All Forum Posts by: Brian Adzadi

@David Almendarez

If your credit score is 620 or more, you can use an FHA loan to buy a multifamily unit with a low down payment. Your tenant lives in one unit, while you live in the other. FHA requires that you live in one part of the unit for at least 1 year, then you can move out and rent out both units when you move out.

@Nick Farrell

It all depends on the type of person your father is and how good of a relationship you two have.

If he has the following qualities then I would suggest not going any further with him

1. An overbearing stick in the mud

2. General dictator, you do as I say, You are wrong, I am right

3. Lackadaisical, you will be doing most of the grunt work

4. Passive aggressive

5. Any other personality that you are not fond of

Altogether, if you have to come to biggerpockets to ask if you should go into business with your father then shouldn't that be a sign that maybe you shouldn't? You are asking complete strangers to make a judgment call about someone you have known your whole life. If he is a business savvy go getter then I am pretty sure you wouldn't have thought twice about doing business with him.

There is nothing wrong with going solo. Make your own path. Sometimes its better to not have family involved with business. Muddies the water.

@Rory Samuels

There are very few mortgage programs out there that require no money down. FHA requires a down payment, those rural homestead mortgage programs require a down payment and those first responder/teacher/medical mortgage program require some kind of down payment. The only program that is available which is truly no money down is a VA loan. So unless you are a veteran, you are going to have to find a way to raise capital.

There are a variety of ways to raise capital. You can tell family members with money about your real estate ambitions and see if they want to partner with you on your endeavor, or they can gift you money to start investing with. You can also raid your retirement account by taking out a loan from your 401K or Pension plan to use as down payment. You do some extra shifts or side hustles that you can save to build capital.

If there is a will, there is a way. However, I do want you to understand that you will ALWAYS have to have money for a down payment when doing rental properties, it doesn't have to be YOUR money but there has to be SOME money, from somewhere.

@Sachin T.

Hopefully we can get @Brandon Hall on this conversation, because I could be wrong about the next statement I am about to make and I would like his opinion on it. I think from a tax perspective, I think the IRS may become suspicious of a business or an investment that continues to make negative profits for years. They would ask why has this person either filed for bankruptcy or sold the property?

Once again, I may be wrong and hopefully other experts on here may be able to chime in.

@Andrew Perkins

You are in a marriage. Your wife is pretty much your business partner. I would start trying to include her in a lot of your REI research such as, reading Robert Kiyosaki's book Rich Dad Poor Dad, have her watch Biggerpockets podcasts on Youtube with you, start having her more involved in your finances.

Once you are both in agreement that REI is where you want to be, start making money moves to reach those goals. Balancing work and family will get a little easier once your 4 year old reaches pre-k and you guys start to have time to focus on the newborn and your REI goals.

Its not going to be easy but once you and your wife get on the same page, you will be amazed at how much you will be able to accomplish.  

@Devonte Perdue

LOL. You sound like me when I was starting my real estate investor journey. The difference between you and me is, I was married with kids, so house hacking was not happening at all. My wife was ok with getting a property, as long as the tenant did not live above, below or to the side of us.

When we did start looking, we initially wanted a multifamily for the obvious security in knowing if one tenant does not pay, there is still another to cover the mortgage. However, the multifamily in my area is very competitive, I was getting outbid left and right. I thought I would never find anything.

That's when my wife suggest we switch to single family rental. Just with that small change, we were able to find a house, close on it and rent it out within a month.

So trust me, its just the name of the game. You can still win in real estate, you may just have to switch up your play. I am pretty sure you can find a primary residence and a single family rental at the same time or within one year of each other.

@David Johnson

The point of a lease is not just a contract to tell the renter how much they will be paying per month. It turns the potential grey areas to black and white. For example, who is responsible for snow removal, you or the tenant, how long can they have a guest until the guest is considered a resident there and should also be paying rent, you encouraged the tenant to get renter's insurance because you will not be responsible for any damaged or stolen items, etc.

Remember you can write a lease for a month a month tenant, the lease just automatic renews when they pay rent. You can end the lease buy giving a 30 day notice.

So to answer your question, YES, there are legal issues that can make it hard to make judgment on because there is no lease to set rules and regulations.  

@Kent Nielson

Yes you are right. You are not cash flowing if you have not considered all those in between expenses. However, what I have seen in these forums is that people who are falsely saying they are cash flowing tend to be the newbie investors. You can't blame them, they are excited to actually start this journey and are over zealous with their numbers. To be honest, I was like that when I bought my rental. Now that it is getting close to 2 years with the rental and all those expenses started hitting me like a ton of bricks, I no longer say I am cash flowing. I say I am in the black, for now. LOL. Good talk. Happy investing.

@Kenneth Rodgers

I am not a lending specialist but I think lenders and banks frown upon using a loan as down payment for a loan. That is what you are doing with option 1 pretty much. I could be wrong and if there is any lending experts on this forum that can correct me, please do.

I personally would prefer option 2. Take out all the equity to buy a Multifamily unit, preferably a minimum of a 3 unit. If you can only get a 2 unit, I would see if I can rent the place out not by units but by rooms. That way, you can get a higher cash flow.

The reason why I suggest a minimum of 3 units or renting out rooms is because you want to maximize your cash flow so that you can pay back the loan faster to free up the credit line for the next property.

@Brad R.

Its interesting that you should bring this topic up because I just finished reading a biggerpockets blog by Brandon Turner that talks about this same exact thing. Here it is

https://www.biggerpockets.com/blog/all-cash

Very good blog. Read it and make your own decisions about it.