All Forum Posts by: Justin Marshall

@Jan Michael Ronquillo Depending on how quickly you want to re-invest into more properties would dictate what avenue I would suggest.  If you aren't looking to buy soon and can swing the payments with both units empty then I'd lean heavier to leaving the terms as they are.  If you are looking to leverage what you have and continue to grow your portfolio I would refi to a lengthier term and generate cash flow for capitol and the ability to carry the loans without you needing to back them as heavily and also to allow for vacancy and other expenses.

I invested within an hr drive time.  I agree with  you on the lengthier vacancies and exiting availability.  You could also do some research as far as government housing which actually places tenants for you and rents are guaranteed for the lower numbers.  I have never dealt with section 8 personally but I do deal with hud housing and haven't had any issues there thus far and I've been doing that for 6 months now on 2 of my units as a test run.

Jan I'm questioning why you put the term limits so short and yet still have a high interest rate.  Your cash flow is very minimal to say the least so I hope you don't have any repairs, vacancy, and are self managing.  I would allow the houses to season for a year and the refinance into a 15  or 20 year note.  This will allow you have cash flow in the units.  Plus you should have some equity you could cash out if you'd like as well.  Most lenders will do a 70% arv some will go 80% even as an investment property.  With the numbers you've presented I think this is your best option due to being so tight after all fees associated with flipping them you'd barely walk away with much of a profit.  If you can safely say there wouldn't be repairs or vacancies keep the loans longer as to gain more equity but 1 vacancy wipes out all profit for 3.5 years not to mention any other expenses.  I'm assuming you haven't taken taxes or insurance into these numbers.  To refinance you will probably have to do a balloon loan as the values are below 50k and a lot of lenders don't lend on such small  mortgages.  Hopefully this helps and good luck.

Based on the numbers you presented you would have to live in the property in order to get the fha loan for that interest rate.  Meaning you'd cut your rents in half for at least a year for you to live in the property.  If you are choosing not to live in the property you'd be looking at a 20% down payment and probably 5-8% interest rate pending lenders.  With the larger down payment it would make your cash flow a little better but would it be enough?  My opinion says not for the asking price unless you can get top market rents.  I did notice you bumped the rents to 1275 however you said 1400 is fair market.  Your number also don't reflect any rental rate increases over your 30 year holding time.  I'm confused on the 25% capex especially if you don't have any type of rehab needed.

6% is not a bad rate for your first investment property.  I started at 5.75% and have dropped it over 1% within the past year with other purchases but you have to build a relationship with your lender.  I would be willing to bet that with a larger down payment you could possibly lower your rate as well.  I am assuming that you are looking at a buy and hold property since you are concerned with interest rates as well.  If you can get commercial lending any future purchases they should allow you to use the equity in your portfolio to continue buying.  Hope this helps or sheds some light on your situation.  Good luck

Welcome to the group Eric.  There are a variety of areas you could invest in within the 30-50k market.  Only thing I would say in that price point is the caliber of neighborhoods as well as the tenants.  I tried that path and had to jump my price points up to the 75-125k range to get a better pool of properties and tenants to choose from.  I also have found that I now have long term tenants as apposed to yearly or monthly.  That's my experience with what you are proposing.  Hope this helps and good luck.

Being part of a PM group would go great with multifamily.  You could also consider the lending side of things as it would allow you to take a business with you where ever you decide to call home in the upcoming years.

My opinion is much the same as the others. Keep your w2 job for at least 2 more years and get more income passively before you quit.  I made a 12 year plan for my family.  That being said my wife and I will work til 2027 but are slated to have 35 properties minimum as passive.  As well as us both working I do rehabs and handy man work for many other investors around so I can dump more Capitol into our portfolio.  We will be buying 3 properties every year for our portfolio and will have the first one paid off in 3 more years.  I am also in process of getting my real estate lisence to save money on purchases but also as another stream of income.  It will also allow us to transition out of the rat race easier and always have something to fall back on for income if needed.  Everyone has put forth many good ideas and opinions for a yes or no answer. If it were me I would find my freedom number and go from there in an answer that fits you.

the biggest mistake I see is the down payment.  Had you put 20% down your cf would have been 200/month.  If Capitol is/was an issue I understand.  I really only see one way you can benefit from this house and that’s to house hack.  If you can get the other rooms rented for 700-800 a month and make either double payments so you can refi in a couple years or save up Capitol.  As an investment it looks like you paid market value and with no down payment you can’t expect cf.  is this a learning experience yes.  But is it feasible to rent the entire unit not in my opinion.  Getting room mates for 2 years and moving on is about the only way I can see you truly making an investment with this property.  Even then it only gives you a down payment for another property of similar quality or allow some you to refi so this one will cash flow.  Hope this helps. Keep moving forward!

It would actually be 21k if debt erased and leave you with a touch under 19k for a down payment.  Pending location of where in KC that could allow you enough to purchase a home/duplex and avoid pmi.  If you can find a duplex/multifamily it also allows you to house hack.  With doing that you can pay down your remaining debts faster all while investing and having a primary.  Hope this helps.