Real Estate Agent · Murfreesboro, TN · Member since 2017 · 8 posts · 2 votes
I was just wanting to know is there another way to continue growing the number of rental properties without having to put 20% down each time. I hate to drain my savings that low and then it takes forever to save enough to buy another one. I really want to have 15 properties by the time I am 35. Thoughts?? Thanks foe the advice in advance.
Real Estate Agent · Murfreesboro, TN · Member since 2017 · 8 posts · 2 votes
9y
Thanks @Derrick Dill. I did that with my first property now my wife wants to stay in the house we are currently in. I have not ruled that option out though.
Bedford Park, IL · Member since 2016 · 103 posts · 44 votes
9y
@Derrick Dill, I just bought a live and rent with 3.5% down. I will put 20K. Should have 30K in equity. Since it's fha can you still cash out?or just refinance to conventional mortgage?
Investor · Menifee, CA · Member since 2015 · 534 posts · 216 votes
9y
Pull a list of non owner occupied free and clear properties in your area, create a letter and mail to the owner. Wait for them to call you and shoot for seller financing with them. I do it all the time and just landed an outstanding deal with great terms. I think seller financing is the best way to go. You, the seller and whatever terms you guys agree on. Always keep your mind working on these deals, they are not cut and dry like conventional loans. Use the repairs needed to your advantage, no inspections or appraisals needed, tax benefits in stretching the loan out over time, offer a balloon payment if he doesn't want to wait a long time for his money, etc etc etc. THESE ARE ACTUALLY FUN TO DO!
Rental Property Investor · Nederland, TX · Member since 2017 · 44 posts · 30 votes
9y
Mike Flora what's the best way to find that list? I do a similar mailer just by driving by s property and mailing it. I'm in Texas, do u know how I could find a list like that? Thanks
Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
9y
If you buy conventionally, it gets WORSE than putting 20% down, because as you move into properties 7 to 10, Fannie Mae and Freddie Mac require 25% down, plus 720 FICO scores and above. Over 10 mortgages, and it is time to move to portfolio loans or commercial.
This is one reason why it is smart to buy small multifamily early, if you plan on getting into them at all. By this, I mean that you can add 2 to 4 doors with each mortgage you put in place, and increase your cash flow.
When we were younger, we became serial movers and lived in one house, fixed it up and rented it, and then moved into the next house. We could get owner occupied down payments and interest rates. Our lender would allow us to go to 20 houses that way, as long as we lived in each one for at least 12 months.
Depends on your LTV, need >20% equity to do a cash out in most cases. Cash-out refinance will probably raise your interest rate though.
If you put in a good amount of work into the property, I would consider the cash-out, but the main point is just to get out of the FHA loan (to get rid of PMI, and so you can do another FHA loan).
Bedford Park, IL · Member since 2016 · 103 posts · 44 votes
9y
@Derrick Dill, I wanted to pay back a loan with the cash out. Yes we are doing work and should have 30~35K in equity. I'm just not sure if we can cash out refi based on original fha loan. And I agree I would refi anyhow to rid pmi interest.