All Forum Posts by: Travis Beehler

 I bet if it was cursed, you could call some hippie kids with a van and a dog.  They could solve your mystery! :)

 I thought the issue from the housing implosion was people buying things they clearly couldn't afford, not tenants leaving rentals.  If you get your number correct in terms of rents, purchase price, etc, you can easily ride out any vacancies.

But then again, it sounds like you're more of a buy and flip kind of person, while I'm a buy and hold, yes?  If that's the case, then it's just a matter of different strategies.  But, let's not forget, flippers lost a ton of cash as well.  But we shall see. :)

Travis

 You bet!  It varies from lender to lender, but generally speaking, I believe it's 40% debt to income ratio.  Someone correct me if I'm wrong.  

How much did you put into the house out of curiosity?  Down payment, closing, etc.  I'm just curious about your rate of return.

Also, I would suggest commercial if you can. A bank is going to want to see your debt to income be low once you make your first commercial loan, and you don't want to be in a position where you're totally tapped out. I'd suggest also setting up an LLC for your commercial loans to protect you from lawsuits, etc. and put those rentals under that LLC.

The advantages of a commercial loan is that they don't count that against your debt to income ratio, as they only care about the cash flow of the "business", meaning the house that you buy.  Thus, you can buy as many as you'd like as long as you have the requisite down payment and reserves.  At least, that's the way it is with my lender.

Good for you on pulling the trigger on the deal though!  It's a very scary thing to do, and I wish I had started YEARS ago.  Had I done that, I would be retired now.  (I'm 40).  If you have any other questions, feel free to ask!

Travis

 Question, if the economy stutters, how will he be in for sleepless nights?  The only one I can think of is if he can't make the balloon payment because he was unable to obtain financing at the time.  Renegotiate and get financing a year down the road.

 Love the mentality you have!

Reminds me of a sign I saw somewhere about being an entrepreneur:  Entrepreneurship is living a few years of your life like most people won’t, so that you can spend the rest of your life like most people can’t.”

Sounds EXACTLY how I think.  I've gotten a lot of people telling me I'll fail, I don't know what I'm doing, or how because someone else in our circle of families tried it and failed, that means I'll fail too.

Those will be the first people I visit when I retire at the age of 50, and they've got 20 years to go.

 Hi Stephen,

I was in the same boat as you.  I was worried about debt/income ratio, when someone mentioned commercial financing to me.  There are lenders out there that will do a commercial loan, but for residential properties.  It may take some leg work to find them though.  For example, my lender that I most recently dealt with would do a 20 year fixed, 4.6% loan with 25% down, plus 6 months worth of reserves.  That meant when I bought a $40k house, I'd need roughly $12,000 cash to buy it (10k for down payment, plus 194 per month x 6)

Hope that helps you out!

Travis

Thanks!   I appreciate it!

Awesome!  Thank you!  I'll be sure to give him a call!

You and me both.  If the market does crash, I'll be going on the biggest buying spree of my RE career. :)

No worries at all.  I'm in IT, so I know how sometimes it takes a short bit to get everything ironed out.  Thanks for the awesome site!

Travis