All Forum Posts by: Darius Wade
Darius Wade has started 3 posts and replied 47 times.
Post: What should I do ( FIRST POST)
- Investor
- Dover, DE
- Posts 50
- Votes 27
Quote from @Bryan Nwokem:
Quote from @Bob S.:
Quote from @Bryan Nwokem:
Hey Y'all, I had a question on mind. So i found a home, its listed above $400,000 Duplex in the Sunny side Place area, if you are from houston you know gentrification is happening around this are. The home has been on market for a few months, almost a year. I want to offer in the ball park of $370,00o to test waters have them meet me in the middle around 390,000 with a fixed rate 30 year 6.75%. The Mortgage would be around $3587/ month including insurance, taxes, Mortage insurance. Its a 2 unit , 3 bed 2 bath build in both units.
I am a bit worried about the investment as it is my first property any advice?
Whats the question? We have no idea if this is a good deal or not. What will the rent be? Also, you are offering way too much, not sold for a year, ok it has issues. You should not offer anything you are not ready. Show it to someone doing deals, let them look at it. Its obviously not a good deal as its not sold. What do the comps look like? KNOW YOUR NUMBERS, that's all that matters,
Good luck
With market rents at $1,650, the deal would not make since. Going into the deal you are already expecting to lose money. The other issue is that as a new build you are already at the full value of the home meaning there is no room for forced appreciation. I would suggest passing on this one and looking for one that has a better cap rate and can be forcibly appreciated through renovations. Hope this helps and best of luck to you happy you're getting into the real estate game.
Yes, this is something that you could do. Since you already own the SFR you can simply change the insurance policy to cover yourself with tenants in the home and then on the new property utilize an FHA to house hack. This is a good way to begin acquiring more properties since after each year you could rinse and repeat. You just need to make sure the numbers make sense, and it will cash flow because you do not want to over leverage yourself.
Post: Ready to purchase first investment property, but not sure which
- Investor
- Dover, DE
- Posts 50
- Votes 27
Having a VA loan will be a big win but as Hamp mentioned you want to know your exit strategy so if the current Multi Family market is not good SFH's are always a quality option and understanding the areas and the appreciating neighborhoods you can put yourself in a quality position.
In terms of quality of the house definitely play it a bit safe to start especially since you will need to live in the property. So, either an already done home that will rent well or a home with some small cosmetic work giving a bump to the value but won't require a second loan or a long and heavy rehab.
Post: First time investor in need of funding advice
- Investor
- Dover, DE
- Posts 50
- Votes 27
Quote from @Abel Casillas:
Quote from @Nathan Gesner:
Seller financing, partner with a friend or family member, meet someone at a networking event to partner with, use a hard money loan, sell your kidneys, rob a bank, etc.
I'm not a fan of 100% funding. If you don't have the financial discipline to hustle, save, and invest from a position of strength, then you should partner with someone who does. Very few people build true wealth through shortcuts touted by the gurus of "no money down" investing.
I agree with you "Very few people build true wealth through shortcuts touted by the gurus of "no money down" investing" I just think if I wait a couple of years to save, I would be missing out on the current market. By getting a few projects under my belt I can be able to get a lower DP and interest rate with my hard money lender.
Could be a nice tax write off for the time being until I pay off the principle enough to cash flow.
I am a new investor as well and I too feel your anxiousness to get started now. Real Estate is exciting and the prospect of getting started with your first property exhilarating but you do not want to force a deal. The market will always eb and flow overtime so the market may be hot now but that does not mean after saving up over a year or two that it still won't be. Not to mention you are in a unique position because you intend to invest out of state meaning that you can tap into any hot market throughout the country. So, I would say continue to learn and save your money. However, after further analysis if you determine this deal is a deal then weigh the creative financing options that are available out there but still remember they're not a guarantee so the seller financing could not be offered eliminating you from the deal, but of course it won't hurt to try but just remember that is a possibility.
Post: Could use some House Hacking tips for a new real estate investor.
- Investor
- Dover, DE
- Posts 50
- Votes 27
Quote from @Nate Sanow:
Long term, is it wise to aggressively pay off? Sure, kinda, sorta, and if you can… short term, would I worry about it? Probably not. I would worry about making sure I saved the difference between what my old monthly expenses were and my new house hack expenses that should be a lot lower.
The reason I say this is because you want to at some point transition your mindset to your money and investments working for you. Using extra money from income to reduce a mortgage is a really good mindset of the people who plan to be employees for a long time and obtain 1-2 properties or so based strictly off of income and what they can afford.
The REI who aspires to reach a portfolio and financial independence and let's say 10-20 doors or 100 doors or whatever the bigger than you number is, needs to get their mindset wrapped around finding other peoples money, and getting someone else to pay that money off.
By moving out in a year, I’m just guessing but odds are that you’ll be able to make even more than that $350 owed to lender amount. In so doing, your tenant can pay you the extra money to pay off your lender. At this point you’ve hopefully built up reserves, and, are in a place to rinse and repeat and acquire another property all while yes reducing what is owed to the lender… but not strictly from your labor / income.
I’m rooting for ya. Best wishes to your success
Wow thank you so much for that. I do agree that it is challenging at first adapting the mindset to that of a REI and working with the end goal in mind. I will continue to work through this in order to grow my wealth and my portfolio, thank you again and hope all is well on your end.
Post: Could use some House Hacking tips for a new real estate investor.
- Investor
- Dover, DE
- Posts 50
- Votes 27
Quote from @Jevon Shaw:
It depends on what you want real estate to do for you, and how quickly. Keep in mind, the only thing that allows anyone to leave their job is high enough cashflow, whether that be via rentals, flips, or whatever. If you'd like to eventually do this, the right answer may be to pay down the loan up to 20% equity.
For what it's worth, I was in a similar situation, and I chose to pay down the loan up to a certain point. I ended up living off of part cashflow from the house hack and part savings for about 6 months to learn to code full-time. Needless to say, this led to much more lucrative career opportunities. No regrets about it. Hope this helps!
Post: Could use some House Hacking tips for a new real estate investor.
- Investor
- Dover, DE
- Posts 50
- Votes 27
I am currently in the process of acquiring my first buy and hold multifamily property. My cash on hand is not enough to pay the 20% down payment for a loan so I have opted to put 5% down with a conventional loan. I chose this financing strategy instead of an FHA because I do not want to have mortgage insurance for the life of the loan. This will of course be my primary residence because it is not qualified as an "investment" property yet. So, with only one tenant in place, I would still owe around $350 a month for the duplex. So, with that being said would it be smart to aggressively pay down the mortgage while house hacking? My rational for doing so is to build up to that 20% equity in the home so that when I move out and put a tenant in my unit my margins can be increased. This is because at 20% equity my mortgage insurance will roll off the loan lowering my monthly payment by about $150 a month increasing my cash flow but lowering my COC return because more money is being put into the deal. Is this an ok option to take or should I just continue to save in order to get into another deal?