All Forum Posts by: Damian Bialonczyk

@Nicholas Hoffman

I purchased my first property (a duplex), lived in it for 2 years, then moved closer to Boston and started renting again while continuing to own the duplex/invest in areas where real estate is more affordable. For me it boiled down to free cash flow from my W2. Owning a primary residence where I currently live would require a sizeable downpayment and ties up more cash per month in mortgage/tax/expenses than renting. I put the monthly savings towards future investments.

@Jennifer Pauyo

I purchased my second property (a 4-plex) using an FHA and 203k rehab loan. Let me know if you have any specific questions. In my experience the process and disbursement was pretty straight-forward, however be aware that the lender usually appoints a loan consultant who is responsible for distributing rehab payments to contractor. I had originally thought that I was going to just receive a check for the total estimated rehab costs (similar to what an insurance company may do) and that I was personally responsible for paying the contractor, but that wasn't the case. Since there is a middle-man who is responsible for disbursement it makes it a bit more difficult to negotiate pricing with the contractor. Also be aware that HUD will want to conduct a final inspection of the rehab before providing the final loan disbursement.

@Timothy Howdeshell

Congratulations, and thanks for sharing! Curious if you plan on continuing this strategy of out-of-state purchasing, or not worth the hassle?

@Zachary Goldman

FHA loans are a good resource to consider so long as the property in question can still cash flow positive after accounting for mortgage, PMI, insurance, tax, expenses, etc... I would definitely recommend checking out The Book on Rental Property Investing by @Brandon Turner or some of the calculators available through BP to help you estimate cash flow. 

As you've mentioned, FHA does require a separate inspection and appraisal prior to loan approval, however this is not a tedious/lengthy process and in my experience only turns off sellers if the property is in disrepair.

@Jose Cueto

Consider teaming up with an investor who could put up disproportionately more cash in exchange for you managing the property/tenants. You could also see if the seller might be willing to hold the note on the mortgage (ie seller financing).

@Thomas Fryer

A multifamily investment property would be a good way to earn additional rental income compared to a single family. If you're concerned with tenant management, consider starting with a duplex instead of a 3- or 4-family. I'd recommend checking out some of the books offered in the Biggerpockets bookstore for specific single family vs. multifamily investment strategies.

@Ryan Wittig

Congrats on the sale, nice to hear about a local investor's success!

@Nathan Doherty - congrats on the first investment property! If I were in your situation I would consider paying down the current mortgage to get some more equity/leverage in your property. If you're not occupying all of the bedrooms maybe you could even rent one out for additional income. Once you have some more equity you could refinance and use the cash to purchase your next rental property.

@Angel Craig

You've got the correct initial strategy - the most cost-effective approach would be to secure a low down-payment loan (e.g. FHA loan) and "house hack" for a year and eventually rent the property out. You could also consider purchasing a multifamily home with an FHA loan but will likely need more than $4k down-payment depending on the real estate prices in your area. I recommend checking out some of the BiggerPockets-sponsored books in the forum bookstore.

I agree with @Gian Cunanan's recommendation to meet with a mortgage broker! S/he will be able to shop multiple lenders for you to see what your options are at your current situation.