All Forum Posts by: Paul Crosby II

Hi there!

This is going to be a bit controversial but i would suggest avoiding direct ownership of real estate all together if someone wanted to get involved with little money.

I would suggest starting with renting an apartment that does not have sublease restrictions and test out short term vacation rentals (market dependent). This will allow you to take advantage of cashflow, taste landlord life and not put much of your own funds at risk for your education.

If you could get good at this and scale it has a couple of benefits.

1. You build a portfolio without sizeable cash investment
2. With rental history being included in mortgage and credit report scores, you can profitably build your credit.

3. You can learn about typical repairs and network with future handypeople since the apartment complex usually has someone come out

The other suggestions listed here are definitely solid and would highly consider. If i didnt have a mortgage currently and didnt want to be tied down to a property i would consider the above

Hope that helps!

Hi Navraj!

Columbus is awesome...but im definitely biased. I have had personal success buying in the Hilltop area around your price range.

Usually 1940 built homes with slab basements that can be sold later for high 100s or low 200s.

Hope that helps and thanks for investing in the best city in Ohio.( Cleveland is cool too)

Hi Ryan,

@Kevin Sobilo is absolutely correct as this was created to protect retail investors who dont have the reserves.

There are tons of syndication companies out there like Fundrise and the like. A simpler method for you would be partner with another investor or someone that has assets to be consider accredited on a deal so you can borrow their assets and they can benefit from your liquidity.

Hi Britt!

First off, no matter what it is always great to have good personal credit as it does impact things like insurance rates and HELOC rates which could impact your cashflow going forward.

You have a 45 day window from the day of the first mortgage inquiry to shop for mortgage rates without having subsequent mortgage inquiries damage to your credit profile. This is for homes only and does not pertain to autos and such.

In regards to keeping your score high, you would be best referencing Experian's website on how your credit score is determined.

Easy items are : Keep credit card utilization below 30%
avoid new accounts and let accounts reach 5yrs+
Have a mix of installment, revolving, auto and mortgage history
No missed payments, collections etc

Excited to see where your journey takes you!

Hi Ye'Chiya!

Im curious if you could explain this a bit more because it sounds like you are saying you have his W2s but they are not the correct ones?

W2s are used to prove income history and stability in the case he is using commission income or bonus income to qualify. If you have any W2s for the past two years and he is currently making more than you on a salaried or hourly basis, you should be able to proceed with a standard conventional loan.


Example: His boss incorrectly stated he was making $40k for 2020 and 2021 and he is currently employed at a position making $75k salary. The lender is going to use the current paystubs and income versus the W2 stated income.

Hi Scott,

Sounds like you all are doing great work helping someone avoid the foreclosure process.

I dont know if you tried this already but have you called the lender and asked if you could assume the current mortgage?

This is not always likely but it might net you the house and title without all of the headaches while requiring less funds.

Otherwise, i would agree with the others that HML would be best if you cant make owner occupant work.

Hope this helps and good luck!

Hi Travis.

You would have a couple options here speaking as someone that does residential lending.

If you business generates income then you could look to take out a commercial loan on the property and work with it that way. Usually this will require your business to have 2yrs history complete with tax returns, Profit and Loss etc.

Otherwise, i do know of lenders that will utilized cash flow and statements without a personal guarantee however you are looking at significantly higher interest rates which would adversely affect your cashflow since they operate outside of QM guidelines.

Lastly, you might want to consider crowdsourcing this deal as well since current interest rates are in the 6s and you might be able to offer a similiar return to retail investors/crowdfunders.

With your score as high as it is, why not secure the property in your name and then refinance it into your business's name once you have the income and credit established?

I would say it depends on your score and what GSE your lender sends the loan through. Freddie Mac will, under certain circumstances, allow the use of 1 yr of self employed returns assuming you can justify your income and show positive factors. You can Google "Freddie Mac self employment guidelines" if you want to read them for yourself.

Dont give up, you just have to get a little creative and put your writing hat on.

Hi Charles,

I would suggest you look to buy the property from your dad and forget about student loans. You can use a conventional loan and have your dad gift you the equity in the property so that you dont come out of pocket with the 20% or you can use FHA to reduce your cash outlay and only need to come up with 3.5% if you occupy.

Student loan calculations for lenders are actually pretty generous. Usually 1% of the total balance if the loan is deferred and sent to Fannie( in your case a $430 DTI hit) or .5% if you send the loan through Freddie or go FHA ($215)

Buying the home as a residence would probably allow you more options than trying to acquire it as a commercial building since would likely get a longer loan term and such.

Congratulations on your first deal it sounds like!

I would say it would depend on future legislation.

There seems to be a political appetite for increased regulation and reduced profits for lenders and landlords.

Hoping we dont get to that point