All Forum Posts by: Nathan Richmond

First of all, congrats on getting yourself in position to purchase property. I've done two of the three things you mentioned in your question and am about to do the third. I originally rented out a room in my house. This obviously helped with the mortgage, but the renter basically took over the guest bath. He also destroyed it and the bedroom. So I got to repaint and re carpet the bedroom along with replace the fixtures in the bathroom. So you have to know your tolerance of living with others. Second, I have since turned that house into a rental. I also bought another house and turned that into a rental. Both renters have been excellent so far. The second house has a positive cash flow of about $400. Finally, like you, I'm in the market to purchase a multi-family property with an FHA loan. I believe the multiunit property will be more labor intensive, especially since I'll be living there, but I also expect to have a better cash flow. By the way, I live in the Central Valley in California. One final thought, a SFR will appreciate faster than a multiunit. So you would also want to consider your exit strategy. I bought the second SFR with an FHA loan and in the year since I bought it, it has appreciated enough to have 20% equity in it. So just this past week I was able to refinance to a conventional loan, therefore allowing me to qualify for another FHA loan. I don't think I'll be able to do that again in the near future if I do end up getting a multiunit property......unless I can find an amazing deal!

Thank you for the question and the answer. This is exactly what I plan on doing in the next month or so. Please update us with any new findings you come across during this process.

I'm in a fairly similar boat. I have two houses that are both rentals, and I currently rent myself. I bought the 2nd one with an FHA loan. I lived in it for a year while updating it. I moved out and found a renter in September of last year. This past week I was able to refinance into a conventional loan (the house has appreciated enough in the year I have owned it to get 20% equity!!!). Now, once it has been rented for 6 months, if I'm correct, I'll be able to show 75% of the rent as income, therefore taking the mortgage off of my debt to income ratio and allowing me to qualify to purchase again. I'm really looking at purchasing a 4plex with an FHA loan. I'll live in one unit and rent out the other three......hopefully. At least that's he plan for this middle school math teacher. :-)

@Nicole A. 

I'm not sure you are understanding what everyone is saying regarding the water from your roof going onto your neighbors. Yes, you have a gutter. But where does that gutter lead? Based on all three pictures, it looks like the gutter ends at your roof line, while your neighbors roof extends out towards the street another few feet. This leads me to believe that once the water is collected in the rain gutter, it is then being deposited on your neighbors roof, near the corner, so it can then go down his gutter.

I could be wrong with your understanding, but I think that is leading to some of your frustration with the points a few of the posters have made. 

I sure glad someone asked this. It seems like every property I look at misses this 2% guideline. Now I know it's been said that this is simply a starting point, but everything I look at is much closer to 1%.

Very helpful guys. Thank you for all of the insight. I'm continually surprised how willing people are to help here. It's amazing to me. You just don't find that anymore.......ANY WHERE! 

Does anyone have experience with purchasing mobile homes and using them as rentals? Do they make good rentals? Is the maintenance more, less, or the same?

Thank you everyone for the continued support and advice. It's very much appreciated.

Thank you Christopher and Gerald. 

When you receive a good answer, please pass it on. I'm in the same boat as you.