All Forum Posts by: Eric Yu

I am looking to buy my first rental property around June (at the earliest) time frame and was searching for some answers to help me get started. I am looking to get some help and information of how pre-approvals work if I am planning to buy a property that is out-of-state. A quick background about me, I am currently traveling for my job on per diem and will be returning to the Boston area at the end of this year. But with my current career goals I am looking to pursue other opportunities outside the Massachussettes area and maybe live in another state. I do want to get started on purchasing my first home since I believe I have the capital to put down but my issue is where to purchase. I've considered the Philadelphia area, and Northern New Jersey area but more of a investment property and not a house hack. I chose these areas because I have family and friends in the area for any worst-case scenario that happens to the property. I do plan on getting a property manager but that is something I will be planning for after I understand how pre-approvals work. In addition, I do not particularly plan on moving into the Philadelphia or Northern New Jersey area unless there is an opportunity that I like there for my career.

Thank you for the time an help in advance everyone!

I am willing to also talk more about the situation if there are lenders out there willing work with me.

Welcome to the journey! With a pre-approval, a lender will be able to walk you through everything required. Before you're ready for a full pre-approval, what you can do is figure out your debt & your income to get a ballpark price you can buy with.

Example: So let's say you have $500 in debt monthly, and $5000 in income monthly. Your Debt to Income (DTI) is 500/5000, which is 10%. Lenders will allow you up to 50% in some cases, but to be save, I'd use 36% as the number. That means your maximum debt you can have is 36% of your income. In this case, $1,800 (DTI x Income = 36% * $5,000).

You can get $1,800 debt total & you already have $500, so that means you're left with $1,300 that you can use toward purchasing a house.

If you enter that amount on a calculator online, you should be able to figure out your purchase price based on current rates.

Hope that makes sense!

3 Votes

Quote from @Kevin Todhunter:

Hey everyone, this thread is a year old but would love to join some real estate meetups and chat with some like minded people in the area.

Let me know if you are a part of anything that would fit!

Hey Kevin! @Michael Haas and team have a great meetup. I host one of my own with The FI Team Seattle as well: https://www.biggerpockets.com/... Our meetup is focused on House Hackers & Short Term Rental Investors. We have a variety of speakers that come & our next speaker will be talking about multi-family development/construction. You won't want to miss it!

Feel to reach out personally if you have any questions.

2 Votes

Seattle, Washington

Quote from @Terima Nagatani:

Hi Team,

Looking to speak to a few lenders - I'm looking to purchase in the state of Washington (Seattle, Tacoma, West Seattle, Everett, Renton)
I'm a first-time home buyer, looking to purchase a duplex, triplex or quad. Would like to see my options for using an FHA loan vs a Conventional loan (credit score 780+).
I'm a W2 - with a yearly salary of $86k.

Hey Terima! Excited to help you find that property here. I sent you an intro to one of my lenders who has a great 0% down 40-year loan program. It's one of the best 1st time homebuyer programs that I know of.

Cheers!

0 Votes

Quote from @Dennis Nguyen:

I'm mainly invest in Seattle because the appreciation is great. Everyone above is right - you cannot have it all. It is still possible to cashflow or even be neutral if you're willing to go down south a bit. If you were living here for a bit longer I would recommend house-hacking for better returns, But since you're moving down to Vegas soon a house-hack there would be a great strategy as well.

+1 to this. There's some pretty interesting investing opportunities in Seattle with the appreciation, but also construction. There's plenty of developer investment opportunities here. If you're interested in finding any opportunities like that, feel free to shoot me a message.

0 Votes

Seattle, Washington

Quote from @David Reeves:

I have 35k saved up and am wanting to get into the Short Term Rental market. But I feel like I could get more out of my money if I was to take that 35,000 and spend on a small duplex, do the BRRRR method, get the money I put in back out of it (with the refinance) and put it towards a nice STR property in my area. Does this seem like a reasonable plan? I have nobody around me who I can speak too about these things and just wanted some feedback! Thank you!

You could look for BRRRR opportunities to STR as well (e.g. BRRRSTR lol say that one 5 times). Funneling your cash forward with BRRRRs is definitely a great move; if you could find the right property that makes sense as a BRRRR & an STR, then you're golden.

Separately, you might have a better opportunity to partner up with people instead & have your $35k go further.

1 Vote

Ayooo! March meetup coming at you! Speaker TBD. Will update once we have finalized one :)

There will be free food and free drinks! Perfect place to network with new real estate investors, house hackers, and folks who are breaking into the short term rental space!

Agenda for the evening:
5:30-6:30 PM: Grab some food & mingle
6:30-7:15: Presentation TBD
7:15-8:30: Eating, drinking, and networking! And remember, don't forget to follow up after you go home!

You don't need to have any experience with house hacking or real estate investing to come. You can simply just come to have a good time and learn from others. We hope to see you there!

1 Vote

Seattle, Washington

Quote from @Henry T.:

I'm quite shocked (and stunned) when I see how much is taxed on to my guest. Airbnb, for their fee, seems to tack on about 14%, then City of Seattle(lodging tax) tacks on 16%, plus another $4 per night. Then Airbnb sucks another 3% in fees out of my payout. Ouch! Quite the sucker punch to the guest if you ask me. If you're a $100 a night, that's 34% more to the guest, then another 3% sucker charge on your payout. Anyone else have any numbers to share from different cities or states?

Ha aren't these fees crazy? Cities get a lot out of the effort & work that goes into an Airbnb. Some cities provide great resources / support, so those fees make sense to me. Other times, it just feels like a cash grab by the city.

0 Votes

Seattle, Washington

Quote from @Kevin Forsell:

I'm saving now for an investment property, but I live in Jersey City, NJ. Duplexes in the area are minimum 500k, and need a lot of work. Should my first property be a local investment or should I look in a more affordable area?

Context: I'm 33 and make good money at my FT job (Netting around 9,000/mo), and I'm not willing to move away from Jersey City. I currently have about 10k aside for my real estate investment journey. I have a good agent in the area (who also invests) and he suggests I save 50k in order to purchase a property with HFA, house hack, and have some reno budget. I really enjoy my FT job, so I don't mind spending 2+ years to save the 50k and learn more about investing. What are your thoughts?

I think your agent has the right idea in mind. That's what I would also recommend to most of my clients who are just getting started in real estate. A house hack is a great way to build up equity with a lot of leverage. Your net worth return on investment will typically be much higher when house hacking than with other real estate vehicles.

1 Vote

Jersey City, New Jersey

Quote from @Alex Wollin:

Hello! I was fortunate enough to have purchased a property a couple years back and have since pulled a HELOC out to leverage money and buy more property. I currently live in Seattle and have great difficulty finding anything under $800,000. Although there is house hacking and other strategies, my question is - How did you get started in out-of-state investing and what was the result? I appreciate all of your input and help! :)

I technically invested in state first & then moved out of state, but I've also explored investing in other vacation rental markets as well. I think it's really the same process as doing in-state purchases; the only difference is that a lot of the networking is done virtually instead. I prefer to go to in person meetups to understand what different investors are doing in the area, but when that's not possible, I join all the FB groups in an area & reach out to people on BiggerPockets.

It feels daunting because the property is so far away, but if you build up a strong network in an area, it really doesn't seem much different to me than in-state investing. Especially if price points are much cheaper haha

0 Votes

Quote from @Joe Fermin:

evening all. went to speak to a local bank today regarding a potential mortgage on an investment property. we have our primary home and an occupied rental. they said that the minimum down payment for another home would be at least 30%. is that about the typical size of down payment on an investment home? thanks for any info

Where are you trying to purchase a property? There's some lenders / credit unions who can do 10% down investment loans as well. Rare to find a program like that, but I have a lender who can do that in the PNW.

1 Vote

Las Vegas, Nevada

All Forum Posts by: Eric Yu

Eric Yu has started 24 posts and replied 228 times.

Post: Help on information about Pre-Approvals

Post: Seattle Real Estate meet up

Post: In Search of Lender~ Washington State.

Post: First time Investor: Best City/ Market for First Investment Property

Post: 35k to Spend. Need to bounce my idea off of y'all!

Post: March 16th House Hacking / Short Term Rental Meetup

Post: What fees do your guests get hit with? Seattle 30 percent!!!

Post: Start locally in an expensive area or long-distance in an affordable area?

Post: Out-of-state investing for newbies

Post: typical down payment for a mortgage on an investment property