Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
5y
I bought a new primary and a renal every year for 5 years. Usually at the same time so I didn’t need to provide all the paperwork twice per year. If you can’t afford 2 x 20-25% down loans you can get one 20-25% and one 4-5% owner occupied loan.
Can’t swing that? Get one 5% owner occupied every year. In 5 years you’ll be ahead of 80% of Americans (99% of earthlings). Do it for 10 years and you’ll be ahead of 90% and 99.5%.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
5y
I bought a new primary and a renal every year for 5 years. Usually at the same time so I didn’t need to provide all the paperwork twice per year. If you can’t afford 2 x 20-25% down loans you can get one 20-25% and one 4-5% owner occupied loan.
Can’t swing that? Get one 5% owner occupied every year. In 5 years you’ll be ahead of 80% of Americans (99% of earthlings). Do it for 10 years and you’ll be ahead of 90% and 99.5%.
Rental Property Investor · Columbus, OH · Member since 2015 · 184 posts · 162 votes
5y
@Krystal Marquez so you can save around $25k per year? You can get two small 2 bed 1 bath houses in the Midwest for $50k each that rent for $650/750 each; focus on finding great deals and partner with cash providers/investors so you own it and get cash flow while they get 7-10% interest and you can get more properties and gradually refinance; get a FHA loan (3.5% down) on the largest property you can get snd live in one and rent the other units; get another part time job or better paying full time job to save and invest more.
Rental Property Investor · Waterbury, CT · Member since 2020 · 28 posts · 52 votes
5y
@Justin Gottuso sounds good justin. Now I'm leaving in my primary residence I put 3% down and I'm looking for my 3rd property, I got approved for 100k I'm thinking in GA and OH. 50k rent 650/ 750 sounds good.
Rental Property Investor · Murrieta, CA · Member since 2020 · 338 posts · 343 votes
5y
@Krystal Marquez Instead of buying one house every year have you thought about scaling by buying a duplex, triplex, or fourplex? If you want to leave your W2 the easiest way is by buying MF. Once you start seeing the benefits you will start to realize that you can reach your goals faster by scaling. Also commercial MF (5+units) is based off of income and not on comparables. When you buy the buildings it is like buying a small business that you can add value to by increasing the income and decreasing the expenses, and that effects the value of the building/business.
It really depends on what you are buying and how much money you have/can borrow. If you are buying cheap houses that are $30K, sure but keep money in reserves for the type of tenants you are likely to get. If the houses are $200k, you'll probably run into problems quickly trying to get money for the down payment and ability to borrow.
Rental Property Investor · Columbus, OH · Member since 2015 · 184 posts · 162 votes
5y
@Krystal Marquez smart. We also did the lowest for our primary residence/5% and lid off the PMI up front and used the $70k we saved to buy more rental properties LOL :-)
If you have $100k that can get you a triplex that grosses around $1,800 per month out here (I’m in Ohio). If you want the best deal and best opportunity to get the property you want pay all cash then finance after 6 months. You could also ‘be the bank’ and loan your money to other investors and get the cash flowing without the responsibility and liability of ownership.
Rental Property Investor · Waterbury, CT · Member since 2020 · 28 posts · 52 votes
5y
@Nick Robinson sure! I would love to buy multi family and duxples in the future, but I want to get more knowledge and experience before move to that level.
Rental Property Investor · Murrieta, CA · Member since 2020 · 338 posts · 343 votes
5y
@Krystal Marquez I understand what your saying but you will never know everything or be prepared for anything. If you have 2 rentals you already have experience. You run the numbers the exact same way the numbers will just be bigger. If you are just buying SFR and making $200-$300/unit it is going to take you forever to get financial freedom and replace your W2.
Rental Property Investor · Waterbury, CT · Member since 2020 · 28 posts · 52 votes
5y
@Justin Gottuso wow nice! Right now the market is hot, buy cash is definitely the option. 100k ROI 1800 it past the 1% rule almost the 2% I'll start digging in OH :)
@Theresa Harris I want to keep my investing under 100k. I'm having a hard time finding a good deal. So far I'm doing well with the bank.
I have don't know what $100K buys in the markets you are looking in. Remember to factor in all the costs (turn over, type of tenant, etc). Cheaper places can have higher operating costs.
Rental Property Investor · Waterbury, CT · Member since 2020 · 28 posts · 52 votes
5y
@John Morgan wow 10 properties in 5 years how you did that. That is because you're part of the JP Morgan family right? Lol. 20 is my goal, I don't want to quit my job and then have to come back. I'm planning to do wholesale and flip to get more cash.
@John Morgan wow 10 properties in 5 years how you did that. That is because you're part of the JP Morgan family right? Lol. 20 is my goal, I don't want to quit my job and then have to come back. I'm planning to do wholesale and flip to get more cash.
I got a little creative to pick up 10 properties in 5 years. I paid 130k cash for my first property. I pulled $ out of our Roth IRAs and took a HELOC out on my primary to get the money. I did a cash our refi on it 4 years later. The bank gave me all my money back plus 10k for a total of 140k cash back to me. I took that $ and BRRRRd three homes. I also bought a couple other properties with 401k loans. Did a 1031 exchange on one. Took 100k out on my primary to do a cash out refi. I used that $ to buy three homes in the 125k range with 20% down.
I got creative, but it’s doable if you get a little creative. I also use credit cards with no interest for a year to fund my rehabs. Dave Ramsey wouldn’t be proud of my method but my properties are worth 2 million combined now. I owe 700k, but I’ve got great long term tenants paying these 15 year loans off. Cash flow is about $4500/month now but will be 10-12k/month when they’re all paid off in 10-14 years
Rental Property Investor · Waterbury, CT · Member since 2020 · 28 posts · 52 votes
5y
@John Morgan yeah for been successful in this business you have to be very creative and positive. You did some smart moves, but what helped you a lot was that you had 130k in cash and 401k.
Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes
5y
If you live way below your means, drive paid off cars, no personal debt, decent job, good savings;
- Buy a house to live in with conventional 95% loan of a small 3/2 in decent but cheaper neighborhood. Read my paper linked off my BP profile: how to buy a bullet proof portfolio.
- in 13 mo you've saved another 5% down and buy another house to live in and move. Rent prior house. This gives you 1 new rental every 12-24 mo with cheaper occupant loans. Limited only by your ability to save 5% down and rehab cash
- You live way below your means. You can buy another rental each year at 80% LTV/20% down.
Don't forget that if the house needs repairs the occupant loan or rental loan can be a "home style" repair+purchase loan. I like using swbc.com as the lender for home style loans. They are good at this process.
Its easier to do this with a spouce / partner who has decent W2 job / income.
FWIW my wife and I, not insane high incomes but a teacher and an engineer, no kids, no debt, at our peak bought, fixed, rented 10 houses in one year. Thinking back, I can't imagine how we did that?@?
Yes some of those houses where cash, no bank. Banks will limit you after awhile then yuou jump to DSCR/rent based 30 yr commercial loans. I just checked and a DSCR/asset based 30 yr buy and hold loan was 4.2%, but no limits on how many you can have. We have a few of these at 6.7%. They cash flow great. Its all in how you buy, the price, the rent, whether it will cash flow the goal of >>$300/door. After a year you rent raise $75 and year after. So cash flow goes up over time.
Buy all the buy and hold, brrrr, books BP has in its library. Hook up with your local REIA. Find investor groups in meetup.org etc. Google city name REIA.
@John Morgan yeah for been successful in this business you have to be very creative and positive. You did some smart moves, but what helped you a lot was that you had 130k in cash and 401k.
I didn’t have 130k cash sitting around when I lobbed out an offer for my first rental property when my low ball offer was accepted by the seller. I only had 30k in savings. I had to get creative to come up with the remaining 100k in less than 2 weeks. Fortunately I invested in our our Roth IRAs over the years and was able to pull out 62k from it tax free. I tell young people to stash as much into their Roth IRAs as possible. Then you can take out what you’ve put into it tax free for whatever reason any time. This definitely got me in the game. And yes, my ability to borrow up to 50k from my 401k helped me immensely too!