Quote from @Maylin Cuello:
Quote from @Ben Einspahr:
@Maylin Cuello there is only so much you will get out of self education. They rest you will have to learn by doing. Kind of like riding a bike :) I understand how you feel. We have all been there.
My 2 cents:
1. as others have mentioned, you do not need to pay for mentorship
2. Dont do STR arbitrage. It is just something shiny + plus you do not get the full benefits of REI (debt paydown, appreciation, depreciation, and cashflow)
3. Stick with HH'ing in your back yard. Keep it simple
Next steps:
1. connect with agent that is familiar with HH'ing and has a solid track record.
2. connect with a lender to see how much you can get pre-approved for. This will help you identify how much you can afford. (if you find a good agent, they will bring you the rest of the team you need. If not, find a new one)
3. start analyzing. Ill DM you the spreadsheet I use. I invest in Denver but spreadsheet works in all markets.
Baby action steps.
Best of luck.
Thank you for the spreadsheet! And the baby steps, all ordered for me without having to pay 3K for them 😝 As per your advice and everyone else's, I am looking into getting a preapproval. Tampa Bay isn't the cheapest market, so hopefully I can find at least a duplex not too far that fits within whatever my preapproval numbers end up being.
I would consider a 4 plex instead of a duplex. If you house-hack 4 units with a FHA loan at 3.5% down where you can repeat the process in a year you will scale much faster. FHA house hacking is super powerful and to not use it to its fullest is a waste. You need to work with a good mortgage broker who will communicate all the risks and real numbers and who knows how to work with FHA for MF (I know a couple). You can borrow up to $1.24M on a 4 unit in Hillsborough, Pinellas, and Pasco with just $43.4k down + closing costs. Also, being a teacher and a first time home buyer gives you an advantage in that there are down payment assistance programs that are just ridiculous.
- Eligible frontline workers can receive lower than market rates on an FHA, VA, RD, Fannie Mae or Freddie Mac first mortgage, reduced upfront fees, no origination points or discount points and down payment and closing cost assistance.
- Borrowers can receive up to 5% of the first mortgage loan amount (maximum of $25,000) in down payment and closing cost assistance.
- Down payment and closing cost assistance is available in the form of a 0%, non-amortizing, 30-year deferred second mortgage. This second mortgage becomes due and payable, in full, upon sale of the property, refinancing of the first mortgage, transfer of deed or if the homeowner no longer occupies the property as his/her primary residence. The Florida Hometown Heroes loan is not forgivable.
The lender will also take the current rental income into consideration for the debt to income ratio. Ideally you would live there rent free or cash flow a little. When you move out your unit will be all cash flow. Also, if you want to STR and you are interested in managing it yourself, starting with the next vacant unit would be a good test for you and couldn't be any closer for you to self manage. Doing so will make the property bring even more profit and if you like it and the property is right then you can turn the rest of the building into STR one unit at a time as the LTR leases expire. Sometimes the big numbers scare people. I'm working with a guy that has a VA entitlement (close to FHA loan) and he is worried about going from nothing to having a $1M+ property. Here's the thing I've found out the hard way. Slow and steady is comfortable and that comfort leads to not really taking much action and not really seeing much result. When you jump in with both feet, hopefully you are scared, and hopefully that drives you to continue to take action. Either way the momentum that comes from it is powerful. Nothing has dissuaded people from making money in real estate more than not taking action. I suggest surrounding yourself with people who are taking action, continue listening to BP and all the RE content you can, and focus with intentionality on the goals you want to achieve relentlessly. I would love to talk about it more if you are ready.
