All Forum Posts by: Thomas Geary

Tonghong,

If you can find a good agent/investor, they will know the good investment lenders. Your realtor will likely have someone they have worked with that they know can close on time and are easy to work with. I prefer when I can send a new client to one of my favorite lenders that I have done business with in the past.

As far as rates, I got a 4% on my most recent investment property.

Hey Kristopher,

You can avoid paying capital gains tax if you have lived in a house for 2 of the LAST 5 years of ownership. So if you plan to sell the condo in 5 years then it may make sense to stay for those 2 years. If you plan on holding onto it longer than that then it doesn't really matter.

The VA requires you INTEND to occupy the residence within 60 days after closing for at least a year, but sometimes life happens. As far as lenders, they will all have a bit different requirements as far as what they will need to negate the cost of your current residence wether it is a lease, tax return showing rental income, or even just analyzing market rent.

Hope this helps! Feel free to send me a PM if you want to talk investing strategies with VA loans because there are a lot of nuances.

Hi Toi,

The easy answer is to say buy wherever the numbers make sense! Personally, I prefer buying in or near a city because I feel confident that there will always be demand. Does't necessarily mean it has to be a metro though.

Which market are you looking to invest in?

Hey Eliza,

When I get a new client, I usually prefer sending them to a lender that I have worked with in the past that I know can close a deal on time and is easy to work with. So if you don't have a pre-approval yet, that is okay. Just expect to have it before your realtor helps you with showings and such. And as far as the amount you can get pre-approved for, lenders will typically lend up to 43-50% back end DTI. So figure about a $4000 monthly payment assuming you have no other debt.

Which market are you looking to invest in?

Hi Elizabeth,

Sounds like you guys have a pretty decent property! I run my numbers very quick and dirty. It looks something like this:

Gross rent x 75% - expenses = cash flow 

cash flow x 12 / total cash to close = cash on cash return

Most banks I know of use the 75% when calculating rental income as well. Figure 10% management, 5% cap ex, 5% maintenance, 5% vacancy.

Hey Zach,

You said you are okay with some risk, right? Well a strategy I have been using with some success is to give a non-refundable DD check straight to the seller for an amount you deem acceptable (aside from the EMD check held at the title company). This may get your offer accepted with a bit longer DD period. In my opinion, it wouldn't be worth a seller's time to walk away from a transaction to pocket your $500-1000 over something silly. Just make sure that it is an amount that you are okay with letting go. May be better to lose $1000 than inherit a costly structural or sewer issue or something.

Hi Shane,

This would obviously depend on your goals. Are you looking to scale your portfolio as fast as you can creating the most cash flow to quit your job? Or are you trying to grow your net worth over time while still working?

For me personally, I am okay with little to no cash flow (after reserves of course) in a higher appreciating market just to capture that equity. And it's more than likely that the rents will increase in a year or two creating some cash flow. I like using low down payment options to get into these type of deals. While on the other hand, my cash flow properties in the South I shoot for $200 per door and 10% CoC return and I am okay with putting 20-25% down on these.

Also something important to consider is your Cash on Cash Return, this tells you how long it will take to recoup your investment!