All Forum Posts by: John Ford

Your score is fine. The thing you need to worry about now is income. You'll need to show that you have a stable job that makes enough to pay for the loan. For buying your first property, they won't take into account the potential rental income so your income has to be able to cover the entire loan. You said "stationed", are you active duty military? If you're an NCO or officer with decent housing allowance, you should be OK for a reasonably priced place. But with just base pay and no housing allowance looking to go out on your own, it might be tough to qualify. But definitely don't worry about your score, you're good. Not great, but good. And as long as you don't mess it up, it'll just keep getting better. If you're already responsibly using other credit (credit cards or paying off a loan, etc...), it might even bee in the 700s (which would be a great score) in 10 months.

VA is pretty easy to qualify for. 620 minimum credit score and you're good to go. 683 will get you a great rate with a VA loan. I'd definitely go that route with zero-down and keep that 20k as reserves.

I just made my first investment this week with Groundfloor. I just made a very small investment to check out the platform. So far, so good. It's a very well-done site. The main reason I went with them is they've somehow gotten around the "credentialed investor" requirement. For this initial investment, I went with a pretty solid-looking project with an 8% return, but they have some riskier stuff available as high as 13.4% right now. Their grading scale goes A-G, and from 7.4% up to 16%, but I haven't seen any G's available yet.

Kind of would have liked to seen house-hacking vs simply "moved out". Just because the "move out" method seems to be the lowest barrier to entry for most (and how I got started) but it's one of the things I see mentioned least on BP. I always thought that was odd.

Well, the house went under contract in 3 days. At least my instincts were validated. :)

Thanks @Greg Jeanfreau. Yes, that is exactly my overall plan: purchase with LOC money then refi later to pull cash out and pay down/off the LOC. I'm hoping to qualify for an interest-only line of credit, as well, which will make cash-flowing properties in the interim before refinancing into fully amortized products even easier. My original plan was based on getting that ball rolling early next year.

I'm going to let this one go and keep going with my original time-table. It's just exactly the type of property I'm planning to buy, with the right numbers, so I was just checking to see if it was worth trying to fast-track some parts of my plan and hope the rest of the train catches up. But it sounds like the safest bet is to get the money in order first.
I do think overall I disagree with the "have everything set in stone before making an offer" approach, though, since it seems that's not strictly necessary. But I do think I'll save "winging it" until I have more than one option to choose from, like having 25-30% available for a down payment in addition to reserves for my other properties, just in case I need to fall back on conventional financing or even a hard money lender in order to close or something.

If they're a business, paying as a business, they're required to get a W9 for any non-corporation they pay more than $600 to in a tax year. This is part of the IRS's checks and balances to keep everyone honest. If you're planning on reporting the rental income on your taxes as you should, there are no tax implications to providing the W9.

The good news is you don't have to save as much as the average Joe. You can buy with $0 down with a VA loan, no mortgage insurance required. It might be tough to qualify on active duty pay. But keep saving and when you get out (or get a couple more stripes if you're planning to stick around) you'll have more than enough to get into the game. If you go the VA route, you'll have to go with a 2-4 unit if you want income right away since you'll be required to live in one of the units for about a year.

Then, when you're ready to do it again, depending on how much your first house cost, you might be able to turn around and go with a VA loan again on 2nd tier eligibility (while keeping the first) for your second deal. Then you'll be tapped out on VA elligibility until you pay off the first loans. But getting into 2 properties, up to 8 doors, with no money down... a lot of the people on here would do almost anything for that opportunity. The VA loan program is the absolute best non-retirement veteran's benefit there is. Find out all you can about it.

@Robert Taylor very good tips, thanks! I currently do most of my banking with Navy Federal, which has been great as a personal bank. Their lending tightness seems to ebb and flow, presumably with their lending needs, reserves, etc... They also have some real estate investor-focused mortgages and lines of credit which I'll be seeing about. And I know they do business banking if I wanted to move up to commercial multi-family in the future. But I don't know how good/strict they are at the larger stuff. I might look into establishing a relationship with a smaller local bank. I actually have one in mind.

My real ace in the hole for later on is the main investor in the company I work for now. In addition to software startups, he does a lot of commercial real estate deals (multi-family here, building townhouses there, warehouses over there...) the guy's all over the place. We have a pretty good relationship and I'm about to help make him a ton of money with this software startup. He loves mentoring people and helping "his people" move up. So if I ever get to the commercial level, I definitely plan to try and tap him a little bit for some connections if not outright partnership.

Better than guessing, you can probably lookup a property's previous taxes on the county assesor's website. Try googling "[county] property search" or "[county] property tax records" etc...

Taxes can vary a lot from area to area. There's probably a rule of thumb some people use but I don't know it because it's so easy to find the real data. Around here, at least.