All Forum Posts by: London Stewart

London Stewart

Also just a heads up fha loans allow 6% seller concession. This is one of the best features of the fha in my opinion and many loans are 3-5% down but only fha is 6% concession .

@London Stewart The big pro for a house hacker is that you wouldn't be using your FHA loan so when you get your own house down the road or want to house hack again you can still most likely get and FHA and get the 6% sellers concession if you want it. This is very helpful if you get and expensive home for yourself and don't want a ton of out of pocket. the affordable home solution loan concessions is lower I think its around 3%or maybe even 2% . are you familiar with sellers concession?

Not familiar with conventional 3% down, no PMI......perhaps it is "prepaid PMI", where they add the fee to your loan balance or raise the rate to pay for it out of the spread premium?

@Jeff B. London is speaking about the Minneapolis metro area. I'm not sure where you invest, but Minneapolis doesn't have the extremely high property values like the high density east/west coast regions. For around 100k, you can buy a 3/1 SFH in our area and get $1200 -$1400/mo rent in nice neighborhoods. If London's dad puts up a 20% DP, he'll pay $580/mo PITI and tenant will pay all utilities. When you deduct for PM, vacancies and maintenance you are cashflowing around $300-500 conservatively. That's an 18-30% ROI which is a good return in any region.

My experience is contrary. In high property value areas, the SFR rental will not even cover the mortgage and there's negative cash flow. I went to MFU 6-unit specifically for this reason - - to generate cashflow, not red ink.

Basicially, your SFR rent less mortgage, taxes and other expenses must exceed your rent to avoid red-ink.

London, can you find a multi-family in Minneapolis for 100k and under?  Yes...North Minneapolis (close to Jordan neighborhood) or South Minneapolis (close to DT).  

It would be a challenge (but doable) outside of these areas without increasing your budget or doing some creative finance type deals.  

I think that budget is better suited for a 3/1+ SFH where you can get in under 100k and collect rents between 1200-1400/mo with tenant paying all utilities. Having both SFH and multi-family rentals, the SFH cashflow better and have less tenant turnover.

Multifamily in Minneapolis at or less than 100k is very rare and hard to find. Usually it would need extensive rehab and/or be in bad parts of town. For your first property i would stay away from bad parts of town. Is your budget capped at the 20k? If you buy a 100k property will you have money left for rehab?

I wish you luck but with that budget SFH might be better place to start.

I own some properties in western suburbs but have most of the contacts your looking for. PM me for details