All Forum Posts by: Account Closed

@Chris Baxley

Awesome story! I have entertained using this strat down the road for ourselves. thanks for sharing!

Do you mind sharing how much equity (in %) is in your primary before and after the heloc?

My wife has expressed concern getting overleveraged with this strat. What are your thoughts and/or limits for borrowing 100% (some mortgage + heloc) on a property?

Absolutely man. Best thing is start talking with lenders. They should be able and willing to answer these questions for you.

Best of luck! 

@Charlette Gitonga

Welcome! I have been asking myself this very same question. I think your best bet is to find and talk with people that do these different jobs. What do they like/dislike? Is it fulfilling? What are the challenges? What is the barrier for entry? Etc.

I have been reading and speaking with people to understand which side of the Real Estate business I am best suited for. Just yesterday I pretty much ruled out being an REA. Sounds extremely challenging and interesting but it simply does not match my personality.

Just some things to think on. best of luck!

@Brent Vossler

I was speaking with a mortgage underwriter local to me and he explained that with the current state of everything, it is unlikely a lender will count your future rental income towards your DTI. Especially without a history of running rentals and having proof of a qualified tenant with a signed lease.

And even then the amount they use is not based on the rent you collect. They will use 75% of a "comparable rent schedule". This is based on the rental income of comparables in the area and is performed by the appraiser. I would not count on a lender using this income in your case.

@Kyle Fitzpatrick Have you used the BP rental calculator? You can plug all that in and understand the cash flow, CoC ROI, and much more.

Typical Expenses I use are:

Maintenance 10%

Vacancy 8%

CapEx 5%

PM 10%

So assuming 800/mo per unit (conservative side of your fair market number)

You will bring in 2400/mo in rent for income

Expenses

taxes $292/mo

insurance $83/mo or $1000/yr (you will want to get comparable rates here for your area)

Maintenance $240/mo

Vacancy $192/mo

CapEx $192/mo (I raised this to 8% based on your comment that it will need a few big ticket items)

PM $240/mo

Trash/Lawn lets assume $100/mo

Mortgage on $135,000 @ 4% for 30 years with 20% down is $515.61

Total Expenses: $1854.61/mo

2400-1854 = $546/mo positive cash flow.

I would take 550/mo on a triplex costing 135k!

I know you said you would like to live in one unit but I strongly recommend you do these types of analysis based on you not living there (unless you know you will live there until you sell it)

Hope this helps

congrats @Nathan Olds !!

Welcome @Karah Collins!

Keep interacting on here and best of luck to you with everything!

@John Boyd Honestly, that could be a very long or very short list based on what you already know about the property. Can you provide what due diligence you have already performed/what you already know? Which pieces of the home buying process are you most comfortable with and least comfortable with?

Hi @Nathan Nelsen! Tip, you can plug all these numbers into the Rental Calculator and share a link to the report instead of typing it all out :)

I agree with the others that it is wise to include Property Management. Without the calculator I have a hard time verifying your calcs are correct but if they are, sounds like a solid play

@Marcus Pugh Welcome Marcus!! 

If you have not done so already, set up some keywords to monitor. Particularly based on the what and where your strategy includes. I have found local people to connect with just by monitoring keywords related to nearby towns and states. I get 100+ forum hits every day based on a dozen or so keywords. I have found it invaluable!

Also sounds like you are headed in the right direction. Stay committed my friend!