All Forum Posts by: Shawn Slaven

Quote from @Conner Olsen:

Quote from @Shawn Slaven:

Quote from @Conner Olsen:

Quote from @Shawn Slaven:

Hey everyone, I’m having difficulties understanding the lending side. I’m trying to house hack and would love to purchase 1 a year to grow.   I found a property and closed on it. I plan to fixed it up while staying there and then rent it out and get another.  

My issues come with lending.  As someone starting out. The bank wants 2 years of tax return showing rental income.    This is going to set me back 3 years waiting for a piece of paper.     Is there another way?

 Currently the only solution I can find is fixing and renting this out while locking myself into an apartment (which I hate the idea of).   

I’m just trying to figure out my next step. How can I purchase another property on loan without multiple years of experience for the banks?

What kind of property did you buy, how are you going to rent it out?

 This one is a condo. I plan to self manage it, especially now that I know a track record is needed.

 Are you going to live in it and rent out the rooms?

I live in it, then rent it out when I get another.  

Quote from @Doug Smith:

A bank or using a conventional or non-QM-type loan is usually going to require 2 years of tax returns, but if you have enough down (20% - 25%) and you're willing to do the deal in the name of an entity, then you can do a DSCR or even a flip/bridge loan. Some lenders won't work with you if you haven't had any experience, but some will dip their toes in the water with you provided you have decent credit and enough down. Don't waste your time with the bank or a Fannie/Freddie loan at this point...go with a lender that is adept at working with investors. I hope that helps you.

I’m trying to capitalize on va loan usage. Primarily because of the major benefits.  For example this unit.   Only 100k 2b/1ba  370hoa.  Trying to find lenders the best they could give me was a mortgage of $1268/m. While I went with navy fed and managed a better rate at $1040/m   My credit was a 776.  These units typically rent between 1200-1400 which is why I wanted the better rate.  My DTI with this included is only 28% 

Quote from @Conner Olsen:

Quote from @Shawn Slaven:

Hey everyone, I’m having difficulties understanding the lending side. I’m trying to house hack and would love to purchase 1 a year to grow.   I found a property and closed on it. I plan to fixed it up while staying there and then rent it out and get another.  

My issues come with lending.  As someone starting out. The bank wants 2 years of tax return showing rental income.    This is going to set me back 3 years waiting for a piece of paper.     Is there another way?

 Currently the only solution I can find is fixing and renting this out while locking myself into an apartment (which I hate the idea of).   

I’m just trying to figure out my next step. How can I purchase another property on loan without multiple years of experience for the banks?

What kind of property did you buy, how are you going to rent it out?

 This one is a condo. I plan to self manage it, especially now that I know a track record is needed.

Quote from @Tyler Fontaine:

How did you get into the first property and with what kind of funding?

I used a VA loan. With navy federal funding it. But I've called multiple lenders to ask and they all tell me 2 years of rental history for the income of the unit to count. So basically I can buy another place, just the loan amount is cut by about half meaning I can't get a large enough loan to purchase another place in my local area

Hey everyone, I’m having difficulties understanding the lending side. I’m trying to house hack and would love to purchase 1 a year to grow.   I found a property and closed on it. I plan to fixed it up while staying there and then rent it out and get another.  

My issues come with lending.  As someone starting out. The bank wants 2 years of tax return showing rental income.    This is going to set me back 3 years waiting for a piece of paper.     Is there another way?

 Currently the only solution I can find is fixing and renting this out while locking myself into an apartment (which I hate the idea of).   

I’m just trying to figure out my next step. How can I purchase another property on loan without multiple years of experience for the banks?

Quote from @Drew Sygit:

@Shawn Slaven there's a HUGE difference between looking on the internet and MLS for properties and NETWORKING to find unlisted properties.

So, how are you looking and how much time are you putting into your search?

I’m still new to the game. Mostly just Zillow and MLS listings is what I’ve been able to access.  I grew up in the handyman trade so i can do the work, just don’t know the financial side.  I see people buying 81 units in a year while I don’t understand how they’re getting qualified for loans on units without certain issues coming up. Like for instance running the credit  is like 6 points. Wouldn’t that just destroy someone’s credit?   

Quote from @Dawn Brenengen:

I'd hold onto the cash if it were me. Owner occupied financing is some of the cheapest money out there!

Thank you. I was just afraid of over leveraging 

In this market. Where I’m located rents are painfully high now.    I bought my house for 218k then sold it for 270k it sold again for 350k and just sold for 450k.   Apartments that’s used to rent for $1000 a month are now $1800-2300.  What I’m worried about is nobody understands the market fully.  I personally don’t believe we’re going to have a crash but I do believe we should have a correction before the level off.  Im worried about making calculations based on rent rates in this market and having a correction that would put me negative.  If my expenses for a unit cost me 1650 now but the rent drops from 1800-1600 then I’m losing money and end up discouraged to try again.   How can I protect my investments while putting as little down as possible without over leveraging it? 

Quote from @Drew Sygit:

Real estate investing is all about leverage and having tenants pay for that leverage.

So, putting more down is typically unadvisable.

Why aren't you looking at 2-4 unit properties? They will allow you to grow faster.

I would love a 2-4 unit property. However I’m located in central California right now and haven’t been able to find anything near a price range I could get approved for. Nor have I fully felt the confidence to find a good deal. With everything so over priced all I've found are negative cash flow properties.  Thankfully I’m able to secure this unit. It’s not big, but it’s only 5k down on a positive cash flow unit 

hey everyone, to start off my I'm 33 and my name is shawn. i purchased my first home back in 2018 with the intention of living in/fixing it up over the next couple of years while i saved to make more investments.  i had a few mental struggles back during covid time frame and ended up selling my house faster than i wish i did.  first mistake, however it still profited. the house was purchased for 218k and sold for 270k. i bought a sailboat on the east coast, taught myself to sail. then took off to the Bahamas till covid ended. although the life was nice, i wasn't growing and that bothered me. i recently moved back to California and have been on the grind looking for deals. i found a couple units that are cheaper on the list than most, i ran my numbers.  on average 125-135k  2b/2ba condos. currently renting for 1250-1400/m     sounds great until you consider hoa fees of 375/m.  i called my grandparents as they have a unit there and was just inquiring on the status and costs of the area.  he told me its been great they haven't had any issues with the area and never needed to evict anyone in the 30-40 years they've owned it.    after doing the math i personally valued these units no more than 105k purchase at the high end but getting in was going to be hard. my boat is under contract an i should walk away with 40k. so i wanted to get in touch and make a verbal offer of 105k to each unit and hope one bites. i was mentioning around Christmas time that my boat was selling and what i was planning to do. a few days later my grandfather called me and asked if i wanted to buy the unit for 100k. i said yes that sounds good. after looking at the unit i called to get a loan from my bank.    5% down, 95k loan.  after principle, interest, insurance, and hoa fees. i believe im looking at 1200/m  .. which to me sounds ridiculous as my loan on the 218k house was 1200/m. add another $100 for repair costs(hoa covers outside i only do inside) then i break even at $1300. so renting for $1300-$1350 to stay competitive.  only thing is a occupancy clause for a year. in which im willing to do.  i feel like if i don't get in then I'm just waiting wasting time. but with 5% down allows me to keep that 40K in the bank for the next place.

My questions are...

being that its only a 100k unit. should i go ahead and put the 20% don't a make an investment loan instead?

should i keep the 40k to use on another unit or use on this one while having a primary occupancy on another?

if i remember right every $1k down is only like $16 a month off. so i feel like keeping the cash in the bank would be the smarter choice. however i dont want to over leverage and be stuck with a hefty payment if rent decides to drop in the area. 

im just trying to find my best routes from people who can teach me a bit.  my goal is to at min purchase 1 property a year. but id like to utilize this money to get a jump start into hopefully 3 homes this year    

my long term goals are 15 units within 10 years, 30 by 20 years.  i know its doable, i just need the guidance from others. i don't care about the money really, but treating this like a game. its been my dream since the 7th grade to open up my own property management company filled with my own units. being from califronia i never thought it was possible. i make $3700 a month with $0 debt. so this 100k will be my new start.   i dont really spend money and have a 776 credit score.  i feel like ive put myself into a credible position to make this happen but just looking for the right flocks to follow.