All Forum Posts by: Brett McManus

Just closed on the first duplex this past Spring at 22!

@Natan Gutt

I live in the neighborhood where this property is for sale. I am not in a place to pursue it myself, what i would say is be very watchful of the comps you are putting in. It is right on the fringe and when I pulled comps myself, noticed they were all over the place with many of the higher ones being in an area farther south that I do not know is truly comparable having walked the neighborhood on a near daily basis. 

Just some food for thought, best of luck!

Hi George, 

Awesome that you are looking into House Hacking. I just recently closed on my first duplex to house hack this spring and it has been fantastic! 

largest piece of advice that I have is get rock solid with the #'s. Do yourself a favor, get BP Pro and run every property you are looking at through the calculators. There were a few items like CapEx/Maintenance/Vacancy that I did not fully understand and miscalculated when I was first starting out. Although I got very lucky, I could have easily ended up very upside down! This will set you up for great success as you move towards future properties & advanced strategies.

2nd piece of advice I have is finding a rock solid Agent here on BP that understands REI. This was a piece of advice I received early on that was crucial to finding the right HH property while having someone looking out for me that had similar goals themselves.

Best of luck!

-Brett

Make sure you are familiarized & honest with yourself on Maintenance/CapEx specific to the property you are dealing with. These are items I did not fully account for in my original calculations and although everything worked out for me, I realize now I easily could have ended upside down knowing I was not taking them into proper consideration.

Hey Justin, 

Congrats on the first property! I am in the same spot and have been researching next options as well. Depending on your total income as well as DTI, the Home Possible program offers a 5% down conventional loan good for duplex's. Sounds like a pretty tight window to qualify and there seem to be talks of it disappearing but that is currently my plan for #2 before moving towards creative financing as a way to avoid locking up cash.

@Darius Ogloza, Any particular reason you left the area/liquidated your properties? 

I just recently closed on my first Duplex using an FHA loan with only 1-year in my current role. The only reason I was able to do this was the fact that I went straight from school into my full-time career. All I needed to do was write a letter explaining where I was submitted with a full-time transcript.

Big banks will not work with this. I needed to find a mortgage broker who made it happen. 

Make sure you have a steady income in place to obtain a loan. This almost bit me coming out of college as many lenders want to see 2 years of consistent pay regardless of being self employed or not. Luckily, they will make amends for this if the 2 years of pays is broken up by school. 

Best advice is work on finding steady, consistent, (salaried if possible), pay if you have not already. In addition to that it never hurts to start building up some credit as well, again, if you haven't already. Student loans are great for this and credit cards as long as you use them the right way. Be careful with Cars as these can be major DTI sucks if you go out and buy something beyond what you can afford.

Something to keep in mind!

As a new investor I, along with what appear to be many others, have fallen under the BRRRR spell with all of the benefits that it can provide. Over the past few months I have began working with individuals in my local area in an attempt to develop actionable steps and have began finding that it might not be as straight forward as some of the podcasts make it out to be.

The main subject area I am talking about is obtaining Hard Money as an option to fund BRRRR for those who do not have an ample supply of cash on hand. In many of the podcasts this is made out to be a very simple process as lenders look at the property not you, low credit not an issue, no money out of your pocket, etc. however, in all reality, you need quite a bit of liquid cash for down payments, collateral, etc.

Can anyone shed some light on the realities of what hard money lenders look for in regards to prior experience, liquid cash on hand, down payments, etc.?

@Kirk Zandier

Yes, I am leveraging the current times to determine exactly how the next deal will come to life. The following are two strategies I am running side x side to make this happen:

1) Once my 1 year homestead requirement is up, I will at minimum look to Copy & paste the same process I used on the first to acquire another duplex with an FHA loan. This time around I will likely look at FHA203K as an alternative option which will drive more equity through further rehab/improvement.

2) As I look to ramp up the process quicker than 1 deal per year, I am dialing in my deal analysis/networking skills to be able to identify great investment opportunities & pull in partners should a great deal arise. This is where I am currently spending majority of my efforts as I hope to begin partnering with passive investors on a few deals while simultaneously building up my portfolio with owner-occupied units per the strategy above. 

The goal of both of these is to slowly begin building equity in order to begin proper BRRRR investment for the long-term.