All Forum Posts by: Danielle Wolter

For a real pre-approval, the lender will have to do a hard credit pull and actually determine how much you will be qualified for given your income, credit score, etc. etc.. A letter like you have sound more like a pre-qualification, which doesn't mean a whole lot except the lender thinks based on the information you gave him, and without pulling your credit, that you can afford $xxx.

@Nando Gapasin I don't see utilities on here at all - are tenants paying all utilities? I would guess you'll probably need to spend a little more than $1500 for an 8 unit property even if it is "well maintained." Also, it looks like you're only planning on putting 10% down and this seems low. Because it's more than 4 units, this will be a commercial loan, and I think you'll have trouble getting that low interest rate and 10% down on a commercial loan.

Hi @Account Closed. There will likely be a lot of differing opinions on this. But I'll give you mine. I ALWAYS have at least 6 months of living expenses in cash reserves (this is the only liquid cash I keep for any period of time). This includes the mortgage on my personal home as well as the ability to pay the mortgage on one of my rental properties (I only own 2 right now in CA). If both my properties went vacant, I'd be down to only 3-4 months of living expenses. I also have retirements funds to access if the s*** hits the fan. I'm pretty highly leveraged (CA properties are expensive), but feel comfortable with the cash reserves. This is what helps me sleep at night. 

Awesome job on that CA property! This is a great place to learn even more. Good luck!

Congrats! That is awesome - great job. Good luck on the next!

@Zachary Blomberg From my understanding (I'm sure someone will correct me if I'm wrong), the lender will use an appraisal to calculate the HELOC. So yes, IF the market corrects and your home value goes down, you will be able to pull out less equity.

@Nailah Williams $350 seems incredibly high for a townhouse. Just remember with HOAs, they can always raise the fees and you have little to no say. I have a couple condos and if I could go back I'd never buy something with an HOA again. Fess have increased almost every year on one of them. Just something to consider if your margins are already thin.

@Kolby Wright I would add in 5-10% or CapEx. You will also need to add property management unless you plan to manage it yourself. You may have already done this, but I would definitely talk to a lender. You may have trouble getting a lender to lend on a $30K house. $30K is also very cheap for a house - if it's in a rough area, I would definitely factor in a higher amount for vacancy and you'll want to know that deals in rough areas look great on paper, but may not be so good. Just know your market.

@Steven Hamilton II Thanks for your input!

@Vickie A. I would add more for vacancy. I always assume my property will be vacant at least one month out of each year to be safe. And I also don't see anything for CapEx - I typically use 5-10%, depending on the property and how much it has been updated.