option! You can find duplexes/triplexes to live in that are near the price of a regular SFR. The bonus here is that the banks will account for the fact that you will have the other unit(s) rented out and may approve you for more money. The rent coming from the other units will undoubtedly ease your financial burden on the mortgage payment every month. This is a great option if you're ok living with common walls. You can also use FHA loans on 2-4plexes as long as you intend on living in a unit for at least 1 year - just like a SFR

@Brandon Proctor 

I've also been aggressively persuing investing with little money down.  Depending on what you're interested in doing specifically with investing, there are different options I've read about.  I'll list a few below with a few comments:

1: FHA - requires you to live in the residence (at least one year by contract), lower interest rate, but required mortgage insurance, 3.5% down, very strict appraisal and inspection FHA requirements, you can only have one FHA loan (within a certain distance of each other). There are different FHA loans to accomodate structural or cosmetic fix-ups if needed.

2:  Do you have a Key Bank in your area?  They do "community loans"... same sort of story where you need to live there for at least a year.  Don't know much more about it other than lower interest rate.  If you don't have a Key Bank, you can always check around your local banks/credit unions to see if they have something similar.

3:  Hard money lender - you can google search or search bigger pockets for more information.  Sometimes they will lend 100% of what you need but with the trade-off of charging you a very high interest rate (10-18%).  Typically lending options last up to one year before you need to refinance or use your exit strategy.  I believe this type of lending is best for doing flips.  

4:  Does your job have a benefit/discount on loan information/closing costs/etc?

5:  Owner financing - You can easily find properties that owners are willing to finance and be your "lender".  I find them often on Craigslist.org in the real estate section.

6:  Lease Option/Lease Purchase:  Like a taste-test, you can "rent" for however long the lease lasts, then purchase using some of the "rent" you paid as toward your down on that property.  

I've been studying lots of financing and am always hungry for more information.  Much of this information is referenced from bigger pockets and from a book I read on lending, "Mortgage Secrets All Borrowers Must Learn - But Lenders Don't Tell" Gary W. Eldred, PhD.  It might be sort of dry, but extremely informative about your buying options.  

I hope this helps!

@Kerry Baird Thank you for the websites!

I agree with @Joe Villeneuve and @Bill Jacobsen .  You shouldn't look at cashflow %.  The problem with using a % on that is if you buy a lower priced home, that % you used may be too small to cover if something goes wrong.  So a hard number of $300 like Bill mentioned is a more comfortable way to look at the numbers.  Make sure you don't forget to include all possible monthly and annual expenses in calculating your cashflow.  

Good luck on your search!

Kyle

@Joe Impagliazzo I forgot to mention my next purchase was supposed to be a triplex/4plex. They will only accept 20-25% down for that. I suppose I could rethink it and go after a duplex or SFR. I do have excellent credit and can get the lowest interest rates... However, i definitely think FHA has a major role in purchasing properties that otherwise would require 20% down. I don't intend on waiting to save the money and would rather get into more units faster.

There is a piece of paper from a fortune cookie posted in my area where I work.  It reads, "Be prepared to modify your plan.  It will be good for you."

I think I can do this!  

I would like some advice on what to do with my finances at this point - if I should do anything at all.

Portland, Oregon:

Currently, I have a SFR which gives me around $300/mo cashflow on an FHA loan at 3.25% interest rate. I have $15,000 in available funds right now. In order to purchase a home with the least down, I would have to get another FHA loan and refinance my current SFR into a conventional loan. The problem with that is it would consume all $15k (and some change) to get me to the lenders required 25% equity in order to refinance.

The benefits of refinancing I can see:  

(1) More monthly cashflow

(2) Available FHA financing possibility on my next purchase

(3) Potentially faster monthly saving toward the next down payment.  

(4) Waiting until after tax season will approve me for more because this year will include rental income for the first time.

The drawbacks so far:  

(1) Back to $0.00 funds available for a down, 

(2) Waiting until after taxes are filed (and received... potentially 6 months) to get serious on buying again, 

(3) Higher interest rate on a conventional loan

(4) Paying closing costs and other fees add up to around $5-6k.  Seems like a waste.

I'm sure there are more benefits/drawbacks, but I can't think of them.  Does anyone have input for my next move?  Real estate CPA advice?  Getting a move on things sooner gets me closer to my goals sooner.  But I also recognize that waiting might be more advantageous at times.  Is this one of those times?

I appreciate any feedback given.

Here is a link for Podcast #3:  Podcast #3

@Raquel Arias 

I suggest checking out BiggerPockets Podcast #3.  They specifically talk about credit cards vs other options.  You should check it out.

As a dental hygienist, I recommend you stop biting your nails!  You can accidently cause recession of the gums ;-).  Words of wisdom from another newbie... check your numbers with each step of your process.  Keep your goal in mind at all times.  Be incessant and a go-getter.  Run your first deal by the people here in the forums.  Post the numbers and see what the general vote is.  

That's an early retirement!  Good luck to you two on your goals!