All Forum Posts by: Greg Szymbor

For the conventional loans I currently buy multi-families with I generally get anywhere from 4-5% interest rate depending on where the index is. My FHA loan is right around 3%.

As fair as getting those loans...my FHA loan was based off of my income/credit. The conventional or "investment" loans where you buy a property for the sole purpose of renting it out is based off of income/expenses of that property.

I low ball every offer for EVERY reason. I don't care if the place is perfect, I will find something that I don't like about it or that will make it "tough" to rent. I'll never tell the other agent that I like a place, just always down talking the property and nit picking everything. Then I send a low ball offer (nothing too outrageous) but hey, the worse they can say is no. Also pull out a spread sheet and run some numbers. Then explain to the agent this is where you want to be for a purchase price.

Hope this helps Amber!

Find a broker that will "represent" you. I would recommend interviewing multiple real estate companies to see who has the best training...not the best splits. The money will come in time, it is important that new agents get the best training possible early on to promise a solid career down the road.

This is my house hacking story that will go into a little depth of how I got into real estate, live debt free, and show some rough numbers of my property. This is my first “blog/forum” and will help me achieve my goal of sharing more experiences and information through blogging. Hope you enjoy!

Roughly two years ago I purchased my first 4-unit using a FHA first-time home buyers loan for 3.5% down and a low interest rate. The purchase price was 140,000 and I was able to finance the closing costs to make my total out of pocket investment around $5,500 after inspections, fees, and down payment. I moved into a one bedroom apartment that required some TLC and updating, the other three units were in turn-key condition. I did the work on the one bedroom myself while living there and racked up a construction bill of $3,000.

Total Out of Pocket Expenses: $8,500

The PiTi (principle, interest, taxes, insurance) plus MIP is around $1150. The average cost of expenses for this property over the last two years has been $490 a month.

Total Monthly Expenses: $1640

The three remaining units rented out for an average of $2100 a month over the last two years. (Had two one week turnover so vacancy was not factored in). This gave me an average cash flow of $460 a month. Over two years this piled up in my bank account and is now at $9,900 (includes some random vendors not included in the monthly expenses)

I recently got the building appraised at $190,000! Subtract my mortgage which is at 140,000 (only have paid off the financed closing costs it looks like) for a total equity of $50,000!

So over the last two years I have earn my initial investment of $8,500 back, earned an extra $1,400, built up equity of $50,000, and lived rent free all off one property!

For anyone that doesn't currently own property and can qualify for the FHA loan, I strongly recommend jumping into real estate this way. I have zero regrets on my first property because it has allowed me to continue investing in real estate by creating a "live free" environment.

Thanks for reading and I hope this story helps someone!

If you are looking to a get a general conventional loan for a property of 1-4 units that you will not be using as your permit residency then yes you would be looking at putting 25% down. Some bank/lenders in your local area may have different loans out there that only require 20% down. Either way this will avoid any MIP/PMI that you would have to pay and your LTV would be 75% (for 25% down).

Now if you plain on using the multi-family as your residency (live there and have the rents cover your mortgage and bills ((house hacking)) ) then you could try and get an FHA loan which requires 3.5% down and requires you to pay monthly MIP which is roughly 1% of the loan amount. This would be a LTV of 96.5%.

Hope this helps.

That money should come out of the contractor's pocket. If you hired a reputable contractor then he/she should have insurance to cover these shorts of instances. Just be polite when contacting the contractor and explain the situation.

Welcome Kathy!

I'm a local investor in the southern Maine area and would be more then happy to help you out with any questions you have or advice I can give!

Hey Jared!

I can help you out with question one...when I check out a multi-family in my area I'm using an MLS search. I can get the asking price and property tax using this site. Then I would send a few emails out with the MLS number to local insurance agents to get some insurance quotes. Then finally talk to my lender about current interest rates. Now take all that info and throw it into a PITI (principle, interest, taxes, insurance) calculator (google it) and you have you general monthly escrow payment you would be looking at.

*Include and talk to your lender PMI/MIP if you will be putting less the 20% down

Then you can ask the listing agent for an income and expense report on the property. Any serious agent/seller will provide you with a document stating the rents and the expenses for the previous year. This "document" could be anything from a detailed report from a professional property management company or a napkin from a slum lord... so VARIFY these numbers. Either through signed leases or by contacting your local utility company to check the electric bill, the oil bill, water, sewerage, etc.

This will give you your income (rents), monthly payment (piti), and monthly expenses. Then you'll have to factor in vacancy, maintenance, management, etc for your local area.

And just remember every property is different...from lawn care to plowing to flood insurance...each property will be a little special for expenses.

Hope this helped!

-Greg

I would youtube biggerpockets and watch some of the previous podcasts. They are extremely helpful and filled with great info. As far as books I would look into the Rich Dad Poor Dad series by Robert Kiyosaki. Ken McElroy also has some great books on RE out!

Hope this helps and welcome to BP!

The best bet to double your investment would probably be a flip, but you may also be able to buy/fix/rent and pull out the equity of the new value plus cash flow each month. There are also similar methods using lease to own programs.

Knowledge is key, educate yourself before jumping in.