All Forum Posts by: Benjamin Aaker

It'll be tough to not use any of your own money. There often is a lot of incidental expenses in the deal finding phase. Networking to find partners or starting a syndication as Nathan says above would be some ways.

Another way would be to either refinance or take out lines of credits on your current rentals to purchase the next one(s). 

If you're correct on the ARV of 239k, then your max price will be 225k. It's unusual for your loan to be a higher rate than the HELOC, but looks like your LTV is 83%, also unusual.

A typical commercial loan for this property would have LTV of 75% for a new investor. That will mean you'll need to come up with 56k down. Just make sure you have your loan quote numbers correct. Additionally, I suspect you could do better on the rate, but maybe you have negotiated for a higher LTV and higher rate?

At those numbers, mortgage is 1,400 a month and you'll be under water with the HELOC payments.

Going with your figures, $200 for cap ex and repairs seems reasonable, so if all your assumptions are correct, your rent would pay the HELOC and its own mortgage with the leftover for capex/repairs. Make sure you have a contingency for paying the loans when you are doing the initial rehab and factor in vacancy as well.

Quote from @Sam Evrard:

Quote from @Benjamin Aaker:

House hack a 4 plex. Do you have family who could cosign a loan? That would get you started right away. 

 What would cosigning do specifically?

Having a cosigner can help you get a loan you otherwise would not have been able to get. 

House hack a 4 plex. Do you have family who could cosign a loan? That would get you started right away. 

I recommend setting up the LLC now and using that to purchase your properties. You'll still need good liability coverage with umbrella. It will cost more to borrow for the LLC. Why do it? Scaling. You'll want to have the systems set up to grow and it's a lot easier. Also, I like the liability protections and don't want my personal wealth to be tied up in the property. True, it's not ironclad protection, but for high net worth individuals, the risk is higher.

Hello and welcome to the forums!

That's going to take some time to raise, unless you already have a network, which you don't. Networking is going to be the best way to do it. It takes time, so get started now. 

Hi Sridhar and welcome to BP!

It's really a win-win to get the line of credit set up. There's an appraisal and annual maintenance fee, but then the money is ready to go when you need it. Way faster than a mortgage. It's a small cost for ready access to money. 

Agree with @Paul De Luca. Depends on your carrier. Ask your insurance agent. Get it wrong and you risk not having coverage when a loss happens.