All Forum Posts by: Megan S.

Hi BPers!

I'm pretty new to BP and REI - thought I would share some information about where I'm at and what my goals are, and ask you all: what would you do next if you were me?

About me:

I own one SF home in Portland, OR that I rent out as two units (there is a separate basement apartment, but it's not technically an ADU. Utilities are not separate). My mortgage/taxes/insurance payment is around $1666/mo and I net $1815/mo on the property.

I purchased the home in 2013 for $335k with 10% down (+ a mortgage interest lump-sum payout of around $4k) at 3.75%. I'd estimate the house is worth about $470k now and, according to my lender, I have approx $194k of equity in it.

I also have about $60k in savings to put toward the purchase of an additional property (or, hopefully, properties!).

I have no W-2 income right now (living off my earnings from the one rental unit while my partner and I travel).

I've been pre-approved for a loan up to $400k for the purchase of my next investment property, at 4.5% interest (but haven't shopped that around - I was surprised I qualified at all given I've had zero W2 income for the past year!).

My Goals:

I'd like to eventually own 5-10 properties, and net around $6500/mo on rental income.

Some ideas for next steps:

1. Buy another (cheap) house in a promising spot, preferably something with two rentable units at ~200k. This would, however, swallow the bulk of my savings between a 20% down payment and closing costs, etc. I'd find something that I can put some sweat equity into, but hold it for the short or long term.

2. Build on to my existing house and add another rentable unit. Rents are pretty high in Portland - might make sense to take advantage of that.

3. Buy a fix n flip, hopefully earning me some more money to invest in additional properties.

4. Pool money from friends/investors for down payments on additional properties.

I would love to hear your thoughts and suggestions!

Thank you!

The units are not separately metered. The tenants pay utilities - they just split the total cost among all renters. 

Hi @Taj T.! I'm new to BP (and REI) - I own one home in Portland, bought in 2013. Just thought I'd chime in, as I sought out and bought a home with an already finished, semi-separate, basement apartment, which I've been renting out since I purchased the home.

I now rent the whole home as two separate units, even though the downstairs tenants share a back landing with the upstairs tenants (i.e. they can't "lock out" the upstairs neighbors) and the tenants all share the downstairs laundry room. 

I've had great success with the basement unit - if you want to chat #s, feel free to PM me!

hey @Thomas S. - could you elaborate on your first sentence? He's got $800/mo positive cash flow, as I figure it? And $1350/mo for a $170k house doesn't seem like a horrible rent to value ratio. But I'm a noob - so I'm probably missing something!

I'm in the same boat as @Brian Garrett. I have one rental property (was my primary residence before I started traveling long-term) with a positive cash flow of $1900/mo. But that's my only income right now, and it's nowhere near enough to qualify for a loan. Any suggestions for finding lenders who would consider financing another sf or mf property if I can prove the numbers are there?

Thanks, Shella! What happens in the scenario the borrower can't find a bank to refinance? How does one mitigate against this risk (i.e. if I was going into a deal as the borrower, what factors would I consider when determining my chances of successfully refinancing)?

Hello, BP! I'm a new member - this is my first post. I've recently been diving into the world of real estate investing, trying to familiarize myself with the terms, different financing options, etc.

I have a question about the strategy I've been reading about wherein one gets a private lender for a short-term loan (say, 1 year)  at a high interest rate (say, 12%) and then refinances the home to pay off the lender at some point during that year.

I assume that a) the borrower is going the private-lender-route because he/she can't get a traditional bank loan and b) when the borrower goes to refinance, he/she is seeking a new, traditional (i.e. bank) loan.

My question is: if the buyer couldn't get a bank loan to purchase the house in the first place, can he/she count on a bank being willing to refinance after 1 year? Is it much easier to get refinancing than to get an original mortgage loan?

Thanks!