Unusual Situation, Looking for Advice!
Hello!
My name is Lindsay Schubert. I am a full-time Air Traffic Controller is San Juan, Puerto Rico. I want to start my rental portfolio in Florida. The hope is to be in this area eventually.
I am looking to start with a multifamily property that is a triplex or fourplex. I have a long way to go with setting up a team and finding the right areas. I have been constantly reading and researching the steps to take. I am just getting stuck on the financial method. The prefered methods to do are FHA or 203K Loan, but unfortunately I would not be able to live on the property. I do not want to put 20% down on a conventional loan if it is going to drain my bank account and if there are better options out there. There is Private Money Lenders, Owners Financing and Partnerships, but I don't know where to start. I don't have networking events in Puerto Rico, so I came to the forums for advice.
Thank you in advance!
Using a conventional loan and putting 20% down is probably the best way to go. The other types of loans come with higher interest rates so will hurt your cashflow.
If you are worried the down payment will reduce your cash on hand too much, change your strategy and find something that is less expensive. Either go to cheaper cities or consider starting in single family. Single family properties are cheaper and much easier to manage than plexes.
I am not 100%, but I am fairly certain an FHA is out of the question if you don't use it as a primary home.
Quote from @John Hernandez:
I am not 100%, but I am fairly certain an FHA is out of the question if you don't use it as a primary home.
Yes, that is true. Thank you for replying!
Quote from @Greg Scott:
Using a conventional loan and putting 20% down is probably the best way to go. The other types of loans come with higher interest rates so will hurt your cashflow.
If you are worried the down payment will reduce your cash on hand too much, change your strategy and find something that is less expensive. Either go to cheaper cities or consider starting in single family. Single family properties are cheaper and much easier to manage than plexes.
Thank you for your advice! I appreciate it!
I have been looking at different cities, and states. The only reason I am trying to make this work is that I might be transferring to Miami, so if I had to live on the property, it would be beneficial.
Agree with Greg that if you are not moving in, the 20% conventional is the best option for overall cost. If you do end up moving to Miami and can be an occupant for the first year you will have more low down payment options.
Quote from @Ash Hegde:Thank you for the insight!
Agree with Greg that if you are not moving in, the 20% conventional is the best option for overall cost. If you do end up moving to Miami and can be an occupant for the first year you will have more low down payment options.
Quote from @Lindsay Schubert:
You have to learn the options and then crunch the numbers to see what works for you. A hard money loan may work, but you'll be paying a much higher interest rate.
You also have to admit this basic truth: sometimes we want a Ferrari but can only afford a Kia. It's unreasonable to think you can build wealth just by wanting it really bad. You need to take action. This often involves working hard to increase earnings, getting on a budget, sacrificing, spending your nights studying the market instead of binge-watching Dahmer, etc.
Quote from @Lindsay Schubert:
Hello!
My name is Lindsay Schubert. I am a full-time Air Traffic Controller is San Juan, Puerto Rico. I want to start my rental portfolio in Florida. The hope is to be in this area eventually.
I am looking to start with a multifamily property that is a triplex or fourplex. I have a long way to go with setting up a team and finding the right areas. I have been constantly reading and researching the steps to take. I am just getting stuck on the financial method. The prefered methods to do are FHA or 203K Loan, but unfortunately I would not be able to live on the property. I do not want to put 20% down on a conventional loan if it is going to drain my bank account and if there are better options out there. There is Private Money Lenders, Owners Financing and Partnerships, but I don't know where to start. I don't have networking events in Puerto Rico, so I came to the forums for advice.
Thank you in advance!
Hey Lindsay, I am a realtor and investor in Fort Lauderdale but I know the Miami market quite well too (I lived in Edgewater for a few years). I could help you get you started and hopefully the right property for you. Do you have a timeline yet for your potential Miami move? Also have you started with a broker yet? If not, I have some contacts you could work with and choose the best one for you loan needs.
Quote from @John Hernandez:
I am not 100%, but I am fairly certain an FHA is out of the question if you don't use it as a primary home.
Yes you are correct- FHA is for primary residence and you have to have the intent to live in the property for at least 1 year.
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Real Estate Agent Nebraska (#20210707)
- 402-968-3926
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The best way to have your cake and eat it too would be to find a 3 or 4 unit property that needs work, fix it up and refinance. Otherwise, it would be worth it to do 20% and get your money working for you. It is dying sitting in a bank account.
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Real Estate Agent Nebraska (#20210707)
- 402-968-3926
- [email protected]
Hi Lindsay, you can explore Debt Service Loan (aka DSCR, investor loans). It uses the projected rental income of a property instead of the borrowers income to qualify. Projected rental income is determined by appraisal. I think they require 15% down for the right deal.
Quote from @Ecaterina Katerina Morosan:
Hi Lindsay, you can explore Debt Service Loan (aka DSCR, investor loans). It uses the projected rental income of a property instead of the borrowers income to qualify. Projected rental income is determined by appraisal. I think they require 15% down for the right deal.
Thank you so much for your help! I will look into it!
@Raymond J. Rodrigues might have some insightful lending advice.
Hi @Lindsay Schubert, there are investment loans that lend up to 4-unit on investment property with as little as 15% down, but the numbers do have to add-up to where it makes sense for you from a cash flow perspective, because the rates will be higher. I'm happy to share my lending knowledge with you!
If you are looking for an agent in Miami to guide you in the right direction, I highly suggest speaking to @Malgorzata Sadowska. Aside from being a true expert in the area, she is a wonderful person! For anyone reading this and looking to invest in South Florida, reach out to @Malgorzata Sadowska :).
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Lender Texas (#2448506), Louisiana (#1039511), Georgia (#1039511), and Florida (#1450514)
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#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
- Investor
- Austin, TX
What's your question? How to come out of pocket nothing at closing? Utilize seller finance, you could take out the 20% down payment and have it financed by the seller
Hi,
Investment property yes 20% min, owner finance is another option. But you are dealing in Miami. Much capital from all over the world is investing where.
You are looking for a perfect deal.. First has to be a Good $$$ Deal. Then you are looking for best $$$ option low downpayment. Usually, you are going to run into value-added deals, owners with remodeled units and good rents believe me they don't sale. So likely will go with hard money loan then fix up and refi to cashout after six month in good low rate long term loan. Taking out as much capital from initial investment as possible.
Do you already have deals to analyze?
Keep going BP is the place to learn.
There are many programs that offer you to purchase the property which is great. But you would like to keep funds in your pocket for just in case. We have assisted clients in this situation with financing for the purchase and 100% of the rehab which works out great. One overall loan to complete purchase and rehab. Low down payments and no PPP when exiting from the loan. This is something I wish alot more investors were aware of. We all need to keep capital aside for rainy days.
See if you can use your 401k to purchase the property
There are quite a few different investors meetings on the island. Check https://www.biggerpockets.com/...
And talk to @Kathryn Morea
Cheers,
Yuriy
Quote from @Yuriy Skripnichenko:
There are quite a few different investors meetings on the island. Check https://www.biggerpockets.com/...
And talk to @Kathryn Morea
Cheers,
Yuriy
Thank you for the mention! Yes, lots of great deals in Puerto Rico - feel free to DM me!