Looking for investment loan for second investment property
Hi
I already own an investment property. I'm looking to buy another property out of state in Round Rock TX area. It is a single family home rental, but I dont have a good rate. I have ~15% down payment. my concern is how am I going to get any cash flow from my second investment because the mortgage payment will be high. Does anyone have any alternative solutions including private lending? Thank you in advance.
P. S. The deal will be up to 350k (still negotiating) for about net expected 2-2.1k cash flow.
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@Vibhor Khanna I'm going to share some things that might sound controversial but let me explain my views here if you don't mind:
1. Are you a full time investor that doesn't flip? - Meaning, do you need that cashflow to survive? If you do....then your choices are really narrow. You are forced to take a lower loan amount to have that income since you don't have income from flipping. If you do flip, that's how we really make money as a full time investor. Clearing $50,000 on a flip would take us over 17 YEARS to make at $250 per month of cashflow. We keep properties for the appreciation and tax deductions mainly.
2. Andrew, everything I read is about making cash flow so I don't have to work - Yes, I read those same books, listen to those same podcasts, etc. Sounds really nice, right? "Quit your day job and sit back and collect mailbox money". I mean, that's how they position it, right? So if there's no cash flow....can they sell books? Would you buy their "guru course"? The reason why I bring this up is we used to NEVER talk about cashflow back in the day. That's a recent thing - and cash flow is spun in a way that's....well, "different" let's say.
3. Long Term - you will cash flow eventually on a property that you acquire right now. But this would mean you would not make any money on it right now. That's how it might be for a while now. Maybe a few years even. I'm not saying you should not buy properties...but we need to think about real estate REALISTICALLY. This is not a get-rich-quick scheme. It never was...even though some people sell it that way.
Read this article HERE that Brandon Turner wrote about making $100k on properties (without cashflow) and see how you feel. Many of us have been following this technique for a while now. It works very well.
Hope all of that makes sense but feel free to ask anything additional. Thanks!
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How is private lending going to solve your issue of cash flow?
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This is just the reality right now with SFR investing, especially in elevated markets such as the Austin MSA. If you are leveraged at 85%, its going to be pretty much impossible to cash flow with any sort of financing. Need to be able to stomach a negative cash flow at the beginning of a long time horizon or put more money down if you want to cash flow in this area most likely
Quote from @Eliott Elias:My understanding is interest rates are different so, it can make a huge difference in making net zero ( vs negative currently) and then relying on appreciation to kick start future.
How is private lending going to solve your issue of cash flow?
Quote from @Robin Simon:
This is just the reality right now with SFR investing, especially in elevated markets such as the Austin MSA. If you are leveraged at 85%, its going to be pretty much impossible to cash flow with any sort of financing. Need to be able to stomach a negative cash flow at the beginning of a long time horizon or put more money down if you want to cash flow in this area most likely
Thanks! I can do up to 20%, but looking for net zero options. Not inclined be negative.
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Quote from @Vibhor Khanna:
Quote from @Eliott Elias:My understanding is interest rates are different so, it can make a huge difference in making net zero ( vs negative currently) and then relying on appreciation to kick start future.
How is private lending going to solve your issue of cash flow?
Private money is some of the most expensive money. The benefit to it is its accessibility and speed.
Quote from @Vibhor Khanna:
Hi
I already own an investment property. I'm looking to buy another property out of state in Round Rock TX area. It is a single family home rental, but I dont have a good rate. I have ~15% down payment. my concern is how am I going to get any cash flow from my second investment because the mortgage payment will be high. Does anyone have any alternative solutions including private lending? Thank you in advance.
P. S. The deal will be up to 350k (still negotiating) for about net expected 2-2.1k cash flow.
How long have you been a land lord? What is the DTI and Credit? We lend and typically rate is a function of credit, DTI and downpayment. I can lend in Texas if you want to see more quotes. Here is the eligibility matrix that we use without overlays. I can't speak for private lending.
Quote from @Michael Hutchinson:
Quote from @Vibhor Khanna:
Hi
I already own an investment property. I'm looking to buy another property out of state in Round Rock TX area. It is a single family home rental, but I dont have a good rate. I have ~15% down payment. my concern is how am I going to get any cash flow from my second investment because the mortgage payment will be high. Does anyone have any alternative solutions including private lending? Thank you in advance.
P. S. The deal will be up to 350k (still negotiating) for about net expected 2-2.1k cash flow.
How long have you been a land lord? What is the DTI and Credit? We lend and typically rate is a function of credit, DTI and downpayment. I can lend in Texas if you want to see more quotes. Here is the eligibility matrix that we use without overlays. I can't speak for private lending.
Landlord - 2+ years
Credit- 780+
Dti- 25%
@Vibhor Khanna have you looked into furnished monthly rentals? Many times you can double your cashflow
