All Forum Posts by: Anthony Gayden
Anthony Gayden has started 77 posts and replied 1981 times.
Post: $180,000 profit on FHA House Hack with only $5000 down
- Rental Property Investor
- Omaha, NE
- Posts 2,030
- Votes 3,310
Let's go back in time for a moment. It is 2014 and I am living in beautiful Tucson, Arizona. I am 34 years old, single and don't have any children. I also had recently completed my first real estate deal and bought a 4-plex in Phoenix, AZ. I had the real estate itch and I wanted badly to do another deal, but I knew that I just did not have the money for another 25% down payment.
That is when I heard a term here on BiggerPockets that I had never heard before "House Hacking". Apparently you could buy a 2-4 unit property using an FHA loan and only putting 3.5% down if you lived in it for a year. I got excited and I decided I was going to do it. The problem was that even with the low down payment requirement I just didn't have the cash.
Getting a little creative, I decided I would take out a TSP (401K equivalent) loan to cover the down payment. I then was able to get pre-approved for a $200,000 FHA loan.
I reached out to my realtor in Phoenix and she recommended an agent in Tucson who was an investor himself. I told him all of my criteria, which I will list below:
-4 units
-All 2 bed/1 bath units
-single floor
-all utilities paid by tenant
-built for purpose, no conversions
-located near U of A
-under $200,000
A few weeks later my agent calls me and says he found the property that fit my criteria and that it wasn't listed yet but I would have to act quickly because it would go fast. The seller wanted $152,000 for it. I told him to make a full price offer sight unseen and within a couple of hours it was accepted. The next day I drove and got a first look at my new home. It actually was in decent condition and in July 2014 we closed with no issues. In total I put about $5300 down and rolled the other closing costs into the mortgage. I later moved into one of the units and lived there for almost a year.
Fast forward to 2020. I'm now 40 years old, married and have a 9 month old daughter. I moved from Tucson to Omaha, Nebraska nearly 5 years ago for work. I had bought several rental properties in the Omaha area and I decided that the next step for me was to sell my property in Tucson and use a 1031 exchange to buy more properties.
On April 1,2020, my former house hack sold for $345,000. After everything I received $180,000.
I wanted to share this story to show the power of wealth building through real estate investment and to show people that you don't need a lot of money when you are getting started. For the entire year I lived in the property I lived for free and the rental income from my tenants paid down the mortgage and my utilities, plus put a couple hundred bucks in my pocket every month. After I moved out the property cash flowed $500-1000 every month after all expenses and the mortgage payment.
Post: Primary residence to Rental?
- Rental Property Investor
- Omaha, NE
- Posts 2,030
- Votes 3,310
Originally posted by @Jose Lopez:
I am in the middle of a cash out refinance. My current(primary) home in LA is being rented out and has been since the start of the year.
In the application I turned in I still wrote it down as a primary residence even though its a rental property with two tenants. My plan is to get them both rent insurance and Non owner occupied insurance.
So you lied to the mortgage broker and said it was your primary residence when you don't actually live there? If so, that can be considered mortgage fraud. LTV is higher on primary residences, and interest rates are lower.
You need to be honest with your lender.
Post: Profitability in the Downtown/Midtown areas
- Rental Property Investor
- Omaha, NE
- Posts 2,030
- Votes 3,310
Originally posted by @Tommy Ricketts:
Hello Omaha Investors,
I have recently been looking into investing in rental properties in the Omaha market in areas around downtown and midtown. When I do the math on potential opportunities, almost every property I come across appears unfruitful. The impression that I am getting from many properties in the area is that they are often priced high relative to their potential operating income. When I account for taxes, vacancy, and management expenses on top of maintenance and upkeep, I'm wondering how many landlords are able to actually profit well from their properties using reasonable financial estimates. I'm sure everyone's experience here will speak much louder than my personal experience, so I am wondering... how profitable do you find properties in the area to be?
Finding a good deal is hard. I own one SFR in Dundee and one SFR in Benson and both cash flow well. I was looking for deals in Dundee when I first arrived in Omaha, but things changed so now I am looking at Benson because prices are more reasonable and cash flow is better.
I should mention that I buy off the MLS, so my strategy involves sitting around waiting for that needle in the haystack to come on market, then being one of the first people to make an offer. Since I only have been buying one property a year, this has worked pretty well.
Post: Laid off, what’s next? (Where can I get started?)
- Rental Property Investor
- Omaha, NE
- Posts 2,030
- Votes 3,310
Originally posted by @Account Closed:
I just got laid off from my job because of the COVID crisis. I didn’t love the job I had, and my wife and I are looking at this as a time where I can really find what I want to do. I’m 30, and a little aimless, career wise.
But for the last couple of years I’ve wanted to get into real estate investing. We’ve been working on paying down debt and getting educated.
I’m not quite in a spot where I’m ready to begin investing, we still have some ducks to get lined up (paying off the last of our debt is the biggest one. We were projecting to do that by the end of the year before I lost my job. So my question is this: what kind of job can I be on the lookout for that will bolster my education in real estate investment? In other words, what kind of jobs will end up being paid education for me?
I take the test for my real estate salesperson license next week. Realtors are still working here in Nebraska.
Post: Dave Ramsey is a Genius now
- Rental Property Investor
- Omaha, NE
- Posts 2,030
- Votes 3,310
Originally posted by @Marcus Johnson:
Anyways, what I"m trying to say is now I understand why Dave Ramsey is a genious. During these times, can you imagine that if you owned your properties free and clear, and had a large emergency fun for each property, you'd be sleeping at night quite well. Having zero debt is king. No one ever expected this would happen (Covid-19) and there are tons of renters who have been laid off that won't be making their rent payments and guess what? As an owner and landlord you still have to pay your mortgage, taxes, insurance and 50% maintenance fees. If you owned free and clear you wouldn' t have any mortgage payments. How lovely that would be.
So I'm really hoping that the lake property sells today or soon and my plan is to start paying off my primary home first and then start working on our duplex. Once those are free and clear, then I will start saving to buy another rental property with cash. I've been alive for the S&L in 87 debacle, the tech bust in 2001, the housing crash in 2008 and now this one. So this is my plan and thanks Dave for all that you do.
I'll bite.
Keep in mind that Dave says to not invest in real estate until after you have all your debts paid off, you have an emergency fund of 3-6 months, you are putting 15% toward retirement, you are saving for your kid's college, and your primary residence is paid off. If you do all of those things he only thinks you should pay 100% cash for investment property.
If you have an income of $75,000 per year it is likely that it will take you 5-10 years to save up and buy 1 rental property if you follow his plan. You buy a single family home for $150,000 it will take you 5 years of saving $30,000 per year to buy it. You may be able to get $1500/month in rent. After taxes, insurance, maintenance, and reserves, you may bring home $1000/month. That is a terrible return on investment.
As others have said, the only way his plan works is if you have a very high income (doctors, lawyers, etc.) or you are buying very cheap properties (10-50K homes in the hood or rural areas). That is why I completely ignore his advice about real estate investing.
I like Dave Ramsey and I follow a lot of his teachings. I have no consumer debt, I have a 6 month emergency fund, I contribute 15% of my income to retirement and monthly to my daughters 529 plan. That is where I draw the line though, I have over $1,000,000 in mortgages on rental properties, I use credit cards and pay them off every month so as not to carry a balance, I have a HELOC. I use debt and it has made me a lot of money, even in these rough times.
Post: Use the 2-Week Quarantine Time to Get Real Estate License Online?
- Rental Property Investor
- Omaha, NE
- Posts 2,030
- Votes 3,310
Originally posted by @Clayton Boyle:
@Anthony Gayden How did you like the VanEd course? My girlfriend's dental office is closed for quite a long time and I'm trying to find a good online course to get for her to get her license. No time like quarantine time to learn some new skills and get a new license!
VanEd worked pretty well. I had to play around with the interface a little to learn it, but everything was very straightforward. They also sent me physical copies of the learning materials that I can use offline.
I actually signed up for the Real Estate Brokers license course, which is a 180 hour course, but I have not yet completed the required coursework.
Post: Use the 2-Week Quarantine Time to Get Real Estate License Online?
- Rental Property Investor
- Omaha, NE
- Posts 2,030
- Votes 3,310
Originally posted by @Neil Bresnahan:
I am considering spending my two-week quarantine time taking the 60 hour course load required to get a Real Estate Salesperson license in my home state of Nebraska. I am a dentist, so obviously I can't work from home, but I need a productive way to spend this idle time. I currently do not own any real estate, but I plan to use my VA loan to house hack a duplex, triplex, or quadplex when I get out of the military in 2021. I found The Cooke School by doing a Google search; they have solid reviews and offer the 60 hours of course work required to sit for the licensing exam entirely online for $259. I realize that there will be more fees for the actual exam and for obtaining the license from the state as well. I would appreciate any input on this idea!
I actually am scheduled to take the Nebraska Real Estate Salesperson test on April 6th. I used VanEd online learning to do all the coursework for the 60 hours required coursework.
Post: Omaha Real Estate Investors
- Rental Property Investor
- Omaha, NE
- Posts 2,030
- Votes 3,310
Originally posted by @Connor Streit:
Hello Omaha Investors!
I've made it one of my goals this year to be more active on the BiggerPockets forums and connect with BiggerPockets members in Nebraska. I thought I'd start by giving a brief introduction of who I am and what my real estate goals are. I'd love to find out more about you so please fill free to drop a comment on this post so we can connect!
Name: Connor Streit
Age: 25
Education: University of Nebraska-Kearney, B.S. in Exercise Science
From: Kearney, NE --> Looking to relocate to Omaha, NE within the next year and a half
Occupation: Full Time Medical Device Sales Rep for Zimmer Biomet
Goals: I hope to close on my first house hack property in Omaha, NE before the summer of 2021. I would like to cash flow at least $100 after expenses. I have been a BiggerPockets member and have been studying the real estate game through BiggerPockets (website, books, podcasts, etc.) for over 3 years now (frankly, I'm tired of the studying and I'm ready to put the knowledge into action!). I am looking to connect with Omaha, NE real estate investors to 1) Make friendships with people that share the same interest in real estate, 2) Learn more about the Omaha market, 3) Become a more active BiggerPockets member to help other members looking to invest in the Nebraska housing market!
Interests: Books, weight-lifting/bodybuilding, traveling, craft beer, cooking, real estate investing, personal finance, FIRE, entrepreneurship, bike riding, food.
Please fill free to drop a comment to introduce yourself and shoot me a DM and Friend Request!
Hello Connor. I'm an investor in Omaha.
Post: Class C landlords - better build up some cash reserves
- Rental Property Investor
- Omaha, NE
- Posts 2,030
- Votes 3,310
@Karen F.
Actually you were wrong. You suggested Class C landlords would be in trouble. That was not correct. STR landlords are in trouble.
Post: Buying in Competitive Markets
- Rental Property Investor
- Omaha, NE
- Posts 2,030
- Votes 3,310
Originally posted by @Satyam Mistry:
@Anthony Gayden Hello Anthony, nice to meet you. I am seeing the same trends, thank you for sharing. Would it be possible to know which local lender you are using as that 15% down is lower than many of the banks in the area that I have spoken to. Do you manage your own rentals? I am closing on 2 SFR's at the end of the month, 1 in Millard and 1 in Bellevue. On 2 other SFR's in Omaha I am waiting for another 2 months to hit the 6 month seasoning period and then will do a cash out refi and get a conventional 30 year loan on.
I am currently finding the properties online and the promising ones usually have 10+ offers within 24 hours and are going for over the list price.
I use Pinnacle bank, which is based here in Nebraska. They sell their mortgages to Gateway Home Loans and Citizens One. They will do 15% down on non-owner occupied SFR but you have to pay PMI.
Homes on the MLS are going quick and some for above asking price. I do manage my own rentals.