All Forum Posts by: Logan Padilla

 This is certainly a great place to put out feelers and get some feedback, so great first move!

It was mentioned above, but if you purchase a multi-unit property and live in one unit to begin, you can put as little as 5% down and use the income from the other units to help you qualify. This is a great way to enter the investor space. 

Also, something to keep in mind is that when an underwriter is calculating your debt-to-income ratio to qualify you, they will only take into account what's on your credit report, so things like food, entertainment, car insurance, etc. won't affect you. 

Two viable options. I've alway been a proponent of preserving liquidity and letting in work in a separate market. If you take out a mortgage with a minimal down payment and connect with a solid financial advisor, you can take advantage of the appreciation of the property, which is going to be the same regardless of how much equity you have, and you can have the rest of the money working for you elsewhere. Once you blend the income from the investment property and the gain from your stock portfolio, you may very well be in the green from the beginning. 

 Apologies, but I misread the original post a bit. You would need to live in the multi-family (at first, anyway) to take advantage of the 5% down option. 

If the numbers work out and you do end up going with a HELOC or a HELOAN, you can do so with the intention of refinancing your entire first mortgage when rates drop, absorbing that 2nd. The only way this may not make the most sense is if you have a 3%-4% rate on your first.

@Chris Rich Good point. An overly-saturated market should certainly be taken into account. I always suggest everyone run an AirDNA report prior to entering into any STR market.

My sources for appreciation are an aggregate of FRED, US Census, BLS, JBRG, NAR, and MLS data.

Paying all-cash isn't a bad move, but by financing the property, you can preserve your liquidity, invest it, and let it work for you. Then, you have money working for you in an investment account on top of the appreciation from the property and the equity gain from paying down the principal balance.

There are great opportunities in every market, so it's really about finding the right place. To arm you with a little more knowledge, the average 5-year rate of appreciation for Tampa is 9.2%, while the average 5-year rate of appreciation for Orlando is a little lower, at 8.56% That said, Orlando is a tourist hub, so my advice would be if you're looking for something short-term (AirBNB), finding a place in Orlando around the attractions could be the way to go, but if you're looking for a more long-term investment, Tampa may be your best bet.

An FHA loan is only for a primary residence - that is correct; however, there are a multitude of other products that may work for you. One strategy could be to get a seller credit (or build it into the offer) for a temporary buydown to hold you over until rates fall to a point in which it makes sense to refinance into something long-term. A temporary buydown would lower your rate by up to 3% for the first year and it would progressively by 1 point increments, on a yearly basis, until the full rate is reached. Chances are, you will refinance by the time the rate reaches its max, and whatever money is remaining from the credit would be applied to your principal balance as a reduction.

If you're looking to start a portfolio, you could use the money to fix and flip a property, then turn those profits into new acquisitions. As long as you have a strong team, you can be fairly hands-off, leaving you time to focus on your studies. As the portfolio grows, you can then move into fix and holds, and hire a property manager, and your business becomes virtually autonomous. 

It's worth noting that a HELOC rate is always going to be substantially higher than a conventional loan. With an investment property, you can put as little as 5% down. If you are able to handle that + closing costs without the need for a HELOC, you forego the higher rate on a portion of you equity. If you absolutely must use the HELOC to access the needed liquidity, it is still a viable option.