All Forum Posts by: Sam Fickel

 I don't have any rentals yet, but one thing I'd like to do is get to the point where I can cash flow enough to pay my personal mortgage. 

There's a big difference between debt, and debt paid by others. The mortgages on the rentals, in my mind, are not the same kind of debt as my mortgage. So if I can get to the point where I have OTHER people paying MY mortgage, that's a big milestone in my eyes. 

Everyone in the REI community always seem to have extremely high standards for the tenants they choose - good credit, no criminal history, on time rent, absolutely 0 evictions, etc. I've never met someone that didn't have these standards.

And I 100% get it. This is a business, not a charity. The goal is to make money while providing housing, and bad tenants are more expensive and more headache.

But that makes me curious....where does everyone else go?

And on top of that, how the hell do sex offenders and convicted murderers find housing?? I mean, even the lowest-standard landlords still have rules against those two, so where can they live when they get out of prison?

To be clear... I have the same high standards for when I finish my live-in flip, so I'm not trying to do anything different here. Just curious!

I have had several clients take loans against their 401k instead of taking out the funds. It's a really solid option actually. 

Since the loan is secured against your own money, the monthly payment does NOT have to be factored in the DTI.

As you might understand, you won't make any gains in the market because those funds are no longer "actively invested" 

Yes, the max LTV is 80% usually, where primary can go up to 90%. Maybe depends on the state? I've never done it myself so I don't know intimate details, I just know that it's an option

@Joe Wodaege I just realized I didn't exactly answer your question. You don't need the funds to be seasoned at all, since you can paper trail the funds using the settlement statement.

@Joe Wodaege hey, that's awesome to hear! If that's the case, you've got a couple options:

-Buy your next house with FHA. The 100 mile requirement is only if you're using departure residence income, but if you can qualify for both mortgages, FHA is the way to go.

-Do a cash-out refi on your current primary to pay for the 15% down payment on your next duplex, though I don't recommend this because you can't promise to live there 12 months, so it would be an investment cash-out, which carries a few points and higher rate, and for the whole 30 years. Also, your max LTV is 75%

-Get a HELOC against your current primary and use the proceeds for a 15% down payment on your next duplex. You'll have a 2nd mortgage payment and at a higher rate, but at least you can eventually pay it off and maintain your current payment and rate on the soon-to-be previous residence. Also, the max LTV might be as high as 90%.

If you can't go FHA, I'd do the HELOC with Conventional

Conventional requires 15% for owner occupied, no way around it. If you refinance your current FHA loan into conventional, assuming you have enough equity, then that would work

@AJ H. Thanks, I'll look more into that!

Don't hear enough of these kind of posts, thank you for a little grounding!

Hi there,

BLUF: I have [some] money, but not time. How do I find/vet/choose a BRRRR partner?

Back story:

My wife and I have had plans to buy a large farmhouse on acreage, but after finding out that we're expecting our first child, we've decided to stay put in our starter home with $100k equity right next door to an elementary school that we were planning on renting out and cash flowing $400/mo. But we'll stay here for now. Therefore, instead of making plans to buy land and build, I'm looking to finally start investing in real estate after 1 year of sitting on the sidelines! My goal: Purchase my first investment before I become a father in late April/early May.

I'm very committed to my job as a mortgage loan officer, and have a reputation of availability. It's my competitive advantage, and I love what I do with no intention of quitting any time soon. But I'm commission-only, and love the idea of creating a passive stream of income "just in case" and eventually paying off all debt and retiring at a ripe old age with $20,000/month of pure cash flow and 0 mortgages. 

Currently, I could probably use a HELOC to take out $50k, have $20k in cash, and a $23k credit card that I can use for rehabbing, for a grand total of around $93,000. I have more of course, but I'm pretty sure this is the most my wife will let me get away with. Everything will have to go through her - the deal, the partner, the tenants - for final approval. Especially the partner, so I want to be prepared with how to present this idea to her.

Anyway, I can't commit to spending a ton of time analyzing deals and doing rehab work, so I'm thinking the best way to go about this is to find someone who needs someone with money, and is willing to do a majority (90%?) of the analyzing, 99% of the rehab, and property management. I'm thinking 50% equity position, 50% cash flow, and 100% property management (5% of gross rents, if self-managed). That's fair, right?

Problem is, I have no idea how to find people who know what they're doing - Those with experience probably don't need the funding, and those without the funding probably don't have experience. Obviously, there are exceptions, and I want to find them. But how?

I'd like to do my first deal in my market (SE Washington, specifically the Tri Cities) to gain the trust of my wife, but otherwise I'm totally open to investing anywhere after that.