All Forum Posts by: Sean Gammons

How do you buy two rentals in one year? I was going to buy a owner occupied duplex with 3.5% down then buy an investment property using 25% down but my DTI ratio would not qualify for both mortgages in the same year unless I used a dscr loan but then the interest rate would be very high, and it'd be hard to make a deal work using a dscr loan because of that. So, I am just curious how other investors have managed to buy 2 rental properties in the same year in the building phase of their portfolio.

Thanks!

Quote from @Alecia Loveless:

@Sean Gammons I love house hacking and would absolutely do this every 12-15 months if my partner wasn’t totally against moving frequently.

I do think this is a great way to get started with a fairly small amount of capital assuming you make enough to obtain the loans. Also I would want to find properties that would have positive cash flow upon moving out each year which might take some time and a decent amount of analysis.

One note is that if the property was helping cover my costs of living while I house hacked it I wouldn’t worry about negative cash flow while I resided there.

Yes, I am going to be buying my 4th house hack next year and I really love the strategy. I think taking advantage of low downpayments and using very high leverage is incredibly powerful it makes your return so much bigger. I buy in the Midwest so it is fairly easy to find a property that cash flows after I move out which is great for this strategy. I don't think it would work as well in a HCOL area.

Quote from @Aristotle Kumpis:

How are you putting 3%-5% down? You must be talking about doing an FHA loan every so often.

You don't need to use just FHA you can this with conventional owner occupancy loans as well.

Is buying a new owner occupied 2-4 unit multifamily property every year using 3-5% down payments a good strategy to scale?

Quote from @Nicholas L.:

@Peter Jin

I don't worry about CoC, I worry about leaving as little in the deal as possible. I'd do a 0.5% CoC if I could have $0 in the deal or bring $0 to closing.

 @Nicholas L.

Hey Nicholas can you explain more about what you mean?  Are you saying if you only had 5k in a deal but your mortgage is 900 a month and your rents are only 1k you would do it if you had 5k or less in the deal? I am just interested in what you ment by your comment I know it was a old post.

thanks! 

1st time landlord investing in Class C or possibly Class D neighborhoods renting to section 8 tenants' out of state is extremely tough to do. 

You really need to research the city you need to know every neighborhood understand the city good school districts and bad school districts top employers etc. Then you need to find a amazing real estate agent and property manager. Are you going to fly out to view the property you buy or trust your agent and inspector have them video record a tour? It can be tough you can see houses in Detroit that look like they have been remodeled within the last 3 years but they are trashed and up for sale most likely a section 8 landlord getting a bad  tenant and wants out. I am not trying to scare you, but it is not as easy buying a 80k single family in Detroit and it's going to be a money maker on section 8. You will need to do a lot of research and have an amazing team.

I know Cash on Cash return is not the only important metric you should be looking at but for the sake of a simple answer what are you getting?

Are you able to find an 8%-12% CoC on C+ to B properties on the MLS? Where I live just running numbers on the MLS there isn't a lot of inventory of multifamily for sale on the MLS it seems like landlords trying to sell their properties in my area have them overpriced.

I'm from Kansas curious what you guys are getting or if you have to look elsewhere besides the MLS.

@Ike Hobbs Wow really? Did you add 10% for property management just in case in the future you don't want to manage it yourself. What side of town did you buy on and how many units was the property you purchased and what was the price? Thanks

I am looking to buy a house hack in Wichita Kansas, but the inventory is so LOW, and nothing seems to make sense. I am looking for a 8-10% return after I move out and rent out both units. This seems impossible to get unless I buy in the Plainview Area, South City and S Broadway St. Which these areas are considered bad.

Anyways what is working for investors here are you having the same trouble? Also, what returns are you shooting for in the city here thanks!

Quote from @Gregory Schwartz:

Keep in mind that if you buy a rental property in your name using a conventional mortgage it will directly affect your debt to income (DTI)

My lender said that if I show rental income it will cancel out my DTI and will even help me qualify.

Also, I have heard from David Green that there is DSCR loan that I could easily qualify for if the property shows that it cash flows but they are obviously higher rates.