All Forum Posts by: Nathan Grabau

I think the key to any expansion of debt is the ability to leverage the cash that you get. At 3-4%, it was really easy to be able to out earn that in almost anything. At a 6-8% rate, it is a little harder to out earn the interest you are paying. That being said, there are tax benefits to the debt, and often having dry powder so you can take advantage of deals/ opportunities in the future leaves you better off than if you had a paid off property. 

Your VA loan will come down to your VA benefit use, 2 is pretty normal in lower dollar markets, 3 is pretty uncommon. Normally it is just 1 FHA loan. You can have then up to 10 total loans that are conventional that you put 5% down with, that are your primary residence for a year. The 2 VA's and 1 FHA would count towards the 10 conventional loans, so 7 more. If you can qualify for a convention loan with 5% down, and you are only looking at a 1 unit property, that is your best strategy over an FHA loan for property number 3. This also saves your FHA loan for a MF property.

This is a good call. The tenant's renters insurance should help with any other costs they have. 

I am not a CPA, but you seem right and they seem wrong. You met the 2 of the last 5 years as a primary rule to avoid 250k of cap gains per person. 

I want someone who owns property themselves. The most ideal back story a property manager can have is they were managing their units and decided to help other people with the systems they use. I am still willing to use someone who went the other order, property manager turned pm + investor, but this is less ideal.  

I just looked up our February MLS data in Longmont, Colorado and our average sale price is almost back up to our spring 2022 high's. It looked like things could get hairy going into the back half of 2022, but the lock in affect along with buy downs has prevented the inventory build necessary to have supply outweigh demand. Every day I am seeing homes that went live and under contract in Jan/ Feb and are being sold for over their list price.

I would talk to a lender about credit repair and getting different metrics that are specific to you in good order. For example, a lot of people pay off low payment student loan debt because the balance seems high, but because you are paying it over a long term the payment is low, before they pay down debt from a car, which could have a lower interest rate, but since it is for a shorter term, has a much larger impact on your debt to income ratio. 

I would also be mindful of making extra payments on debt that that helps vs debt that it does help. Paying extra on a mortgage is not going to decrease you future payments, while paying down a credit card could reduce your monthly minimum payments. 

If you are going to buy a 4 unit property, you will need to get the loan paid down and hope for appreciation to get to 20%, for conventional lenders. If you buy a 1 unit property, with a 3.5% down loan, you can refi it out at a 95% LTV and free up your FHA loan. This strategy works best with 1 unit properties if you are trying to rinse and repeat quickly.

You are going to make less money selling off market to someone who is contacting you like this than you would with an agent. The advantage they offer is convivence and speed. If you can wait 90 days, you will almost certainly net more money selling on market. 

No one had confidence in the long term value proposition of real estate coming out of the great recession, so properties needed to cash flow, aggressively, to make sense. Fast forward 10 years and sediment has changed and we see that due to under building, housing is becoming scarce, and appreciation is going to take place in desirable places where people want to be.