All Forum Posts by: Matthew Perry

@Scott Lennon every thing seems really hot in the two AZ markets I’m in. But things could change fast especially once the eviction moratorium hits or if layoffs increase.

@Mike Smith I have done it on day of closing but never prior.

@Matthew Lessard I love Prescott. It is a fun town, with a lot of outdoor options and a great place to live. They have a lot of Multifamily options near Prescott. Rent rates have been comparable with my other units in north Tempe near ASU even though property prices are ten to twenty percent lower.

@John Simerson I would hold for a year and see if they could cash flow after refinancing. Especially if you haven’t held the property for at least two years because you wouldn’t want to sell without getting capital Gains.

@Joseph M'Mwirichia thank you. :)

@Robert Johnson they should give you credit for three quarters of the prospective rent. You could also do a lease for your current place a month or two out if you know someone who’s willing to take it over after you move and see if they give you credit for that. You could also if it’s two bedroom units in the fourplex get a roommate for one room and get a signed lease for that to increase your income.

@Andres Vanegas there are a few exceptions like if you have to relocate at least 100 miles for work. But in most cases, yes that’s true.

@Tyler Gerhold I faces a similar challenge when I first began. I was able to find a duplex. I would expand your search criteria to duplexes, triplexes, houses with a guest house, or houses that could be converted into a duplex.

@Nicky Gonzalez in my experience twenty-five percent down is a requirement for investment property loans.

For the six months or so I was stuck. I had saved enough for a five percent down payment for many of the properties I looked at, but because I already owned a property with an FHA loan, I needed to save at least fifteen percent to acquire a Multifamily property. I could have bought a house or condo. But I was hesitant because I am nervous about lifestyle creep and an expensive liability if I bought a large house. I also wanted to scale up faster, and buy at least two units.

I reread one of my favorite BP books: Ben Leybovich's House Hacking. In that book Ben talks about how you can buy a house with a guest house on it with a five percent down conventional loan. In it he talks about several House Hacking Strategies. The HOA I'm bought into doesn't allow abnb, but if you do acquire one that does, there could be even more profit and cash flow opportunity. Although also different risks too. So I used that guest house strategy and got preapproved for a house, but limited my search criteria to those that had a guest house, so I could acquire two units.

I found one I liked, and started with a lowball offer of 50k below asking price and closing costs. We settled at 30k below asking price and they paid closing costs. This was at the height of the Covid panic, which helped me because I was able to get at more that ten percent discount on the original asking price. I was able to acquire my fifth property, which will increase my monthly net cash flow by 200 a month.

If you feel stuck, and feel like trying to save for your next property is taking forever, I would recommend reading Ben’s book and utilizing that house/guest house House Hacking strategy.