All Forum Posts by: Tandi H.

@Jay Hinrichs Yes, while I was on the phone with my lender to lock the rate this morning, the rates dropped.  Glad I didn't call 10 minutes earlier!  Though who knows, maybe I would have been even more happy if I'd waited till later today lol...

@Jon A.  Oh I see.  My lender is allowing 25%. Do you use someone local or a national?  All my mortgages are with AimLoan.com.  

@Jon A.  Great!  

One question, why leave 30% in instead of 25% might I ask? 25% avoids MIP - and is enough to cushion minor property value fluctuations. We left 40% in our refi last refi because I was feeling cautious. Going forward I won't do that again. I'd rather have the cash to deploy.

@Kyle McCorkel Thanks, I understand that 10% maintenance might be common for some properties, however we've found that to be high in our situation - my husband is a licensed contractor so he can do all the work at very low cost, which helps a lot.   I did put in 5% for vacancy (-$900).  I've gone back and forth on property management - my job is managing our properties at this point, including our AirBnb.  Once we have built up our portfolio to a certain point, we would like to shift things over to a PM.  Probably 5-10 years down the road.  At that point the higher rents and values, improvements and possible refis will completely change the financials of each property.  That's why I don't have PM in our calculations now.  Just my own way of looking at things.

@Ryan Woods @Sam Shueh @Ronald Starusnak  Thanks for the thumbs up!

I locked in our rate this morning - 5%!  That is with an extra ~$500 in points to bring it down from 5.125%, with payback in 5 years.  Rates have really dropped from the 5.5% just weeks ago.

@Jason D.  OK good to hear!

If anyone wants to comment on this property, I think it's a solid one.  B neighborhood, 2 bedroom/1 bath's, B condition building.  Here are the details:

Duplex, $155k

25% down, $38,570

5.125% interest, 30 years

P&I = $632.97

Closing costs about $3000, not sure yet exactly

Each side rents $750/mo

Calculations:

$18,000 Gross Income

-$900 Vacancy 5%

$17,100 GOI

-$4,450 Operating Expenses

• M&R 1000/year
• Insurance $550/year
• Taxes $2000/year
• Water $900/year

$12,650 NOI

-$7,596 Debt Service

$5,054 Annual Cash Flow

$210/door/month

8.16% Cap Rate

12.11% COC

1.67 Debt Coverage Ratio

@Russell Brazil  Interesting, I didn't realize that!  Thanks for sharing your knowledge.

Thanks @Russell Brazil.  I've had good luck with this lender so far.  Is there any news on the potential rate hike next week?

@Jason D. - This is for a non-owner occupied property...

Thanks @Dennis M. and @Mark Bookhagen for your input.  

What do you think of this rate?  I'm wanted to jump on locking in a lender in case rates go up at the Fed meeting next week....

Property info:  Duplex, $155k, 25% down

Rate quote:  30 yr fixed, 5.125% (no points), $1339 lender fee

Anyone seeing anything better? 

We had a similar situation, less money, however it allowed us to start investing. We are finding that adding one small multifamily at a time is great. Maybe a new property every 6-9 months. That gives time to get used to a new property, iron out any issues, get it settled and tenanted, and move on to the next one. 2-4 units are great for fixed 30 year loans. If you can house hack you can put even less down and then leverage your money even more. We like 25% down because that avoids MIP and is more conservative than a lower down in case of large market fluctuations. But if you're buy and hold that is less important to worry about.

If you do that for a few years, maybe even at a quicker pace depending on your lifestyle, you should be able to spread that inheritance into a large portfolio.  Maybe even refi'ing on some if you add value or there's large appreciation.  By doing it over several years you may also be able to take advantage of an upcoming market dip, if there is one.