All Forum Posts by: David Scott

My first property was a duplex and it has been a great house hacking experience. It gives you a lot of flexibility. I rented out one side and had a roommate in my side. This allowed me to live 100% rent free and save enough cash to do a full renovation on my unit and eventually start renting out part of my unit as an air bnb as well.  I just refinanced and used that money to buy another unit. 

A SFR would not have given me that experience. Nor would it have allowed me to test the waters as a land lord. I think a duplex is the perfect place to start. Don't let your brokers fears influence your decisions. This is your adventure into real estate and there are many ways to do it. You have to take the path that makes the most sense to you.

I've been in the current duplex for a little over 4 years so I'm well past the required live in period. 

My primary question is do any of you know of a loan product or if I can get an FHA loan when I already have 2 mortgages. I am a new investor and trying to really get started. here is where i'm sitting right now on loans.

Loan 1 = VA loan on duplex - 0% down (actually made 2500 on closing) 260K loan - rented an living in one side but i have a pending lease and have to get out

Loan 2 = Conventional on town house - 20% down 145K loan - currently rented

Loan - needed to acquire duplex - one side is rented and i will move into the other side  - Offer accepted at 310 and I have enough for a 10% down.

Udoka,

You'll want to go to your local banks and see what line of products they have to offer.  There are a few government programs in which they allow for a construction loan to be rolled into the mortgage itself.  

You'll need to get a few quotes from contractors for the cost of renovation for that property. What usually happens at this point is the back will assess the value of the property and the ARV to see if the numbers make sense and it is a good investment for them. These loans are harder to get but they do exist.

The product I'm most familiar with in the FHA 203K but I know there are other lines of products out there. Also I want to emphasis and try to impress upon you that getting a loan is not "getting a loan" you are purchasing a product and the interest is the amount you pay for that product in the case of a loan. A loan is a purchase of debt, and traditional methods of purchasing debt is very cheap at this moment in history.

Millennial here and buying homes.  There are a lot of us buying.  There have been quite a few of the BP podcast's that have featured my generation thank you?

If this is your first deal I would HIGHLY suggest looking at other forms of financing first. There are a lot of options for first time home buyers. I personally would try an FHA 203K for a rehab. With an FHA you can put as little as 3% down and you get preferred interest rates.

Conventional loans can also have a construction loan component as well and you will get lower interest rates as well.

A hard money lender will tend to have higher interest rates and points.  This is a method of securing a loan when the conventional methods have been exhausted and you no longer fit the debt to income ratio that banks like to see.

Taylor,

KC is split into a lot of area's as you well know.  It really depends on the neighborhood.  Midtown is hard right now because the rail system is going in and condo's are a dime a dozen.  You're neighborhood is great for value add type of purchases at the moment.  I know of one deal in the Hyde Park area but it's not for the faint of heart.  If you're interested in that area let me know and bring your hard hat!

Eric,

I'm currently looking for the exact same thing.  I know of a few properties but the numbers just don't work for me.  If you want I can send you a list of properties that I know are up for sale in the area.  But I believe John O. is correct.  I've watched the market dry up for buy and hold multi-family units.  I haven't seen a cap rate better then 2% in the area for a long time and you can forget about the 2% rule.

Ken thanks for your reply and congratulations on your deal. I've seen a few properties like the one you mentioned come up for sale in Lawrence but they are far and few between. An the majority of the ones I've seen in that price point need about 20K worth of renovations to hit the rent that you're getting. But yes absolutely there a some diamonds in the rough here.

I would love to discuss the Lawrence market with you further if your interested in this area.

Greeting's

I'm from the Kansas City area and now live in Lawrence KS and was wondering if there are any good REIA's in the area. I feel like i've picked up a lot of information from bigger pockets. I've made my first deal and bought a duplex at which i currently renting one side out and living in the other until i finish renovating it.

I really want to find some people or more information about investing in this area. i.e. is it worth investing in a condo on the plaza? How do you find good rental properties in tougher markets like Lenexa and OP. Is it even possible to find a deal in Lawrence KS?