All Forum Posts by: Tyler Garza

I agree with  @Shiloh Lundahl. Only tweak, find a lender that offers 100% LTC (loan to cost) or as close to 100% as possible. That will keep your out of pocket lower and your $70k would allow you to buy two properties. When you refinance, move into one of the properties and then rent out the other.

This may create a brief moment where you will need to live somewhere else. This is because Shiloh was right, hard money loans CANNOT be for a primary home, ever. If a lender tells you otherwise, I would really reconsider who you are working with. They would not be offering you a hard money loan (loan based on the hard asset) and instead they are lending to you as a traditional lender with private money. That would be a allowed but they should be doing more due diligence and requiring a lot more documentation than what an asset based lender would require. Know that if you want to do a cash out refinance on a primary home, it will likely need a full 12 months of seasoning (holding time) before you will be allowed to close. Your hard money fees may eat you up during that time. You may just want to do a traditional refi and take out a HELOC after a couple years as you continue to build equity.

Once you have your primary home refinanced, you should be fine. Get your personal home done first. Then do the second property with the other 1/2 of your $70k. You can always get a DSCR loan for the second property which is just an asset based long term loan (based on the rents or expected rents vs your income and personal ability to pay).

@Tyler Garza I can tell you what would probably be the most helpful thing, but most wives are not on board with it. I shared the concept with all of my friends, and not one of them did it. But this is what you do:

Get yourself on a bunch of wholesale lists and start looking at deals as they come to your email. Get familiar with price points in your market and what looks like a good deal. 

Start networking with other investors to increase your access to real estate deals.

Put your house on the market yourself on Zillow and Facebook marketplace and see if you can sell it yourself as a seller finance deal on what is called a wrap mortgage; especially if you have a low interest. Ask for a 70k payment and give them an interest rate that is 1 point higher than yours. For example, if your rate is 4% then give them a rate of 5%. They will be really happy because they can get into a house with a lower mortgage and you don't have to pay realtor fees. Because you don't use a realtor because most realtors have no idea what to wrap mortgage is. You can make the mortgage Have a balloon payment in 2 1/2 years so that you don't miss out on the IRS tax exemption rule of living in your primary home two of the last five years. Unless you're OK with paying taxes on the property eventually. Then you can just let it write out the whole length of your mortgage. You'll create cash flow every month and then at the end you'll get another bump of $40,000 or more depending on your loan amortization schedule.

With the 70k down payment buy a house from wholesaler with a hard money loan that is well below market value. Work with the hard money lender on the terms of the loan so you can get a 90% loan and the hard money lender will reimburse you for the rehab costs. 

You may need to have a family member or friend be the actual one on the hard money loan because there are stipulations with a lot of Hard Money Lender that they can't lend on a primary residence. If that is the case, then just have somebody else be on the loan with Hard Money Lender And then after you close on the property then add your name on title. You'll likely have to have your name on title for six months before you can refinance the property.

This way, your spouse can pick and choose the type of finishes that your spouse would like and then when you're done finishing the rehab in six months you can get the home refinanced and pay your family member or friend a couple thousand dollars for their willingness to be on the loan.  

When you refinance the property, you can likely get a lot of that $70,000 back If you bought the property well below market value. And possibly even more money back if you did some of the work yourselves.

So now you have a new home that you're living in that has probably 25% equity in it, you have a cash flowing seller financed property with no maintenance because you've sold it on seller financing and they're going to be taken care of the property because it is their property but yet you still benefit from cash flow because you are the bank. And you still have $70,000 to go buy a single-family home or multifamily home, and now that you're on a bunch of wholesale lists where you can source deals well under market value it is easier to find good deals. 

@Tyler Garza

The biggest "hole" in your strategy is thinking that starting in real estate will retire your wife. You've been sold by podcasts/books/vlogs that real estate can make you rich over night and it's passive. It's just not the reality.

I don't know your wife's income so it's hard to know what you need to replace in order to let her retire but if you think you'll get her retired in the next year or 2....you will have a 99% chance of being let down.

Becoming financially free, or not needing a 2 income household comes down to 2 simple factors. Income and expenses, money in and money out. Say you both make $5,000/month for a total income of $10,000/month. You also have expenses that are $10,000/month, you have $0 left to invest, donate, enjoy (not good). You can find ways to make more money, or find expenses to cut if you want to make your goal come to fruition.

If you make $5,000 more per month, you can retire your wife. If you cut expenses down by $5,000/month, you can retire your wife. Or you can meet in the middle and increase income by $2,500 and decrease spending by $2,500.

Investing in real estate will not increase your income in the short term. Think 10+ years before you really see the fruits of your labor. Anyone telling you different is probably trying to sell you something.

If you don't have your expenses as low as possible and don't have much cash on hand that's what you need to focus on. 

You are on the right track with adding a business for cash flow into your strategy. Starting a business is hard and most of them fail, so it's not you. But I am sure you have learned a lot from your first two attempts. 

The shortcut is buying a business that is already past the stage of child mortality. Lot's of boomers who are looking to retire.

The years of growing a real estate portfolio out of nothing are unfortunately over. Low inventory, higher rates and a LOT more investor competition have made it quite a bit harder. Most of the advice you get on BP is limited to the real estate sand box (duh.) - in 2025 your energy is better spent on a business than a duplex that cashflows $200 or less.

There's a 100 ways to skin a cat, are you looking to build a real estate business or buy 1 maybe 2 deals per year? 

In general - Are you looking to maximize returns (value add, higher risk) or are you looking for something rent ready (lower yield, lower risk)?

I think this will help to guide you down the right path. 

You always need to buy right and analyze the deal conservatively, account for all the fees and costs, capex, opex (PM, vacancy, reserves), and debt. 

For value add you need to buy deep, have reputable contractors, and understand different financing products + creative finance.  

For rent ready you can find deals at a lighter discount to market value, and understand different financing products + creative finance. 

@Mark Cruse is right. And real estate does not pay you well if you need the money. It's like the house knows you need the money and something breaks.

I happened to have hit financial independence/work optional, but it took 19 years, a couple of live in flips (currently on my 3rd with a wife and 2 kids), paying off my primary home, moving to a lower cost of living area (Houston to Maine), and the sale of a business to push me over the top. The best way for you to retire your wife is to increase your W2 income and to cut your expenses as much as you reasonably can. 

Why form a corporation, what is the benefit of this step?

If you have $100,000 of equity, you may be able to get a quad somewhere in the country assuming you put down $100,000.

If you lived in the house for 2 out of the last 5 years, you may be able to exclude up to $500,000 of the gain from sale.

Hey there, I love seeing this kind of drive.. you’ve already taken the first step by carving out equity in your existing home, so kudos for that. Moving into a new place while converting the old one into a rental can absolutely jump-start your investing journey. From my experience, one key factor here is to run a thorough cash-flow analysis.. it’s not just about the mortgage payment, but also about unexpected exepnses like repairs and long-term capital improvements.

If you do decide to roll that equity into a multi-family, you’ll want to be clear on your target returns.. that way you can quickly spot a deal that’s actually profitable. As an investor-friendly agent based in New Jersey, I’ve seen folks leverage a strong network (like probate attorneys, local wholesalers, or even specialized divorce attorneys) to find properties that don’t always pop up in public listings. All channels can work.. it’s just that some work more often than others.

I’ve got a friend who tried a similar stroy a few years back.. she moved out of her condo and rented it to a family member, using the steady cash flow to secure financing on a duplex that had a ton of upside potential. Sometimes it’s the small steps that lead to the biggest leaps. By the way, from what i read in the street journal, the rental market in many regions is holding strong despite economic shifts, so that could play in your favor as you move forward.

What’s your gut feeling on the timeline for scaling up.. are you looking to ramp up quickly, or do you prefer a more measured approach?

@Tyler Garza, The most powerful (and simplest) strategy for you would be to

1. Sell the house you are in now and take that money tax free (if you've lived in it for 2 out of the last 5 years.

2. Take that money (it's all tax free) and use some to buy a small multi-family using conventional or FHA financing. Live in one side for a year to meet your residence requirement for the loan.

3. The use the rest of the money from the sale, plus the interest that you've earned off of that money plus the money you saved in rent by having the tenant in the other side make the mortgage payments.  And buy your next primary residence.  While you rent the other side of the duplex out.

Voila - No tax paid.  You have your first multi-family property.  And it was purchased with primary residence financing - so advantageous.  And you have a new primary residence.

If the idea of a year wait to get into your next primary is too long then sell your house now and buy two properties - one duplex and one primary.  Or heaven forbid I'm channeling someone here - buy the duplex and rent your own house for a while.

Unless your current house is a killer rental scenario you'll almost always do better selling it and taking the money tax free.