All Forum Posts by: Calvin Thomas

Anyone worker with any good property managers in Columbus Ohio? I'm an oos investor looking to build my team. Would love to connect with any recs!

I just found myself in a strange situation and maybe a wonderful opportunity. I am 22 and I have zero experience in owning rental property. I have been saving up money to finally make my first move into real estate, but the thing holding me back at this point is 2 years of w-2 in order to get an FHA loan. I have 20k saved on my own over the course of my life, mostly through random short jobs and never spending money.

Tonight I went to a local real estate meetup and met cool people, talked about a few different things, but when I got home I told my Grandma about how I want to be a landlord, and do a House hack. I told her about how since most of my income until the past few months has been saved through my life with no w-2, I can't start my dreams for another couple years through FHA means. Suddenly she didn't hesitate to say she would loan me 100k, or anything for that matter. I asked what rate and she just threw out 5%, with a balloon on the end for the full loan, but really she said "whatever would make it a great deal for you" (I don't want to just take advantage either, but a good deal is a good deal. She said she doesn't care to make lots of money anyway and its just sitting there.)

I thought It would be sweet to do a BRRRR on a 100k property and pay the 5% a month plus the balloon back in full in that two year window, but I was like there's no way I can even find a 1 bed 1 bath HOUSE for 100k in my area, and looking on Zillow/realtor I was right. They are only mobile homes on rented land, and I don't think I want to get into all of that mess, especially with a BRRRR and as my first deal. It scares me.

Anyways, my main questions are based upon a hypothetical. I believe I can find some pretty nice multifamily units in my area for 350-500k. Is it possible for me to do something like take a 20-30k loan (at 5% interest) from my grandma combined with my own 20k in savings (40-50k total) to use for an FHA down payment, closing costs, and needed repairs plus have cash in reserves? How would a bank (or wherever I get an FHA loan from) react to this? Remember I still don't have 2 years of w-2 but does having her cover the costs make a difference?

For extra details: Her loan would probably end up being a 5% interest rate for 2 or 3 years and a 20-30k balloon at the end of the 2 or 3 years. She really is letting me set the terms if I do this, and if I take a 30k or even 20k loan from her it could potentially only add 100-180$ to my monthly costs each month for running the property. I could easily work my w-2 jobs over a couple years and save that 20-30k to pay the balloon back. My savings rate is about $2200-2500 a month, and I also think with a solid deal on something from a tri to a five plex, maybe I could get decent cashflow to help me even more prepare for that balloon, heck even pay the balloon a year early if the terms allowed it in our contract.

Please respond with any additional questions if you need them to help answer mine. I hope this made sense to read. My apologies for any confusion.

You are correct Drew.

I am curious if anyone has suggestions. I am an agent with Keller Williams, they do not allow property management. I am sitting for my broker license but I don't plan on leaving KW.

I have wanted to start a PM company for a while. What are some ways I can navigate this situation with keeping my position at KW and starting a management company?

My recommendation: I would not take a loan at 9.8% to purchase another rental property. you could get a DSCR loan for 2% less but will need 25% down payment

I have a friend who owns a few rooming houses and occasionally has a tenant lose their key and lock themselves out. He self manages, so he usually ends up delivering a spare key which is a huge time suck. How do other property owners or managers handle these situations? 

I'll play on this a bit. Do you have the income to cover the HELOC payment if the deal doesn't work out? Or in the interim while you are making the deal work out? Or, do you need the deal to work out well to have the funds to cover the cost of the HELOC? If you can't cashflow the HELOC and don't have the reserves necessary to weather a bit of a storm, this advice should be listened to. I assume, since you are looking to get a HELOC to cover the investment in some way(s), you might be in a tight spot with cash flow and/or cash reserves. Proceed with caution if that is the case.

My wife and I used a HELOC to cover the down payment on a SFH and two BRRRR properties. None of them went perfectly and according to the original plan. Make sure you have the funds to survive when things don't go as planned.

 I am paying utilities. I did my math based on the average electric bill of $50-100, not the $500/mo. Had no idea it's even possible :(

I just received a quote for $149,000 of equity at a 9.8% rate in order to purchase another rental property. Is this a high rate? Does is still beat "not paying taxes on your equity by selling"? And is there more competitive rates with other companies that you guys may know of that I don't. Please reach out to me, thanks.

Hi BP fam,

Please let me know your thoughts on the following situation: i have one of the units rented by the room to 2 tenants, and the electric bills quadrupled compared to when i lived there. Turned out, one of the tenants started charging his Tesla from the dryer outlet. When i found out, we agreed that he pays $50 extra each month, that was in the summer. Last couple of months he stopped paying that $50, and the bill continued to climb, up to $500 lat month (property is in Mass). I can't figure out why it's so enormous as both tenants are rarely home, and i have tried to pop in to see if the appliances are left on, nothing..  So i clearly told him to stop charging his Tesla, as that's the only thing i can think of that drives up the bill. Last night the other tenant texted me a picture of the Tesla still being charged.

The lease does not say anything about electric vehicles, but has a clause about "wasting utilities". The heat is gas, so separate. The tesla tenant has not responded to my messages and i am guessing he's going to continue to charge his car, because it's "very convenient" for him (his words), otherwise he is a good tenant. Any advice on how you'd address it? 

Thank you!

Natalia

This is the story of how we – a family of seven on a single income – house-hacked our way from $0 to $3 million in real estate in less than 10 years, and how just three properties bring in $275k/year in gross rental income.

In 2015, at age 25, after renting ($500/month) a bedroom at my parents’ house for two years, my wife and I closed on our first real estate purchase: a four-family in Garfield, NJ (12 bed / 4 bath) for $430,000.

That one decision changed everything.

The purchase allowed us to live for free—and gave my wife the financial freedom to leave her teaching job and stay home with our then 6-month-old son.

Two years later, in 2017, we did a cash-out refi and bought a three-family in North Arlington, NJ—FSBO for $350,000 off Craigslist.

Two years after that, in 2019, we used a HELOC from the North Arlington property to buy a four-family in Lyndhurst, NJ for $620,000.

We’ve renovated nearly every unit in those three properties ourselves. So when Elon and Trump offered a federal employee buyout, I knew it was time. I walked away from a 13-year government career that had taken me from $50K to $147K.

Here's the kicker: these three properties generate a combined $120,000 in net income. We're incredibly frugal, so that's more than enough to achieve our financial independence.

Now, we're a stay-at-home family, planning to worldschool our five children. Leaving my career was a huge decision, but the freedom is indescribable.

I've only had the golden hand-cuffs off for a month, but it is truly liberating... I've taught my 5-year-old daughter to ski and my 3-year-old son to ride a bike. I'm finally able to pursue my passions, and every day feels like a breath of fresh air.

My hope is that our story inspires you to save strategically, invest consistently, and prioritize buying your freedom. It's possible—even with a big family!