All Forum Posts by: Ryan White

I'm a fairly new investor and wanted to get some feedback from the experts. I just moved out of my house because I bought a new one for my growing family and rented out the old house…so now I officially have my first rental. I'm still very new to being a landlord but At some point in the near future I want to purchase another rental to increase my portfolio. In the current state of the market, houses are more expensive and interest rates have not come down to offset that much. Even with the high rental rates that I can get in my area, most properties are priced too high and mortgages are too expensive to make most houses a good deal. My goal is cash flow but PITI almost washes out all cash flow. How are you approaching the current market when it comes to purchasing rental properties? Are there any strategies you'd be willing to share to help me out as I approach purchasing another rental property in this market?

thanks

Ryan

I'm a new real estate investor looking to purchase my first BRRRR property. Unfortunately in my area, I'm really struggling to find properties on the MLS that I can get cheap enough to qualify for the BRRRR method (most are overpriced or my purchase + flip cost is higher than the 70% ARV that is desirable to make the BRRRR method work). The most important thing to me is to find a property that I confidently know I can invest and pull all or most of my capital back out because I'm confident I want more than 1 property and I can't have all my capital tied up in my first property.

My real estate agent has told me that in my area, there are too many investors that are willing to pursue houses on slimmer margin (i.e., they are willing to purchase higher than the 70% ARV) and that I should really target off market deals. While I'm still going to look on the MLS, I was interested in hearing if anyone knows of good ideas for obtaining off market deals? I'm specifically interested in local recommendations. If there are any local wholesalers around I'd love to connect as well.

Any help would be greatly appreciated.  I bet I've looked at hundreds of deals and seen a dozen houses recently that got snatched up before I could even put in an offer.

@Reid Chauvin well that’s unfortunate.  I don’t mind doing a cash out refi 6 months later but I really hate doing that cause it’s 2x closing costs in a 6 month span, and that’s not as ideal.  Thanks for the info!

I'm talking with a seller right now that for multiple reasons is willing to sell me the property below market value. At this moment, I'm expecting to be able to obtain it for around $140k and the market analysis shows that it'll appraise for around $200k. So it has built in equity and LTV would be right at 80%, assuming purchase price and appraisal come in as expected. I have to use an investment loan to obtain this property. Does anyone know if I can use the equity in the home I'm buying to secure my investment loan so I don't have to put 20% down? Are there lenders that allow that? In principle it makes sense to me, otherwise, I'm buying the home with 20% equity built in and 20% down, so my LTV starts at 40%.

Thanks for the help.

@Caleb Brown 

Yeah I'll definitely look into it more, but I'm primarily concerned with being able to get the right tenant to live there for the market rental price. The houses are being rented right now for $1200 and $1400 and the fair market value is closer to $1600 and $1800 based on CMA. Current PM says I'd never be able to get someone to live in these houses for fair market rate based on their location...thanks for the thoughts

@Caleb Brown 

Thanks for the info.  I spoke with the current PM yesterday and she said these houses aren't located in an area that would do well on the market.  The area attracts primarily section 8 folks and therefore, it might be difficult to find a non-section 8 tenant that would be interested in living here and paying the fair market value that would demand.

I do like the prospect of considering switching the houses over, but my other concern would be finding the right tenant that I would feel comfortable knowing they can make their monthly payments (i.e., the area probably isn't going to attract many folks with good credit).  One benefit with section 8 is knowing that even if the tenant credit score is low and/or they are unable to make payments during some months of their lease term, I've still got guaranteed income from the government rather than none.

I'm a new investor and have an opportunity in front of me that I'm looking for advice.  I have someone willing to sell me 2 section 8 homes (4 BR homes both built in 2009) and they have been rented out to the same families for the past 6 years.  One tenant pays the full rent (voucher plus their portion) and the other doesn't pay anything (just the voucher is paid).  The zillow estimate for these properties is around $200k, city assessment is around $185k, and he's willing to unload them both to me for somewhere between $140k-$150k each.  

I'm looking for advice on section 8 rentals (experiences, lessons learned, recommendations, etc.) and an understanding of whether they typically appreciate well or not.  My assumption is that I'm getting them under market value (based on zillow and city assessed values) and my numbers indicate that they'll both cashflow more than $200/month.  However, I'd end up having to do a cash out refi on my current house to obtain the capital required to purchase them.  Looking to be informed on section 8 purchases before I pursue this offer.  Note that I'm currently more in favor of pursuing this offer than not, especially if I can get them for $140k/each.  

Thanks!

@Destiny Hodges I’m from Newport News.

@Monique Pett I'm in VA. Close to Williamsburg/Norfolk/Va Beach area.

Thanks for the thoughts and I’m definitely beginning to talk with a loan officer and hopefully will get some good information.  What do you mean when you say wholesalers?  

I've never heard of that DSCR loan but I'll see what I can find out. Sounds like a good option.