All Forum Posts by: Wendy S.

@David Wright

Thank you for your kind words and insight.

@ Chris Mason. Thanks for your template on how to provide information in order to achieve constructive feedback.. So here's my story......

I presently house hack a 4/3 sfh with 2 rooms rented. This covers PITI, home owners insurance, all utilities, internet, etc. $100 give or take left over. Plan to reside here another 6 months or so then seek another primary having lived here 2 years.

I've come across an owner occupied fixer upper asking $120,000 in Georgia (South). Hoping to offer around $110-112K. Property can be rented as is for at least $1,150. However, this is not my primary focus as I am more interested in incorporating it into my Healthcare residential business but for now it would be a start.

So I am thinking get a rental property loan with 20% down. Credit score mid 700, above 740.

Current DTI is around 43%, credit cards utilized paid off in full monthly and I carry a LOC which I was planning to pay out but have access to when this deal popped onto my radar.

Here is where things get tricky.. I took a 6 months hiatus from working then decided to do part time work 9 months ago, while I research and tested starting my own business in the health care field. So part time W2. I am told this is an issue with 2 years continuous work history required.

So, I am exploring an option that allows the projected income to be used instead of my income. I understand rates for these rental property loans may be around 6 to 7%, which would still be affordable.

Am I being unrealistic or are there are other avenues I could explore?

Grateful for any advice or feedback..

@ Chris Mason, was having issues with responding under your suggested headlines. So hopefully my narrative captured the important points.

Originally posted by @Brian Adzadi:

@Cameron McCown

Hi Brian I believe Cameron is talking about FHA vs Conventional for a newbie like myself or someone looking to acquire a primary residence for a house hack. I used a conventional 3% down with PMI which I already now have the option of removing.

This choice was after I weighed the costs of a FHA, plus I didn't yet have the 2 yr working history but was able to find an amazing realtor and mortgage broker who made it possible.

I was able to purchase my 1st and only property Dec 2017, which I've been house hacking with my daughter while my 2 rented rooms covers PITI, all utilities, home owners insurance, internet, Adt full package monitoring, Netflix, etc, plus leaves me about $100 monthly.

So living free with of course Capex, Opex, vacancy and management as my responsibility when they arise. ($621 or 49.68% factored for this.. Cap-$150, Op-$150, Mgmt $140 & Vac-$140, Miscell-$41).

This decision has now put me on the path to keep this property as a full rental later this year while I obtain another low down payment primary residence conventional loan. Not to mention if I decided to sell yr end or the next 3 years with no capital gains tax, cha-ching. 

So, I have always wondered why the FHA 3. 5% with permanent PMI is usually touted as an introduction vs conventional with less than 3.5% downpayment and temporary PMI.

P. S. 

I'm still very new and continuously learning. Sorry for rambling on, but decided to add my journey so it might motivate a newbie reading, that it's possible 🙆. 

@Tiffany Roberts

Hi, a slight correction with Cozy. They can submit an application or profile without paying the $39.99. This fee is for their background and credit check.

Now, personally I request the checks after persons have seen the property and I believe based on our preliminary discussion they would be a good fit. A very transparent process, as if during that time there is a possible red flag and they still go ahead knowingly that's on them.

Now while I don't charge an application fee for my time to do the above, others with more properties might attribute a cost for their time, which I also believe is fine.

So you are really paying for the background and credit check, which does not give the landlord any guarantee you will be a good renter just an indication that based on past records you might be.

Hence in the grand scheme of things, is this $39.99, one time fee really such a big deal. If it is, then you should perhaps not be looking to rent. As the renter, I believe you should factor this in your research cost or consider it return you get on being able to get a great property to rent.

On the other hand, for you the landlord, it helps to weed out some of the persons you would have wasted your precious time with.

Just my $0.05.

Happy investing and best of luck on your journey!

@Nathan G. Lol. That's a good one

@Kristen Ray, @Steve B. 

Luckily, I have not had any issues with either Cozy or Zelle so this may be unfamiliar territory. 

However, customer service with Cozy has been awesome and concerns are normally addressed within a few hours of asking. With that said, we can only put as much systems in place to mitigate against risks but nothing is 100% full proof. 

I did reach out to Cozy and their response was more along the lines that once the tenant initiated they would have to return the funds to tenants bank but advised that our individual lease agreement should speak to this as chances are the landlord would have to pursue legal channels to recover money justly owed. 

So it's treated similarly as a purchase but buyer now want funds returned for whatever reason. Of course if they made the payment they could have the payment reverted by their issuing bank or the affiliated third party (think Amazon). 

Hope this helps. 

@Kristen Ray, I have used Cozy and have tenant set up auto pay. However, it requires payment process to start several days earlier as it can take 5 to 7 business days which is compounded if there are any holidays and and of course weekends. Another option I use is Zelle, similar to Cashapp but used with bank to bank. You only need to provide your name, email/or telephone number, so at no time are you providing your bank account information. Happy hunting.

@Melvin Noriega. I am also relatively new (but older) though I have purchased 1 property last year and looking to purchase another or two 2019. My question though is I notice you and others tend to suggest FHA loan for starting out, as opposed to a conventional 3% down loan with PMI that can be removed at a later date. Is this specific to duplex/triplex/fourplex? I am asking as I purchased a SFH with a conventional 30 yr mtge with 3% down and have chosen to house hack by renting per room. I believe there are programs and grants available for first time home buyers as well. Will anyone please shed some more light. Thanks.

Thanks Jaysen, the property almost across from my house is a 4/2.5 that added 3 additional rooms which they also used to rent by the room. No1 had a problem and it sold 2 months ago for $130,000. 

My problem is qualifying for any kind of mortgage or refinancing because of my employment status. Had a 6 month break in employment by choice and just getting in business for myself, so my part-time income and rental income are insufficient at this time. 

So rather than have that money sit idle I am looking at options with what I already have. 

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