All Forum Posts by: Ash Hegde

I think Caleb nailed it, you'll be able to learn about real estate and make the money you will need for investing. 

Quote from @Matthew Sarro:

Honestly since I'm still extremely new, I am trying to figure that out. I am in the process of networking locally to start figuring out who can/should be part of my team.

Originally I had had an interest in being a limited partner in syndications, but with my goal of enough cash flow to replace my day job (and eventually my wife's), I don't think that that is going to get me where I want to go.

So I am now considering SFH, small (<4 unit) multitenant. But I am also considering a turnkey property so I can start getting some cash flow and "just get the ball rolling."

For these types of properties, personal financial statements shouldn't be an issue. If you are doing a conventional loan your income would be verified by tax returns, pay stubs, and W-2 forms. Cash for down payment and reserves would be verified with bank statements. 

Quote from @Sandra Lopez:

Thank you for your help.

If  cash out refinance the property, how do I paid back the 165k I borrowed (Heloc)?

80%= 200K

20%= 50k cash back to me.

How do I paid back the $165k.

Thank you in advance for your help.

In this case, your new mortgage would be 200k and the check to you would be 200k (less closing costs). You could use that to pay off the 165k HELOC and keep the rest. The 20% (50k) would be your remaining equity in the property. There is no income tax on a refinance.

Cash flow and taxable income are separate calculations. The main difference is that you can't deduct the principal portion of your mortgage payment (even though it affects cash) but you can deduct depreciation (even though it doesn't affect cash). 

Usually the depreciation is enough to shelter your income so that you pay little to no tax, at least on a new long term rental. 

A fix and flip loan will generally lend up to 70% of the after repair value. If that is enough to pay off your investor and remaining repairs, it may work for this.

You can borrow less than the 70% if you don't need it, but they would have to be the only lien on the property so you'd have to borrow enough to pay the investor as well.  

Welcome Tyree! 

A DSCR loan will be based on the rents of the property vs the mortgage and does not take into account your personal income and debts.

A vacation home loan will require that your personal income is enough to support the home and other mortgages or debt you have. Rates and fees are generally better with the second home loan (though the rate is higher than a primary residence loan) and will not have a prepayment penalty that most DSCR loans have. If your personal income can support it, this is a better loan.

If it's unable to be rented, a bridge type loan that Erik mentioned may be best bet. DSCR would require rental income to qualify.

There would be closing costs involved, so as @Ray Hage mentioned, a price reduction may suit you better.

Agree with @JD Martin, off market investor groups are likely going to offer you less than retail even if you pay a commission, if they even have the money to begin with. 

You are correct, if you get into a house hack with a low down payment (3.5-5%) it is unlikely that you'll be able to refi the following year and pull out cash for another property. The hope is that while you live in the house hack, rent from the other units (or rooms) is saving you money every month and you can use that savings for the next one. There is a point where  you'll be able to cash out refi from the property, but without extreme appreciation it probably won't be in year 1. 

Recycling money from properties to use for the next one is generally a strategy for BRRRR more than for house hacking.