All Forum Posts by: Jacob Lapp

@Jose De La Macorra

That seems like a potentially awesome opportunity!

Like everyone else said make sure the contract puts the responsibility on him to be taking care of taxes and insurance. I would also add into the deal that there is an end point. Me personally I would make it 10 years max. 144k total in an account that isn’t producing anything for you in the mean time. However if he outlives 10 years it will put you in a ****** situation. Could you kick a sick 80 year old man out? As morbid as it sounds, he could live until 100 and put you in a really bad position. Just my 2 cents I’m honestly not sure what I would do.

Good luck!

@Emily Kaye

My mom is in an almost identical financial situation to you. I started my search for her through the requirements for USDA Loans. They are a great tool when you are a first time home buyer look on google for the eligibility map. I’m less than an hour from Philly and it is considered rural and eligible. But this loan means 0 down! So you would just need to come up with closing costs. But you can add on the PAHFA which is an interest free loan that can be taken out to assist with the down payment up to 6k. That way you can invest your money furnishing (dont buy anything new, facebook marketplace all day)

The only downside is the USDA Loan can't be used with a multifamily house. So for us we are probably going with FHA plus the PAHFA for a multifamily where she can live for free. It will probably require more than 10k and I will be helping her with that.

For you, with your experience with Airbnb I would consider the USDA Loan with the PAHFA for a single house. Get as many bedrooms as you can for the least amount of money claim residency for a year and airbnb the other rooms!

It might be harder in the “rural” areas to be constantly booked with airbnb but you wont have the same 50% occupancy requirements like philly.

Hopefully this helps! And good luck!

Hey Everyone,

This is a long one but I have some exciting news so bear with me!

I am 24 with 2 multifamily deals under my belt (5-units total) and am itching for the next one. I got my real estate license and bought my first property at 22. I started a painting business in school which gave me the capital to start out. I still work full-time in the oil and gas industry. But realistically see the ability to “retire” or not need to rely on a paycheck within the next few years.

Growing up poor I didn’t know anything about finances. I thought living paycheck to paycheck until you are 65 was how this life thing worked. But through countless hours of audiobooks, podcasts and this community here I have been able to completely change the direction of my life for the better.

I’m the farthest thing from an expert and would still consider myself to be a newbie. However, as a young person I’ve been able to change my perspective on finances and match my lifestyle accordingly. Whether by living way below my means, creating a gap between what everyone else is doing and what is responsible, to saving costs as a new landlord by doing everything myself and much more. I feel obligated to share the little bit of knowledge I have with everyone I can, who may have never thought this path to be possible.

Through the “Young Slumlord Podcast” (by listening to the show or by knowing me or my cohost Caleb you will find out we are the farthest thing from Slumlords) but the name is aimed to serve as a little provocative. And I believe will get more attention from the demographic I am aiming to reach (highschool, and college kids) instead of the alternative “Building Wealth Through Real Estate”. By being authentic, talking how we talk without the restraint of being politically correct all the time. I think we can appeal to a larger audience then what is currently available.

Our podcast is focused towards the people like us just starting out and are willing to do whatever is necessary, through a side business, constant learning, to working 100+ hours a week all in order to achieve the attainable financial freedom Real Estate has to offer.

We just finished recording episode number 1 where we introduce ourselves, break down our first deals and the goals we have in life and for the podcast. I have met some people along the way who I think will make good guests but I am reaching out here to hopefully find some like minded people who support the mission and might be able to come talk on our show at some point.

We will be dropping the first episode in the next week or so on apple podcasts, spotify, google podcasts and youtube.

@Justin Rea

Facebook marketplace is a great tool at least in my area where you can find an older working washer/dryer together for $100 most of the time. I have bought 4 sets with this same rule of thumb.

My leases state that for any appliances included normally just fridge, washer, dryer and sometimes window AC if any of them go bad I will come out to take a look and then give them $100 towards the purchase of a new one if it cant be fixed.

This way I know they are out there but puts the ball in their court. I don’t want the hassle of going and finding the deal and picking up and installing so this way they can either find a good deal or buy a brand new one but its up to them.

@Brendan VanDalinda

I have been looking for a friend who is struggling with the same thing. You are able to use an FHA loan if you already have a VA loan. You just need to claim residency for a year. So 3.5% down plus closing cost. That will probably be your cheapest option. If you are struggling with funds for that..

Look into NCHFA I’m not sure your states requirements to be eligible for this but its designed as an interest free loan for part of the down payment. PA is up to 6k of down payment money.

And then if you are still looking for extra income. Consider a low overhead business. I started with gutter cleaning. You can make around $100 per small house and if you only have a few hours a night you can do 2 or 3. All you need is a ladder and they are easy to find for cheap on facebook marketplace. Thats what I did but theres plenty of opportunities to make money on the side if youre handy! Good luck

@Stephanie P.

Thanks for your input!

I finally got my ducks in a row and was ready with a financing option, called the listing agent and it went under contract TODAY!

Definitely learned a lot in the process of figuring out creative finance to make something like this work. But will have to wait for the next place!

Thanks again!

Hey Everyone,

Bear with me this one’s a little complicated...

I’m currently on my second multifamily house hack and things are going great. I’m excited to keep building my portfolio and am getting impatient on waiting the full year to do my next deal.

I found a great property that has been listed 10 times in the last 12 years... (yikes I know)

It’s listed as a quad.

Single family house 3bed/1bath

Single family house 3bed/1bath

4 car garage with apartment on top 3bed/1bath

1 car garage with apartment on top 1bed/1bath

They are all next to each other and being sold together, but have 2 addresses/2 deeds. With that being said my lender told me I would need 2 mortgages.

The list price is 550k

The current rents are 4500 a month (using 1% rule, worth 450k)

If I got average market rent for each unit it would be 5800 a month in rent (using 1% rule, worth 580k)

All that being said I know with the eviction ban some rent is better than no rent. I don’t want to buy it for what it could be worth one day I want the numbers to work now but don’t want to rip off the seller.

I was planning on offering 480k and willing to go to 500k max. (I think thats fair but not the main point of this post)

Now the reason I assume it has not been sold is that it would be classified as a non-conforming property preventing a conventional mortgage.

My second issue, capital. If I were to somehow get approved for a conventional loan or 2 conventional loans at 20% down my down payment plus closing costs would put me around 120k.

I don’t have that in cash I’m comfortable with 35k down keeping a solid reserve.

I was hoping to either get the seller to finance the rest of the down payment 85k or a loan for the 85k.

I broke it down and if we structured it as a 10 year loan with a 7.3% interest rate I would pay $1000 a month on top of the $2600 ($1300 mortgage/insurance/taxes on each loan thats a high estimate) so $3600 total.

At current rent I would be cashflowing roughly $800 a month

At market rent cashflowing roughly 2100 a month

In 10 years at todays current market 3100 cashflow

I’ve spoken with a few different banks and mortgage brokers. The consensus I got was that I could not use borrowed money for my down payment.

The property is held free and clear by what looks like siblings who inherited the property.

My gut tells me to push for seller financing.

If you agree, how would you structure the seller financing for wins on both ends?

Would trying to make these funky bank loans make sense if I couldn’t obtain seller financing?

Would you pull out equity from else where to get this deal done?

Should I give it a rest and wait till my years up to do the next property?

Has anyone done a similar deal and how did it go?

If you’ve read this whole thing you’re a trooper and I appreciate you. I know it’s all over the place and is lacking info. But would appreciate any constructive criticism’s on my thoughts and input on how you might go about this.

Thanks in advance!

@Andrew Stephens

Have you considered getting your real estate license? With that amount of capital you may have a hard time getting your first property. However, making the investment to become licensed, learning that side of the business, potentially using your license to create more wealth and eventually making 2-3% on all the properties you buy in the future.

I got my real estate license at 21 did my first house hack on a triplex at 22, did my second house hack on a duplex at 23. Now I am 24 looking to do my next deal living for free ($1100 a month value) with a passive income of $1800 a month. In the next 2 years I plan on having 6-7 more units and once I move out, have over $5000 in passive income. Best of luck to you!

@Chris Reyes

Replace my salary as a pipeliner by the time I’m 26. To then in turn follow my passion. At this point there are two goals in mind that I’m hoping to do simultaneously. One travel the world and volunteer my time and skills in the construction end in developing countries by building homes or supplying water and infrastructure. Two while in the states start a outdoors leadership retreat and take people on adventures, canoeing, rock climbing, camping, hiking etc for people in the professional world who need to unplug from their phones and practice mindfulness. All without worrying about money and creating generational wealth for my children. Basically I’m hustling now to create a comfortable lifestyle that I’m excited to live.

@Eric Brantley

I've been brain storming on this one and a recent industrial bp podcast talked about seller-financing just part of the down payment. I'm currently looking at a package of 2 duplexes next to eachother with different addresses. Which would require 2 appraisals, 2 loans etc. I could afford an FHA mortgage on the package but not on 1 property with 20% on the other. So what I am going to talk to the seller about is doing 20% down on both putting 30K of my own money in and borrowing 85K and repaying this to him in the course of 10 years. (Cashflow is still good with this additional payment) I'll update in the thread if things move forward