Baltimore, MD · Member since 2016 · 57 posts · 17 votes
So today I found out that due to my high debt-to-income ration (61-percent) that I cannot qualify for a loan bigger than $100,000.
That puts a damper in my vision to purchase a triplex in the next few months. But not enough to stop me.
I live in Baltimore City and am trying to think of ways that I can overcome this sad sad truth of being a college grad making just $10k more than what my student loans are.
I talked to a guy about a 5 unit place here in Colorado not more than an hour ago. Asking price is $25k. I know of a 4-plex available for $32k here in Colorado as well. I had an offer turned down last week on a tri-plex...I offered $5k and the asking price is $10k - it's in Indiana.
I know if a duplex in Illinois that I'm currently inquiring on with an MLS asking price of $1,000.
YEAH! I saw a tax lien sale in this range too - - burned out foundation out in the Mohave - - too laughable for words. If that MLS for $1000 is such a deal, then why didn't you take it immediately?
Sorry man, this lacks any foundation for a sound REI endorsement IMO.
Don't blow smoke if you want any credibility.
By blowing smoke do you mean the $1,000 duplex....
Sorry about the school loans. If your loans are through FAFSA you can contact them to reduce your monthly payment which would help reduce your DTI.
1. Try looking at commercial loans. The approval is based on the numbers of the investment and not on your DTI. If the 25% down payment is a challenge you could seek out a private investor. Try local banks and not the large national ones. Go local/regional easier to work with.
Don't take no for an answer there is always a way to be creative.
Riverdale, MD · Member since 2016 · 18 posts · 12 votes
9y
Are you trying to house hack? If not, worth considering single family. Baltimore is an atypical place with few multis and many sub-80k single families.
Also, there are multis in Baltimore below 100k! Just keep your eyes peeled. They go fast though.
Investor · Denver, CO · Member since 2016 · 736 posts · 582 votes
9y
I talked to a guy about a 5 unit place here in Colorado not more than an hour ago. Asking price is $25k. I know of a 4-plex available for $32k here in Colorado as well. I had an offer turned down last week on a tri-plex...I offered $5k and the asking price is $10k - it's in Indiana.
I know if a duplex in Illinois that I'm currently inquiring on with an MLS asking price of $1,000.
It all depends on what you're looking for and what you're wanting to spend on rehab costs.
Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
9y
Originally posted by @Account Closed:
I talked to a guy about a 5 unit place here in Colorado not more than an hour ago. Asking price is $25k. I know of a 4-plex available for $32k here in Colorado as well. I had an offer turned down last week on a tri-plex...I offered $5k and the asking price is $10k - it's in Indiana.
I know if a duplex in Illinois that I'm currently inquiring on with an MLS asking price of $1,000.
YEAH! I saw a tax lien sale in this range too - - burned out foundation out in the Mohave - - too laughable for words. If that MLS for $1000 is such a deal, then why didn't you take it immediately?
Sorry man, this lacks any foundation for a sound REI endorsement IMO.
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
9y
Jasmine Wilborne Advice: work and save. If you're looking at a $100K triplex it's like 1.) in a warzone, 2.) in need of heavy rehab, or 3.) has heavy deferred maintenance. Consequently, the loan could be the least of your worries. Paying a mortgage with other renters is one thing, having to come up with $7K to replace an HVAC unexpectedly in month 2 of ownership is another. Not to be negative but there's likely outsized risk. Can you emotionally and financially stomach that risk?
I talked to a guy about a 5 unit place here in Colorado not more than an hour ago. Asking price is $25k. I know of a 4-plex available for $32k here in Colorado as well. I had an offer turned down last week on a tri-plex...I offered $5k and the asking price is $10k - it's in Indiana.
I know if a duplex in Illinois that I'm currently inquiring on with an MLS asking price of $1,000.
YEAH! I saw a tax lien sale in this range too - - burned out foundation out in the Mohave - - too laughable for words. If that MLS for $1000 is such a deal, then why didn't you take it immediately?
Sorry man, this lacks any foundation for a sound REI endorsement IMO.
Don't blow smoke if you want any credibility.
By blowing smoke do you mean the $1,000 duplex....
Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
9y
@Account Closed wouldn't take the time to even drive-by - - built in the 1900's - - really? I look for REI quality units, not community reconstruction or rehabs.
@Account Closed wouldn't take the time to even drive-by - - built in the 1900's - - really? I look for REI quality units, not community reconstruction or rehabs.
You call me out, I'll call you out. No need to get defensive.
Your strategy may be different than mine. My philosophy is to buy cheap and force appreciation up front through rehab then rent long term. All of the properties I looked at, mentioned, and linked to are cheap and worth a look for rehab - no different than what I suggested in my original post. I passed on the four plex in Pueblo because of the oil pit and possible remediation issues. I called and passed (reluctantly) on the five plex I called about because after getting the whole story on the property, my understanding is electric has been turned off for over a year which would mean re-wiring the whole place and bringing it up to code (which could be more than what it's worth). There are also asbestos issues. I'm still on the fence on this one - there could be opportunity but margins would be very thin (I know an electrician who is a relative that could help out on this). I'm waiting for more info on the duplex in Illinois. The property in Evansville would take as much cost in rehab as it's worth and I'm not comfortable with a $10k price - I could be persuaded for $5k which is what I offered.
Hudson, NH · Member since 2017 · 70 posts · 47 votes
9y
If you're buying a place that has existing tenants, some lenders will consider 75% of the rental income towards your dept-to-income ratio. That could help.
Are you on the income-based repayment plan with your student loans?
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
9y
@Jasmine Wilborne You can't always start where you want. But you should start where you can.
$100K is plenty to get started in Baltimore. SFHs (rowhouses) generally offer better returns the Multi family right now in Baltimore. $100K will get you a good SFH in a solid rental area.
When you say you only qualify for $100K, is that for a property you move into, or an investment prperty? It makes a big difference. Investment properties will be harder to finance. They will require more money down, and higher interest rates. Did the person that qualified you understand that you are looking at investment property? Did they explain that you may need a 20-25% down payment?
If you were thinking of moving into one of the units, that will make financing much easier. However finding a Multi family in a neighborhood you would want to live will be harder and much more expensive.
Real Estate Agent · Ashburn, VA · Member since 2017 · 12 posts · 1 vote
9y
Hi Jasmine,
May not be a bad idea to pursue a partnership and/or seller financing. Are you considering living in or AKA "house-hacking" this triplex? I agree that this news shouldn't stop you from pursuing deals but having a plan to aggressively pay down your debt should be just an important. It never hurts to seek out better interest rates on your student loans (check out sofi or darien rowayton bank). Id also recommend downloading some type of personal finance app, like Mint, which does a great job at helping you pay off debt, save money, and automate your budget. Best of luck Jasmine!
Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes
9y
The answer is yes, you can buy a multifamily for $100,000, but the real question is would you want to own a multifamily that you could buy for $100,000? I don't know the answer for you personally in your market, but I do know that this is the important question to be asking IMO.
Investor · Los Angeles, CA · Member since 2016 · 149 posts · 51 votes
9y
Partnering for a multifamily is probably the best solution here given your situation. Syndication would help you get to buying your own multifamily quickly.
Oceanside, CA · Member since 2016 · 12 posts · 2 votes
9y
Short answer is absolutely yes.
I think a better question is WHERE can I find $100k MF.
Searching on Redfin and speaking with a few property managers in the area I'm confident you can find what your looking for.
Cheers!
Travis
Baltimore, MD · Member since 2016 · 57 posts · 17 votes
9y
@Shawn Ackerman that's what the loan officer at MECU said: Bring on a partner or make more money. I'm not looking to wait until I make more money. I'm trying to get OUT OF the rat race not DEEPER IN IT. haha.
I need to expand my network so that I can be having these meaningful conversations with more seasoned investors. I guess my question is: Why would anyone partner with me?
I mean I would live there and manage the property and improve my rehab skills and project management, but I'm a total newbie.
Rental Property Investor · Saint Cloud, WI · Member since 2016 · 186 posts · 63 votes
9y
I understand your position. I too was once there. Please be very careful. It's one thing to want the property, but if your debt to income is where it is, how do you plan for needed maintenance or an unexpected large expense?
I don't intend to damper your motivation, because I feel it's great.
Just make sure to protect your investment in advance.
Investor · Denver, CO · Member since 2015 · 492 posts · 267 votes
9y
@Account Closed Welcome to the Pueblo, co Market. I invest heavily in this market. Minimum wage going up from $8/hr to $15/hr by 2020. Market is going to soar, rents are going to go through the roof. I own 9 properties their and I'm always look for more. I'll send you a message, lets meet up.
@Account Closed wouldn't take the time to even drive-by - - built in the 1900's - - really? I look for REI quality units, not community reconstruction or rehabs.
You call me out, I'll call you out. No need to get defensive.
Your strategy may be different than mine.
Sorry, I should not have been so aggressive - - apologies.
Clearly, I am not flipping or BRRR. Don't mind repairs, but I want to rent asap and anything more than one month of work is not in my wheelhouse.
Partnering for a multifamily is probably the best solution here given your situation. Syndication would help you get to buying your own multifamily quickly.
Unless you know something that I don't, then investors normally have to be accredited in order to participate in syndication deals, which I don't think the OP would qualify for. Or if you are referring to her becoming the syndicator, then that takes years of experience in growing and managing your own portfolio before a sensible investor would put their money with you to take down a large multi-family deal that they invest in, and even then the cost to set that up with all the lawyers, due dillegence, etc. is likely much more than the OP would have to invest, again unless you know something I don't or I'm misunderstanding you. The closest thing she could get to investing in a syndication deal is perhaps an REIT, which actually may not be such a bad plan. Otherwise, maybe there are crowdfunding platforms where you do not need to be accredited to put money into, but I would NOT recommend those to a newbie without the knowledge or experience to perform in depth due dilligence on those deals ... not trying to be any way insulting with that comment, it is just the reality that I do not believe that they are appropriate for new investors.