Newbie looking for direction

8 Replies

Hello;

I'm in NY, my niche' is "Student Housing". I've locked up my first property, very nice, clean, great shape. Did not steal the property, nor over pay for it. got it at a fair price. All signed leases for next year are in place, great cash flow.

Looking for a second one. Needing experienced investors insights on how to gain, #2, #3, #4, #5....... properties.

This first one will have no mortgage, paid in full. Idea's of financing for additional properties.

Looking to grow somewhat quickly, just don't want to wait 4-5 years for the next one and so on? Any insights, idea's, recommendations, thoughts, please pass them along.

Thanks

Best advice I can offer is just always be looking. When you are driving for dollars keep your eyes open for any FSBO, and watch the for Rent signs. You might call people with rentals and see if they have any they would be willing to sell. Advertise that you are looking, and put yourself a website to start building a web presence.

@Vince Futia  

You could fill beds for other peoples properties and take some off the top. A buddy filled a 3 family 10 beds takes $100 a month off the top for each bed she makes $1,000 a month on a property she doesn't own nor manage.

Paul

always have cash available, if you purchased your first property cash, now get a line of credit against it so you have instant cash for the next one, no interest accrues until you find the next property. 

Sellers love cash offers and if you wait until you have found the next property to figure out where that cash can come from, you may be too late. 

good advice @Eric Christians  , can you open lines of credit on numerous rental properties? If so, would the bank take current appraisal or would they require the 6-12 month seasoning in order to use current appraisals? 

In my experience, if you wish to do a cash out refi on a property not above 70-80% of purchase price, you should have ownership for six months. 

If you believe you have a lot of equity in the home and you wish to tap into that and refi at 70-80% of what you believe will be the true value of the home, you will likely have to own the property for a year. 

Either one will likely require an appraisal unless you can find a good bank who does a lot of in house commercial type loans. If you're a buy & hold guy, it may be worth paying for the appraisal, will possibly get you better financing. 

Sounds like your in a multi deal so may vary. I have a lot of experience with single family homes but I have never done any creative financing on multi-family, I only own one and bought it the 20% down, boring old fashioned way.

Originally posted by @Jake Engle :

good advice @Eric Christians , can you open lines of credit on numerous rental properties? If so, would the bank take current appraisal or would they require the 6-12 month seasoning in order to use current appraisals? 

 I missed the first part of your question about "numerous rental properties?" I currently have multiple lines of credit open on single family homes but they are all in house loans so it is all about finding the right bank. I must have talked to 25 different bankers, all telling me there is absolutely no way to do the things I wanted to do, I only needed one to say yes and eventually found them. The equity does need to be there in order to open a line of credit. 

Vince, I'm new to this, and new in the forum, but I'm going to throw something out there.  Go slow.  It is a marathon, not a sprint.  Fill your first unit, and learn what you don't know that you don't know.  It is tempting to get all excited and want to go deep fast.  Well done on your cash purchase.  Give it some time though, and see how the process goes.  Start saving for the next deal.  Make sure you get good solid tenants in.  Get some financing in place, but don't over leverage.  You have to have reserves for WHEN things go wrong.  I've watched a lot of people go too aggressive.  You have a fantastic foundation, but there is a leaning curve just as in any business. 

Well done on your first property btw.  Keep your eyes on the big picture though.  Create a long term plan.  Stick to the plan.  Don't get stressed out.  

Just my two cents. 

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