All Forum Posts by: Matthew Becker

Mine one does about double what I would get for rent. $5K instead of $2500 and I get to use it. My other 12 do about 1.5% to 1.75% of market rent. I am adding 24 Plex all STR, 18 all STR, 8 all STR, plus a few one offs. They are all in North Idaho but not all in my town.

I am building new, and they are designed for it.   Start with your own house see how it goes.  

Quote from @Tidal Creek:

Quote from @Matthew Becker:

It seems like you can cover it so just do it. There is no real risk. It seems the profit would cover taxes, and you would have more capital to do other stuff. You can also just do a self-directed IRA and start making your money work better for what you are doing.

I started a self directed IRA about 15 years ago, this particular deal  won't work due to the math and other things. On that note, I'm considering converting that self-directed real estate IRA into a Roth, ideally for generational purposes down the line.  

If you are planning on passing a ROTH to your kids, then it does not really make sense to make it a ROTH.  I believe the value would get passed to them and the current market rate.  So you would just pay taxes on the ROTH.  I am not positive how this works, but that is my understanding.  Good luck.  One thing I have learned very recently is to have a good accountant.  I have never been able to find a good one until a few years ago.  

Quote from @Mike Levene:

Hi @Chris Rojas

I started exactly the same way (with a triplex not a duplex but not important). 

First, congratulations it sounds like your first deal is going well and is hitting your targets for cash flow, renovation timing, and hopefully budget. 

When looking to buy your second property, there are of course synergies to use the same local bank, however, there is nothing that requires you to use the same bank. You will likely find that some banks are much more favorable to lending to primary homeowners, while some may lean towards investors. 

It sounds like your current bank might be hesitant to provide a loan for the next property until you can prove that the current property provides enough income to support your overall DTI (Debt to Income Ratio). The easiest way to prove this is to have a lease in place with a tenant. You mentioned you seem to think this is a new regulation across big lenders, but aren't you working with a local bank?

Have you spoken to multiple banks and loan officers about your situation. I think it is a very broad statement to say it is riskier and harder to get approved for a triplex vs. a duplex. Ultimately, it comes down to underwriting and the ability for the property, and you, to afford to pay the monthly expense of the loan. 

If I were in your shoes (which I was recently, and will be again when I move to the next property), I would call up 10 different lenders including small banks, credit unions, etc. and tell them your situation, what you are trying to do, and how they might be able to provide a product to support you. 

Lastly, you mentioned this is a BRRRR but you plan to cash flow "like crazy" after renting it. If it truly is a BRRRR you would plan to refinance the property to pull out some capital, and then likely use that for your next deal. Totally ok if you don't plan to take any capital out as interest rates are likely higher than your original loan, and it sounds like the deal will cash flow, but just wanted to point that out so you are speaking the same language.

 I would suggest you go the commercial route.  When walking into a community bank, ask for a commercial banker.  I can now close loans at a lower rate with my commercial banker than a residential owner occupied.  It is much different.  It depends on what their appetite is for lending.   Many are not lending, but others are very aggressive and are building their portfolio now.  So, talk to as many as possible.  I live in a small town in Idaho, but you live in NJ.  You have a million banks around you.  You can get terms of 2 to 10 years.  I would consider a shorter term between 3 to 5 so you can take advantage of a rate change.  There will be PPP, so that is the downside.  

I would think that would work well in AU.  I don't see any reason it would not. 

depends on the data.  

Quote from @Kisaki Nicole Kaopua:

Quote from @Matthew Becker:

It depends on how short you are.  When I was young in the game.  I used credit cards all the time.  Dave Ramsey would not be pleased, but he went bankrupt investing in real estate and is only rich because he tells people how stupid he was all day.  For some reason, people listen to him.  Generally, you can get a card that offers 0% for transfers.  So charge up a card and transfer it.  You can get a car loan on your car or truck if you have a nice car with no debt.  Do you have any other assets you can borrow against?  If you paid cash for the foreclosure, you can get a construction loan at a local community bank or credit union.  These relationships are essential to establish.  I would probably not use a hard money lender.  

Home Depot generally offers 6 months interest-free, and  Lowes probably does as well. But there are a ton of cards out there, that officer. I glanced, and I saw that Wells Fargo and Citi Simplicity have a 21-month offer.   That was just what AI said. 

 I appreciate the insight and honesty! I will definitely be looking into these credit cards. What a great work around :) 

 Good luck.  I suggest you apply for three at once. Then, it won't look like you are applying for a bunch simultaneously because they won't see each other.  It will still show up as three inquiries.  Don't do more than that.  The hit for pulls is minimal compared to the credit you need.  Plus, you will have a higher credit score when you pay them off.  

It seems like you can cover it so just do it. There is no real risk. It seems the profit would cover taxes, and you would have more capital to do other stuff. You can also just do a self-directed IRA and start making your money work better for what you are doing.

What do you mean by creative financing? An owner carries is the best; you could do a wrap as well. The first house is the easiest. Get a FHA loan, there are several other programs out there. Low to zero down on your first house. But it, rent rooms, Fix it up. Goal to live for free. When I was 21 in 1992, I lived in a 3 x 8 closet with a twin bed on the ground in Boulder CO. I cash flowed that house 500 a month. That would be equivalent to $1200 now with no rent. So I could live off of that at the time.

How much do you make?

Saving?

Debt? 

Based on a quick look, houses are cheap there, pick one that is crappy and in the best neighborhood.  

First, shoot the cat. It is ok. They have nine lives, and they can live the other eight somewhere else, and don't take in dudes who have cats in the future.  No single man with a cat can be trusted, and most are mentally ill.  Men with cats should get them only for their daughters because they love their little girl but still hate the cat.  Luckily, my 8-year-old is allergic. Thank you, Jesus. That is an overgeneralization that is almost always true.  I am sure there are exceptions; I have never seen one.  

Now for your advice about getting rid of CATMAN or CATWOMEN, whatever he prefers. 

Please hand him a 3-day notice and evict him as soon as possible.  No talking to will fix a person raised to live like a pig.  That takes years to unteach.  But paying him to leave will be cheaper than court, so if you can do that, do it.  I suggest you give him 10 days; if he is genuinely mentally unstable, he will melt down and might do something crazy like buy another cat.   Put it in writing so he is comfortable, and don't give him the money until he has moved out.  Please do not give him money unless he is out and the key is in your hand. 

Sorry, you have to deal with this.  It is good to hear nightmare stories.  This business is not all roses.  Good luck.  Be kind. There is no reason to be overly critical. You just want him out. 

My brother lives in Milwaukee, is an agent, and has been investing for years.  He does not use anyone near him.  An accountant can live on the North Pole and still do your accounting.  I have gone through 5 accounts ranging from single guy to big 8.  All had pros and cons.   If you want someone who specializes in Real Estate.  Use James @ stonehan.com he is awesome and has saved me a ton of money.  He also is a very active investor.  Tell him Matt sent you.  

It depends on how short you are.  When I was young in the game.  I used credit cards all the time.  Dave Ramsey would not be pleased, but he went bankrupt investing in real estate and is only rich because he tells people how stupid he was all day.  For some reason, people listen to him.  Generally, you can get a card that offers 0% for transfers.  So charge up a card and transfer it.  You can get a car loan on your car or truck if you have a nice car with no debt.  Do you have any other assets you can borrow against?  If you paid cash for the foreclosure, you can get a construction loan at a local community bank or credit union.  These relationships are essential to establish.  I would probably not use a hard money lender.  

Home Depot generally offers 6 months interest-free, and  Lowes probably does as well. But there are a ton of cards out there, that officer. I glanced, and I saw that Wells Fargo and Citi Simplicity have a 21-month offer.   That was just what AI said.