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All Forum Posts by: Benjamin Aaker

Benjamin Aaker has started 15 posts and replied 1619 times.

Post: Where to source a new build Duplex on family land

Benjamin Aaker
Posted
  • Rental Property Investor
  • Brandon, SD
  • Posts 1,635
  • Votes 1,093
Make sure you check the local ordinances / zoning and talk to the local administrator to see if you can do what you are planning.

Post: Small multi 2-4 units vs 5-20 units?

Benjamin Aaker
Posted
  • Rental Property Investor
  • Brandon, SD
  • Posts 1,635
  • Votes 1,093

Great advice from @Jaycee Greene. With the economy of scale in multifamily, each additional unit nets you a little more than the last, as a rule of thumb. More units usually is better, but costs more. It also adds complexity to management. If you are hiring a PM, then it's not a big difference either way, but if self-managing you don't want to go much bigger than you have been or you may not be able to do all the work. Bottom line is buy as big as you can reasonably buy once you are out of small multifamily. 

Post: How to self-manage out-of-state property

Benjamin Aaker
Posted
  • Rental Property Investor
  • Brandon, SD
  • Posts 1,635
  • Votes 1,093
I've not self-managed out of state, but I have self-managed before. Once you have that experience, then consider managing out of state. It can be done and people do it, but to start out not knowing what is necessary will very probably cause you to lose money, to say the least. Deals can be found in any market. Keep looking at them and saving money to find the right one. Learn how to manage, then consider going out of state.

Post: 10% down or 20% down???

Benjamin Aaker
Posted
  • Rental Property Investor
  • Brandon, SD
  • Posts 1,635
  • Votes 1,093

I won't repeat others' questions that have been posted already. I will add that to your question of 10% or 20%, you need to ask yourself whether you need the cashflow or not. 10% down would leave some money with which to buy more properties. If you don't intend to do that right away then do the 20% and save the extra cash flow. This decision will also be impacted by your interest rate. You will need to look at all the numbers in your underwriting spreadsheet (let me know if you need one) in both scenarios to decide.

Post: Advice Needed: Buy Property under LLC or buy under personal and then move to LLC

Benjamin Aaker
Posted
  • Rental Property Investor
  • Brandon, SD
  • Posts 1,635
  • Votes 1,093
The lender is pushing you to do this to get an FHA loan. This lender is probably in the residential niche and is trying to get your business for a loan. If you are not planning to live in the property, then you are not going to qualify for an FHA loan. Though many investors bend the rules and possibly don't get caught, you have the financial situation to do it correctly. For investments, you'll likely want a conventional loan for commercial properties. While not mandatory to purchase in an LLC, I would recommend it.

Post: Best Loan types for short term rentals

Benjamin Aaker
Posted
  • Rental Property Investor
  • Brandon, SD
  • Posts 1,635
  • Votes 1,093
Quote from @Priscilla C.:
Quote from @Benjamin Aaker:
Since you will be renting it out you should get a conventional loan. What would you do with your current residence if you planned on living in the new one to get an FHA loan?
Ok yeah we are thinking of getting an investment property loan so we can stay in our current home.If we did the FHA route we are considering on living in the new property for 1 year and then moving back into our old one after the year is up.We are curious if we would get a more favorable rate if we borrowed from our home equity to buy the investment property.Do you have any idea if many investors borrow from their home equity to get started?

Yes, you can get a HELOC on your primary residence. There are risks as you are tying up your primary residence in the project. Failing might mean losing your house. If you do want to go this route, make sure that the underwriting of the investment property pays back both its mortgage and the monthly HELOC. If it can't, then don't consider it.

Post: New real estate investor

Benjamin Aaker
Posted
  • Rental Property Investor
  • Brandon, SD
  • Posts 1,635
  • Votes 1,093
HI Daniel and welcome to BP. Good luck with your investing.

Post: Strategies for second property

Benjamin Aaker
Posted
  • Rental Property Investor
  • Brandon, SD
  • Posts 1,635
  • Votes 1,093

Talk to your banker about your plan. That person will be able to tell you what you can do and following that plan will give you peace of mind about your further investing strategy.

Post: Flooded House-Plz Help

Benjamin Aaker
Posted
  • Rental Property Investor
  • Brandon, SD
  • Posts 1,635
  • Votes 1,093
Get a damage restoration company involved. Your insurer could recommend one or you can check Google (and, of course, the reviews). The moisture issue and structural issue need to be addressed and you can do so before the insurance adjuster comes out. Once any ongoing damage has been mitigated, you'll need to have a lot of contact with your insurer to discuss your rehab plan.

Post: Best strategy to scale my investments

Benjamin Aaker
Posted
  • Rental Property Investor
  • Brandon, SD
  • Posts 1,635
  • Votes 1,093

I recommend keeping your eyes open for medium multifamily properties. Work on getting a down payment saved up while managing your townhomes. Then buy if the time/deal is right.