All Forum Posts by: David W.

Thank you so much for your detailed response. I have to say that it is very confusing to do the calculations  this vs that. Especially the one that confuses me the most is the difference between buying one large property vs 5 smaller priced property. And the one that gets me the most is cash flow va appreciation. Cash flow is great but the stories I have heard are people making their real money is with appreciation. 

Hello! 

So my goal is to purchase an investment property (either can use as my primary residence or investment property) and have been looking from SFR up to multi-units under $800k, but every time I calculate higher rates with doc loans 6%+, which doesn't make financial sense as the rate squashes any profit margin.

I called around to different loan officers I found online but am left relatively confused on which way to proceed. Was wondering if anyone can point me in the right direction on which would be the best type of loan? 

Single
Owner of 1 single family residence $750k and owe $500k
Have $130k liquid
FICO 790
No debt, no loans, own car, credit cards at zero
Self-employed and business grosses $230k but I write off everything so show about $60k net

Looking at properties in Los Angeles, Memphis, and Columbus. 

The last question is, is it better to buy smaller value properties rather than 1 property?

Thank you. The thought of having a house I can tweak and improve just doors down from my other house is comforting as I am hands on. The goal to purchase is to grow my doors and of course wealth. If I can get a lower mortgage rate it can change the game and I can positive cash flow so that is what I am working on. Just not sure of the numbers and comparing. How do you decide your course of path? Is appreciation (speculation) in Los Angles when everything just seems to grow and recover no matter what happens?

Hello! 

So how can I understand the numbers better or what does everyone do to make sure you are making the best decision? My scenario is I am putting in an offer for the following but not sure if I will have greater potential buying smaller cash flow properties. 

Putting in an offer for a single family residence 4 bed, 3 bath, 1954 sqft, 8000 sqft lot, just down the street from my house for $610,000 with a full doc loan at about 6-7% 30 fixed (so lets do 6.5%) 20% down. Property tax is 1.25% and homeowners is about $100 per month. Will need about $30,000 in fixes and my goal is to rent out all 4 rooms to roommates and live just down the block at my house which I am already doing the same successfully. 

$900 x 4 = $3600 in rent. 

PMI is $3820 so I am paying in about $300 a month out of pocket in this scenario but can ride appreciation in future as the house will appreciate on average 5% per year historically in the area

So how do I use this scenario to match up against buying cash producing no appreciating properties such as a 2plex that can be bought for $77,000 and rented out at $600 per unit etc

I'm just getting lost with numbers and fearful of not making the "wise decision"

 Where do you recommend? I keep hearing Memphis is a great cash flow

 ok I agree and I select Memphis as my out of state. Done now I drop other city options and focus on that one like you said. I live in Los Angeles so I must be suffering from the "there must be something bigger and better around the corner-itis" 

 Thanks for the shake and yes analysis paralysis is on the nose. I am going to try to dumb it down a little and stick with the basics. I appreciate it. 

Trust is a tough word for business. I'd say I don't have enough experience to know if this is a situation that would be favoring him and his client (which could be his friend). 

Ok I will discuss with him thank you!

Trust is a tough word for business. I'd say I don't have enough experience to know if this is a situation that would be favoring him and his client (which could be his buddy who knows).  

yes understand but I already have a relationship with the listing agent as my buyers agent. So it is recommended to tell him that I don't feel comfortable him as my agent with him as the listing agent?