All Forum Posts by: Luka Milicevic

@Pat Leri I don't have a recommendation but have you explored a NON DSCR loan first? No need to go DSCR if you can qualify for a more conventional loan.

@Ryan Cummings

What's the rate on your HELOC?

Your investment has to net you more than your HELOC interest in order for it to make sense. If your heloc is at 8% you need to have an 8% return just to break even.

Mine at the moment is at 8.5% so I haven't really touched it in a while since I don't want to take a risk for such a small gain. Even if I can get a 12% return that's really 3.5%. Not worth it to me. 

Just somethign to think about....

You aren't doing anything wrong or out of the norm. 

Their concern is that your contractor is going to find something that will change your mind after they have already assigned the deal. 

If the house was occupied, I would definitely be concerned about bothering tenants but if it's vacant that's a non factor.

I understand both sides, but you should be able to go see it again as part of your due diligence

I understand everything said above and the sentiment people feel. 

Gurus are out there to SELL their product. "Get rich FAST using this one simple trick" 

Imagine trying to sell a course: "Build wealth very slowly, it will be painful most of the time, you will have to give up your weekends sometimes, you'll miss out on time with friends and family during this process" 

I was in this position last year when I had a first time investor buyer reach out and told me the offer he wanted to put in. I genuinely couldn't understand it. I had never heard of this "strategy" and still to this day I don't understand what he was trying to do. 

@Tim George

Congrats on the baby!

Let me know what questions you have...

Since it's just one property, have you thought of self managing? 

Quote from @Erik R Aho:

The thought of buying cash flowing rental properties interests me. However, I'm from Long Island, NY and cash-flowing deals are very hard to find. I'm considering purchasing out of state but don't know which markets I should look out or how to find deals in said markets. I'm 20 years old and have about $105,000 outside of retirement that I'd love to do something with. However I lack the confidence and knowledge to get started. Any tips?

Overall, cash flow in any market is tough right now...depending of course what downpayment you are putting down. Rates are high, prices are high. 

I'd look into the midwest states. Those have historically been the best ones for cashflow rentals. 

If you're looking in bigger cities, look into the surrounding areas that will be less expensive and provide you with a better rent to value ratio. 

Quote from @Courtney Couser:

How do I find commercial buyers?

 If you're looking in Nashville TN I'd recommend checking out the Cauble group. 

Tyler Cauble is very in tune with the commercial market here. 

Quote from @Heather Evans:

Hello Heather Evans here! I'm new to real estate investing.  Looking to do my first purchase soon back home in Nashville,TN!  A little nervous, but I'm excited. I live in Denver,Colorado.  Any advice  on buying  an out of state multi family  property purchase?

 Welcome to the BP community! I'm in the Nashville market and can help answer any specific questions you might have about the local market. Sounds like you are already familiar. 

What sort of multi family property are you looking for? What sort of metrics are you looking to hit? 

Quote from @Laura Winegardner:

Thanks for the reply @Luka Milicevic. I'm looking to house hack in Nashville. I've been approved for $700K without factoring in rental income and I don't need more than that. I can comfortably afford $450K without the income from an STR or LTR so that is my current budget. I'm wondering how risky/wise it would be to increase my budget to $550ish knowing that I'll be earning rental income to help cover the mortgage.

 I think only you can answer that question when it comes to risk because your level of risk tolerance is yours alone. 

In terms of logistics - a 450k budget is going to be difficult if you're looking in city limits unless you are okay with being in certain areas, homes that need work, etc. I have received several off market duplexes in the last few weeks predominantly in north Nashville around the 350k range but they all needed some level of renovation. 

Alternatively, you could look outside of city limits - approx 30 min drive or so. 

I will say 550-600 is what I would consider the sweet spot for what you're looking for. Something with a separate living quarters and in a decent area of town. 

Quote from @Laura Winegardner:

Hi all - I hope to start my REI journey with a house hack in Nashville (live in basement/smaller space with separate entrance, Airbnb primary living space). I've been told that it will be difficult to find a property in a good location and with the budget that I can afford without rental income. Would it be wise or unwise to factor income from the STR into my budget therefore affording me a higher purchase price?

I understand this is a personal risk decision and I'd love to hear pros/cons/things to consider from the Bigger Pockets community. Thank you!

In every STR that I have done, the lender has always factored in income as a long term rental. They can't pull STR data or STR estimates. I had a lender recently try REALLY hard to do so and couldn't. Even if you are actively operating as an STR the lender will look to tax returns for income, so if it has been less than a year they will still go on LTR income.

You need to factor in that your lender is going to underwrite any loan based on LTR income only. 

Where are you currently looking? What is your budget? What you're describing is very possible. I've done it many times over in the same market.