All Forum Posts by: Brian M.

My question is on debt to income ratio and how that metric limits your ability to obtain additional mortgages in order to expand your MF residential real estate portfolio.

When I purchase my first MF residential property, with the intent of holding onto to it for the long term, it will be difficult to get approved for another mortgage as I will be close to my debt to income ratio limit.

Are there strategies or suggestions on how to best navigate the debt to income ratio limits for a buy and hold strategy investor?

Thanks

My question is on debt to income ratio and how that metric limits your ability to obtain additional mortgages in order to expand your MF residential real estate portfolio.

When I purchase my first MF residential property, with the intent of holding onto to it for the long term, it will be difficult to get approved for another mortgage as I will be close to my debt to income ratio limit.

Are there strategies or suggestions on how to best navigate the debt to income ratio limits for a buy and hold strategy investor?

Thanks,

Thanks @Brad Hammond for your advice.

I'm 23 and live and work in the metropolitan NJ-NYC area. I would like to purchase a MF in this area. However, with the current market, it's been difficult to find a MF or SF with numbers that break even never mind produce a positive cash flow. Especially with a FHA 3.5% down payment plus the upfront and monthly MIP.

By year end, I should be able to put down 20%. Would prefer not to use all of my cash on a DP if possible so I can maintain cash reserves. That’s where I am struggling strategically.

I am interested in purchasing a multi family using a 3.5% DP FHA loan and living in one of the units. However, I was wondering if it's better to use the same loan for a single family house instead. I did notice that the FHA MIP adds up quickly on the monthly payment.

Looking forward to the feedback.

Thanks,

I'm new to real estate investing and hope to make it a successful career over the next 30 years. I plan on making my first investment in the next 12 months hopefully when the housing market cools down a bit. My questions are:

If the initial equity I put into a buying an investment home is $100K ($90K DP and $10K rebab), is it best to sell the property when my initial equity doubles and use the $200K to purchase a larger property? 

Is there a scenario when it makes more sense to continue to hold the property even after the initial equity has doubled? 

Thanks.

@Joseph Vu

Hi Joseph. Yes, I am planning to live in the multi family I buy hopefully in the next 12 months.

I’ve been looking in NJ but in today’s market it’s difficult to find a multi family home that breaks even never mind makes a profit. I use the calculators on BG.

My question is on initial equity (down payment & rehab costs) and when best to sell a residential multi family property in order to roll into another investment property. 

Example: if the initial equity I have in a multi family home is $100K ($90K DP and $10K in rehab) is it best to sell this property when my initial equity of $100K doubles? Are there scenarios when holding the property for a longer period of time, even after initial equity doubles, is a wiser strategy?

Thanks

Hi Brad. I was hoping to get your thoughts on a long term buy and hold strategy acquiring residential multi family homes.

By year 30, my investment properties will be paid off, I will take equity out of the properties if needed and will pass my portfolio to my future family.

With a long term buy and hold strategy: does having a negative CoC return matter if the 5 year annualized return is approximately 20%, 30 year is approximately 15% and there is significant net cash flow starting in year 20? Thanks. 

Duke M.

Joe,

Thank you so much for the detailed explanation. If I understand what you are saying correctly, I should 1) only be investing in properties that have a positive CoC return, 2) ones that do not have negative cash flow, 3) should sell that property once my equity in it doubles and 4) use that doubling of equity to purchase new multi family houses 5) keep rolling the equity into new properties.

Sorry for all the questions but I’m just trying to learn as much as I can. I appreciate you taking the time. 

I am new to investing and plan on buying my first residential multi family property late this year. I am 23 and want to build a portfolio using a long term buy and hold strategy. By year 30, the majority of my investment properties will be paid off, I will take equity out of the properties if needed and will pass my portfolio to my future family.

With a long term buy and hold strategy: does having a negative CoC return matter if the 5 year annualized return is approximately 15%, 30 year is approximately 10% and there is significant net cash flow starting in year 20?