All Forum Posts by: Dan Portka

@Jonathan Cisneros you have any reserves saved aside from the $15K? You might not want to touch that money in case a repair or vacancy comes up. 

Since you're low on cash, you may want to consider a more active approach like flipping as you mentioned to build up money for a down payment on your next rental. HM loans will require you to have some skin in the game so you'll need to bring some of your own capital to the table and also have enough in reserves to cover the monthly expenses.

You may be able to find a partner with some cash to cover either a down payment on a rental or the down payment on a HM Loan for a flip.. but that partner will want to see your track record/experience as well as the details on how you intend to make a profit. 

Pretty general response to your questions.. feel free to reach out any time if you'd like to discuss anything further.

Hi @Gabriel, assuming you qualify you can typically get pre-approved within a couple of days. Your residency/immigration status may create some challenges, but as long as you can show proof of down payment, 2 years income, and credit history you should be able to get approved. I'd recommend reaching out to a couple lenders ASAP to see what they tell you. I'd be happy to provide some recommendations. Also keep in mind that once you find a place and your offer is accepted it can take up to 2 months to close before you can move in.

@Stephen Fujiwara been in the South Bay my entire life. Happy to chat any time, let me know how I can help!

hey @Lisa Talbot welcome to BP! One important thing I think people should consider when selecting an out of state market is - where do you have an advantage? Do you know anyone in any of these markets (ie potential business partner or boots on the ground)? Do you personally know any of these markets? Having people you can trust and understanding the lay of the land and various neighborhoods is important when investing out of state. Start building relationships/networking with agents, PMs, and investors in a few of those markets to build your team and once you start seeing deals come across your desk pick the market that has what you're looking for.

@Kevin We'd need a bit more info to fully understand the deal. I'm not too familiar with NAF cash, but it sounds like you were going in very aggressive (~10% over asking and paying extra to finance an all cash offer) - I'm wondering what area in LA is still seeing that amount of competition where this is required? Happy to jump on a call to discuss further, feel free to reach out.

I have to agree that there is additional risk in purchasing outside of your local market. Sure some risk is mitigated if you have a great team, but finding a great team is not always easy. It takes awhile to build trust and you dont really know how your team will be until you actually work with them. At least if you're able to drive to the property in person you're not relying on others to do the due diligence for you.

@Nathaniel K. Its quite an easy process to purchase out of state, work with a good agent and they'll do most of the leg work for you. But its difficult to do it well and at scale. In my opinion most new investors underestimate their expenses and overestimate projected rents, hence returns might not be as good as you might initially think. Creative financing (seller financed) is not easy to find and if it is those properties will either sell quicker or for a premium. And I like section 8, but the rules and housing authority are different in every market, so make sure to talk to PMs and investors wherever you're looking for specific things to be aware of.

@Kevin Thomas with FHA you can put down as little as 3.5% down on an owner occupied small multi family property. In HCOL areas, 3 or 4 unit isn't really an option because of FHA's self-sufficiency test (google it if you need more info). That leaves you with single family or duplex. I think you already understand why a duplex is a better investment - your tenant pays some of your mortgage payment while you get all the other benefits of owning investment real estate (appreciation, loan paydown, tax benefits).

You're correct in option 1 after just a couple years if you want to move out you probably won't be cash flow positive. If you're not okay with that you're left to either sell or live their for longer. If you're considering buying a SFH fixer, what makes you more nervous about buying a duplex fixer? If you do somewhat of a combined strategy between your options 1 and 2 you'll buy a fixer duplex and force some appreciation/higher rents by rehabbing and you'll likely be in a better situation after a few years than if you just bought a turnkey duplex.

@Kevin Thomas 

I think you need to ask yourself what your goals are - personal, professional, financial, etc... Maybe that will help you figure out where you want to live for the next few years. Its great you're being strategic and I agree buying a duplex is a great strategy.

You can still find a duplex for $875K in some cities that are closer to the coast, but unsure if you want to live more inland like you mentioned. I'm personally closer to the coast in the south bay, and would be happy to connect and chat more about investing and what your options are.

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