All Forum Posts by: Zachary Ware

I have to second that this market requires a great understanding of the neighbors and even streets. I recently thought I found a great duplex but when a local agent toured the property for me, they didn't even feel safe which lead us to believe finding the right tenants would be a challenge. 

Hi Heather, 

Your lending options can vary greatly depending on what type of property you are looking at. 1-4 units, 5-10, and beyond will have different types of lenders and more importantly different loan options. 1-4 you will have the options of FHA/local banks/conventional. Once you move into 5 units you are financing a commercial property and would be looking at local banks/credit unions. For smaller multi 5-10 many find DSCR loan to be the best in terms of ease of qualification while still keeping terms closer to what you see on a conventional loan (30 year term). When you look at credit unions for these properties you are likely to see a 20 year amortization with a balloon payment at year 5 or 7.

There are 30-year fixed rate options in the DSCR space for up to 10 units. Check out this article on BP https://www.biggerpockets.com/blog/multifamily-dscr-loans that goes into more detail.

Hey Agustin,

I do not have any properties in LA but would like to hear what areas you are investing in there. I sent you a PM.

Best of luck,

Hi Glenn,

I think there would be two basic approaches here but they may not get you into multifamily immediately. Real estate is a long-term game after all. You are going to need to pull equity out to start building a portfolio. Since you are going to be living in one, househack the one with the least amount of equity. Fill the other rooms with roommates and use their rent to help pay the mortgage. For the other property, preferably the one with the most equity:

1) Cash out refinance. You can put tenants in the property and get a DSCR loan pulling out equity. I think your biggest hurdle would be speed as these typically have seasoning requirements. How long you own the property and if your parent will stay on title. With a cash-out, you can keep building wealth and go after another property to add to the portfolio.

2) Sell. This will be the way to pull out the most equity but you lose the property and need to have somewhere to put the money into.

Hope this gives a good starting point! 

Great deal and congratulations! 

Hi Derek,

Do you have any parameters in mind? I think it is helpful to narrow your buy box down as much as you can. It is impossible for someone to look at deals everywhere in the US and at any price point and be successful in the long term. I would first try and find what price range you are looking at, what city/cities you are looking at, property condition, and return. 

Hi Jacob,

I agree with @Michael Dumler on this one. At this point in your investing journey, focus on saving up as much money as you can and learning even more. Though you may not be actively buying deals you can spend your time wisely learning the game inside and out. Once you have built up some capital and educated yourself, there are many ways to make money. This would be more so through "services". If you can find a good deal, you can make money whether you are the one buying the property or you are bringing it to someone else. 

I agree with others that adding amenities, specifically targeted toward those most wanted during the colder season can have a big impact on down-season occupancy. I have also seen others change strategy during the slow season and get a medium-term tenant in place. The income won't look like the summer months but can be higher than what you can get using as STR.

Great deal! And awesome that you got it through a cold email.