All Forum Posts by: Jim D.

Great job getting started early and being frugal! 

Your question is really a simple math problem. Sit down with a lender and explain your plan. If you give them your monthly income, a good loan officer can pretty quickly calculate what your future DTI will be after you buy 1, 2, 3, 4 etc rentals. Just a matter of sitting down and doing the math.

Also, what do you mean when you say you won't have W2 and rental proof when the time comes to buy your own home?

Looks like a kiddie-coaster at best. 

That bumping up and down within a 2% range is probably just noise; the only trend I can see in the graph for San Antonio is that vacancy went up a few percent in the recession and has been steady since then. Run your numbers to see if you could withstand 11% vacancy for a few years in a recession, but expect 7% or so in a healthier market.

If your properties have fixed rates, you're in an area with steady rental demand, and you're cash flowing, I don't find there is much to fear about a downturn if you're doing buy and hold. You just keep the machine running and ride through it. 

The only time the property's value matters is when you sell.

That seems really high to me; on all the quads I've done the highest appraisal cost was $550.

I would definitely charge them for the deductible if the damage was caused by their negligence (assuming your lease says they're responsible for damages they cause). 

The two times I have had a tenant who's a pain and isn't happy with the space or is being difficult for whatever reason, I have asked them if they'd like to end the lease early. Both of them accepted the offer, and we were both happier for it. If it's not too hard to find a replacement tenant, I'd just move on from them. The most difficult 20% of tenants cause 80% of the headaches.

People love talking about themselves, and talking about things they are good at. If you ask someone how they accomplished something cool (like how they built their portfolio, what their best property cash flows, etc.), you'll usually have a hard time getting them to stop talking!

Easy solution: increase your purchase price by $5,000, and have the sellers pay $5,000 of your closing costs. The sellers will likely be willing to do this for you since they will make the same amount of money either way. 

Also as a side note, I'd always recommend doing a conventional instead of FHA if you can. There are some first time homebuyer conventional loans that do 3% down which is similar to FHA down payments. Biggest advantage is that with conventional you can drop the mortgage insurance monthly payment eventually, whereas with an FHA loan you can never get rid of it.

Good luck!

I did quite a bit of searching on this topic in 2017, and did not find anyone who would do a fresh appraisal under 6 months. If you want to cash out refi within six months of buying it, there are plenty of banks that will do the delayed financing option, but your loan amount can be no larger than the purchase price of the property. For example, if you purchased for $100,000 and spent $25,000 on rehab, and it appraised for $150,000, your max loan amount would still be $100,000. Not all that useful for a BRRR since the goal is to get as much of your money back out as possible.

Once you're past the six month mark, you can get a fresh appraisal and will be able to get 75% LTV on a single family or 70% LTV on a 2-4 unit property.

Call a few countertop providers and ask if they have any remnant pieces that are discounted. Sometimes you can get a good deal on leftovers from another project they did, though it of course limits your color options.

Yes, I just include in the lease that they'll pay $60 (or whatever the number is) per month for gas. I've heard many people say this will result in tenants running the bill up super high since they're paying a fixed amount, but have never had it happen once (these are A and B properties, too). The thermostat is located in one of the units, and I just tell them to keep it at a reasonable temp and remember that the other unit runs off it, and don't turn it off when you're out of town. Have never had a single complaint.