All Forum Posts by: J. Martin

@Adam Menconi ,

I'm doing my own investing in the Bay, so can't offer you any funds now. But just for clarification, I'm unclear if you're looking for equity or debt partners? I saw the first lien, implying a loan (with 10% interest?). But your edit makes it sounds like the return is variable, like equity..? Or some hybrid/kicker?

I might be more specific about what exactly it is you are offering / looking for..

@Nathan Anderson ,

You can always try some of the less expensive places in the Bay for better CF.. These are generally the places you probably would not be jumping to live.. Richmond, Pittsburgh, East Oakland, or more extreme, Stockton, Modesto.. within driving distance. Or Central Valley .. Or out of state..

The peninsula is on fire down there! Definitely would be hard to find cash flow there now I think..

@Brendan O. ,

I might have already told you, I'm extremely biased towards FHA because of the ability to leverage your capital. I agree with your comment. If you can save the cash, why not buy two?

BUT - you might run into problems with qualifying for the second loan, because either way, you likely won't have much CF if any in SF. So your w2 income needs to be high to get the second deal done. Maybe that's not an issue for you.. But an important thing to consider. Or you could always do a JV deal with someone that can qualify for the loan on the second deal. Part of the reason I bought my FHA 4plex in Richmond instead of Oakland or SF. Rent/price gets better and better as you go out..

I just realized, I closed on my 4plex exactly one year earlier than you.. 12/31/12. Hope you can do a repeat of mine... To your next 365 days being as good as my last..! Happy 2014!

Also, if one of you are a US veteran, you can get a VA loan for 0% down for owner-occupied. Then you can move and use it as a rental later, just like FHA, if you end up wanting to move somewhere else.. But again, not intended for investors.. Not sure about 2-4 unit with VA.. FHA for sure..

Alicia,

My first 4plex is producing good cash flow, as are a couple SFR's I own. I'll be writing a forum or blog post about 2013 performance after I wrap up my numbers for the year, so "follow" me if you'd like to hear about it.

I mostly buy vacant units because I like to rehab, pick my own tenants, and get top of market rents. I bought my 4plex FHA and 2 houses on 1 large lot w/ a 20% down conventional loan, split with a partner. (Property is a bit more expensive on the CA coast, so needed to team up to keep things going quickly..) I highly recommend FHA on a 4plex to make the most of your capital if you don't have a lot of it..

When you get an FHA loan, you sign a document that states you will be living in the property for at least one year (as of end of 2012). If you do not, you are in technical default, which means the loan can technically be called due. I haven't heard of this before, but I recommend fulfilling all your obligations.

FHA are explicitly NOT for investors, and I'm not sure if you could have a second, non-family member on title - especially with a split interest. BUT, FHA will underwrite about 75% of the rental income of the non-owner-occupied units on a 4plex when they are calculating your Debt to Income. So if the PITI+MI ends up being less than 35% of (.75* rents on the other units) - or whatever the ratio is now around 35% - then I think you could qualify without w2 income.. This would have to make it a very high cash-flowing deal for the numbers to pencil out it looks like. But you'd have to ask an FHA loan officer/broker about the details.. Bumped up my purchase price by multiples..

I forgot about not having income.. I assume you can't structure your trading income as a salary with a bonus relative to profit with the person providing the capital (and maybe a forfeiture of salary if you don't make anything..)? Not sure if that would work. Just throwing stuff out at 2am..

Hi Thomas, and welcome to BP! I’m a ‘fix and hold’ investor from the Bay Area in CA, and loving it! But you’ll find a variety of every type of investor on the site, and everyone is amazingly helpful. Some pointers for you: The "Learn" link across the top navigation bar has lots of great info, and so do BP members! You can click on the ‘vote’ button if you like someone's post or is helpful, and there are ‘awards’ to earn on your profile. And you can tag people by typing @ before you type their name, then clicking their name at the bottom of the message box. Welcome to the site, and good luck in everything!

Welcome Alicia. There are a lot of super helpful people and great advice on this site! I’m a ‘fix and hold’ investor from the Bay Area in CA, and loving it! A lot of others doing flips, wholesaling, notes, everything.. A few tips..

You can tag people by typing @ before you type their name, then clicking their name when it pops up at the bottom of the message box. You can click on the ‘vote’ button if you like someone's post or is helpful, and there are ‘awards’ to earn on your profile. The "Learn" link across the top navigation bar has lots of great info, and most importantly, the BP members! Welcome to BP, and good luck on your investments!

Hi Steve, and welcome to BP! I’m a ‘fix and hold’ investor from the Bay Area in CA, and loving it! But you’ll find a variety of every type of investor on the site, and everyone is amazingly helpful. Some pointers for you: The "Learn" link across the top navigation bar has lots of great info, and so do BP members! You can click on the ‘vote’ button if you like someone's post or is helpful, and there are ‘awards’ to earn on your profile. And you can tag people by typing @ before you type their name, then clicking their name at the bottom of the message box. Welcome to the site, and good luck in everything!