All Forum Posts by: Jeff Schemmel

 Understand, but if you want to be anything other than a struggling agent you must think from the client's perspective.  It's the only way you'll learn how to do what's best for them.

fair enough, but If you're saying it's hard to pay the bills, and you don't know what you're doing those two things need to change real quick if you want to have a chance.

Owner-occupant loans are a great way to start acquiring property for a low barrier to entry; that is most of the advantage.  In my opinion, it's a pretty big deal to me (as an agent) to be able to say I own and don't rent, and not need the commission because my cost of living is low.  I'm going to be a bit brutally honest here, but from a client's perspective, they don't want to work with an agent who needs the money because it's an obvious conflict with their interests, and they can easily work with someone who has actually purchased before vs someone who hasn't.  These are two things you can change pretty quickly with an owner-occupied property.  

@John Dawson the best thing I can recommend is 1.) find a mentor you get a long with who is willing to show you the ropes and just be willing to grind like your life depends on it.  1-3 years of that will set you straight, so long as you're putting your clients first, and doing a good job.  Credibility is very important as an agent/investor who attempts to cater to those clients, I highly recommend using your knowledge to get yourself a property once you build yourself back up financially.  I wouldn't have a chance in the market I'm in without putting in that work to become credible.  Sharing stories/experiences/tips from my work is absolutely what reinforces me as an asset to the team of any investor I work with.  

I would set appointments with local investor/agents who are tapping the market you want to serve (just look at closed multi-family listings and see who sold them), and keep doing that until you find a person who stands to mutually benefit from coaching/mentoring you and expect to pay them a split to work alongside them until you're prepared enough to go on your own.  Use your license and experience to get yourself a duplex and rent the other side to try and keep your cost of living as low as possible.  These are just tips and examples to get you thinking in the direction I took and maybe you'll see a path.  Good luck!

@Mike Gratzmiller absolutely. Do it, so long as it's safe and habitable down there. Utilities not split is a bummer, but I have a few clients who have househacked a single family with an ADU and that's a pretty normal thing in most places.

@Anthony DelVecchio an important part about buying an investment property is having some reserves. with an FHA loan, you need to pay at least 3.5% of the purchase price out of pocket, plus 2.5-3% of the price in closing costs before even talking about reserves. Alongisde that, it will be important to have stable employment, because your job is what helps you qualify. One advantage to househacking is the rent from the other units in a multi-family property can be added to your qualifying income (with some exceptions). I think, whether you're ready from a cash perspective or not at this point it would still be helpful to build a relationship with some trusted lenders who have demonstrated experience with helping househackers/investors for them to coach you a bit on what steps to take now while you are saving up!

Of course, Down payment assistance is available and the you can negotiate closing costs in certain circumstances but your chances of doing both are only reasonable if the property/seller are in a tough spot and the property isn't popular on the market.  I think you should not expect/count on this for your first property.

nice. looking forward to this one!  Thanks @Bryon Andrews

@Dustin Horner Well, it depends on your comfortability with being leveraged.  Some people view that as too risky.  The advice I've been given, and chosen to follow, is to utilize HELOCs for short-term investments, with a plan to pay them off in less than a year and to avoid holding them long-term.

Do you know what the value of your recent rental property purchase is? If you plan to cash out refi, you'll want to have a pretty good idea of that value to see if that is viable. If you could get the refi and pay off the HELOC, you could re-use it. The baseline down payment for a small multi-family is going to be 60-80k for the lowest entry price that is rentable—anything cheaper than that and you'll need to be ready to put some funds toward rehab.

What I have seen colleagues have success with is working with a private money lender for acquisition funds, and using your HELOC for repairs.  That way you could acquire with hard money, put your own skin in the game via the repair costs utilizing your HELOC, and then refi out and get cash to pay off your HELOC and the hard money lender and keep the property as a rental.  This is a difficult and aggressive strategy, and it means you'll spend much more time upfront finding the deal; this goes without mentioning the risk of doing this while managing a family life and a busy job.

First step is understanding if that cash-out refi is even an option. there's missing info here to understand if it is. everything else seems to be dependent on that, but at the very least I would consider paying off that HELOC first with those refi funds before acquiring another property.

@Matt Jones I'm a little surprised you didn't get a response to this.  I use Apartments.com for no cost, and it does everything I need it to do comfortably.  You can scale a bit before you'll need to upgrade.  People complain about just about every platform, but I've heard good things about turbo tenant, and others as well.  @Bryon Andrews uses Buildium, among others I know who have larger portfolios, but I believe there's a fee?  I'll let him comment.

@Dustin Horner are you able to manage it yourself?  I am not against the idea of property management, but I am a big proponent of managing your first few properties yourself; there are many benefits outside of the costs to be considered with that decision.  I will admit, it's a scary thing to take on as a new investor, and it's not without risk and time commitment.

if you can cash-out refi that sounds like a decent option - hard to advise on that without seeing the numbers.  If you're going to non-owner-occupy multi-family you need 25% in cash plus closing costs and reserves, unless a Contract for deed is an option.  There are some edge-cases where you can get in with creative financing but in this metro-area spring market you'd be better served to take a conventional route in regards to your time spent hunting for a deal.  late summer/fall timing tends to give you a better chance to open those doors; although listings start to wane that time of year into the winter.

I'm reading that you leveraged to buy this first single-family rental. Are you at all worried about paying down that HELOC? I also wonder what your personal living situation is, and if you have the interest/flex to owner-occupy. That can open some doors for you as well. If you're just trying to buy investment property doors as fast as possible without a liquid cash position you might want to try to focus on value-add to create some cash flow or BRRR opportunity for your next deal.

I am having a bit of a hard time providing real advice without knowing much about the rest of your situation.  Perhaps if you shared what your medium/long-term goals are we could help a bit more.

@Grigoriy Gorshteyn