All Forum Posts by: Sarah Brown

Deals vary depending upon the person, and even upon the deal.  I would ask your investors more questions about what they are looking as far as property and return go.  Then you can start narrowing down your search. 

If you can swing more doors, swing more doors!  I would have no issues recommend 3-4 doors to start with.  There are a ton of books about being a landlord.  Either start reading, or find a property manager you can trust until you are comfortable taking over. 

@Patrick Giblin

You need separate entities. So for example, you would give the $20k to Giblin LLC (or whatever) and then that entity would loan to the two of you. Then you secure that loan against the property to protect your interest. It can be a $0 upfront cost loan with $0 payments until a balloon date of choosing.

Hi Marshall,

Congrats on the new deal! That sounds amazing.  Are you guys planning to move out and into another rental?  When you get a loan like the one described, you can't get another one for a year.  That is an "owner occupied" loan, and they assume you will be there for a year.  You may get tagged for potential mortgage fraud if you pull too many at once.  Another good option would be to do a cash out and use the cash as a DP on a second house with a conventional loan. 

I guess if it was done appropriately and at a good price, I would probably just pay him.  I would definitely have a conversation with him about it though.  There may have just been a misunderstanding, and a conversation will show good faith

Great story!  I am glad everything worked out.  Funny that people tend to get a little nervous about a house with history. 

Would it make sense to treat the 20% down as a private loan, charge interest to the partnership, and then split everything else 50/50? 

5+ unit complexes are going to be commercial, which means you can't do FHA or a standard conventional loan. You will need to do a commercial loan. This requires 25% down generally. If you want less, I would encourage you to look at private financing or owner carry.

@Jasmine Calin

I don’t think there is a minimum. It’s not a monthly fee. Just a pay as you use it sort of thing.

This is always a careful balance of maximizing profits, but maintaining good tenants.  I try not to price out my good tenants unless its an extreme discrepancy and I can't cashflow.  The cost of turning is significant, and the cost of a bad tenant is even great. I would consider the affordability for the tenant and start there.