All Forum Posts by: Daniel Porter

here are the numbers for another property i've got under contract. a 5/1.1

$120k. $24k down. $5k~closing costs. $1k minor stuff. 

Rent about $1300 on the low side. 

mortgage: $950 
Cap/Op Ex: $240. 
Management: $150 (not while i'm living here, but in the future) 

$1340 expenses, $1300 cash flow, it costs me $40/mo to live there. Compared to my situation now ($520/mo) i'd have close to another $500/mo in my pocket/bank. 

 

@Lien Vuong @Jay Hinrichs thank you guys! 

in terms of the asset itself, it would be about a 10.5x cap, and the gross operating income (excluding financing/expenses/whatnot) would come out to about a 45% CoC return. it's just that all that return will be going into the mortgage. Which ya, is a perk, because i'm building my equity with other people's money, but at the same time, it'd be nice to be cashflowing right out the gate. ha. even if it's just $100.

Hey BP fam!!

Got a counter offer on a property today and it would be my first deal. Here’s the details.

$120k

$24k down

$5k~ closing costs.

I can rent out the other 4 rooms for about $350-$400 each. So about $1400 in income.

In a C+ neighborhood.

The problem is, i can only qualify for a non-qualified mortgage. So my interest rate on a 30y fixed will be 7.8%, and my monthly PITI will be around $950. $200/mo will be going to taxes (Dallas area).

So as you can see, that only leaves about $400 for CapEx, OpEx and Vacancies.

Right now my rent is about $520/mo with utilities. So my monthly cashflow will still be changing pretty drastically even if I am paying $100-$200 out of pocket per month.

Other things:

I’ll probably put any extra cashflow per month towards the principal, since I can still live off my earnings.

I’ll be refinancing as soon as I can, probably within 24mo, or however long it takes to show border income on your tax return.

Okay, so any thoughts? I’m definitely panicking a bit as I’m about to jump into my first deal head first, but am I missing anything major? Any neighborhood things I should be analyzing? Anything else?

Thanks in advance!! Excited to get this one in the bag!!!

-dan

Hi y’all. I’m trying to buy my first home in south Dallas. This will be for a house hack and to start building equity every month. I’m not a traditional earner, I’m a self-employed musician, and in order for me to get a conventional mortgage, I’d have to pay about 40% in taxes each year. And then wait another two years until I could qualify, which puts me just shy of 30y old.

So I went the non-qualified route. I’m currently approved for a loan, but the problem is that it’s 8.5%. Now, I get I can refi our later on, but part of me thinks I’m going to have just as hard of a time trying to refi out later on.

So here’s the rest of the deal.

I’m currently spending $525~/mo in rent and utilities in south Dallas.

I’m looking to buy a home around $125k, with 20% down, and house hack it.

There is a 3/2 house that I could rent two rooms for about $800 total. My PITI would come to about $800 though, and of course, op ex/cap ex would be coming out of pocket. The house is recently renovated, and shouldn't be having any major issues for a while at least.

Is that better in the long run? Or should I try to qualify for a better loan? Or do a BRRR on a different house and try to then refi into the 8.5% loan I'm qualified for? I'm feeling myself starting to get analysis paralysis here, and definitely am afraid of getting hosed, and i don't really have any experience investors to talk to.Any advice would be much appreciated!

-dan

appreciate the responses yall! thanks. this was a REO, and i didn't think of mentioning that, because i didn't think it would matter, but now that makes a lot of sense. Thanks @Mike Cumbie!

@Mitchell Benson ya i'm trying to do that with this post. haha. if you know of anyone, feel free to send them my way! 

@Mike Burkett i'll message you the financial details. 

@Jason D. haha duly noted. 

oh i don't have a deal yet, i'm just looking for a pre approval, so i don't have to scramble for financing when i get something under contract. 

they're turning me down because of low AGI/DTI, instead of lending on a 1.25-1.5 DSCR asset with 9-12mo of reserves, and a 720+ credit score. also, due to differing regulations on boarder income and primary residence/"house hacking" investments, as well as first time buyers.

i've got a lot of things going against me really. haha. but i'm pressing through, little by little. appreciate the concern though, and i'd love to send you the deal details once i have them, if youd be willing to lend your expertise. 

Has anybody dealt with    Z e u s  lending out of Houston? they just pre-approved me over the phone, which already has me skeptical, considering theyre the 6th or so private/hard lender i've talked to, the rest having turned me down. granted, i only am asking for pre-approval for an $80k purchase price, and they said they can approve me for the hard money short term loan, and then once a house is under contract and meets their purchase criteria, they can simultaneously approve me for a long term loan. 

i checked online and their reviews are pretty abysmal, but also, there are only a handful per year, and Yelp Syndrome is a thing: the majority of time no one will give a positive review when things go well, but if things go bad, people tend to leave scathing, emotional reviews. haha. which kind of seems to be the case. 

also, assuming they did even a hundred loans last year, or less than 10/mo, thats a 4% negative outcome. not a bad risk...

what they're accusing z e u s of though (excessive undisclosed fees, mean/hateful management, etc) is pretty serious, and it would certainly defer from working with them if it was true. 

any help would be much appreciated. 

all the best, 

dan