All Forum Posts by: Ryan Howell

Looks like a solid deal to me.

@Dustin Zenz - The 20-25% down is based on Fannie Mae guidelines for 1 or 2-4 unit properties, non-owner occupant I believe. You're typically going to have something similar from commercial lenders as well. The trick is to get your money back by buying a property below market. In the first 6 months (could be 12) they will loan up to lets say 80% of the lesser of LTV or LTC (loan to cost i.e. purchase price), if that's significantly lower than LTV because you got a good deal, then refinance out of it in 6 months and recoup your investment.

I would say yes. I've gotten a couple listings from FSBO's and Expired leads in the last two months. Nothing from Geo yet, but there are a lot of leads I'm continuing to follow up with, their just not as "hot" as expired and FSBO's to they take longer.

I would say to get real clear on your goals.  Decide where you want to be in 5 years, then align a strategy to get there.  

I agree, you don't want to wait on a market crash.  99% of people who wait to do their first deal when a market crashes probably won't have the confidence to move forward when all society tells them real estate is a bad investment.  If you have a deal or two completed, you will then actually have the confidence to take advantage of the market crash, that's my opinion at least.

As far as the house you own...do you want to live there? If not, sell it and use that cash to start investing. If you do want to stay there, take out a HELOC to access that equity and then start investing.

As far as strategy, I would consider house hacking or BRRRR. If you can live for free anyway, then house hacking may not be as beneficial.

Are they telling you they can't loan on it or just not being responsive? Loan officers in our area have triple the normal workload right now due to the low rates and are less responsive than most. If they are telling you they can't, then ask why. Is it because its not on a permanent foundation? Is it your DTI or reserves don't meet their criteria? Once you understand that, then you know if you need to adjust your strategy or find a different type of loan option.

@Brandon Ribeiro - I've been using Redx for a couple months.  I really like it.  If you're willing to put the time in you'll get results.

If this is a traditional loan, they will all likely have a 6 month seasoning period, after which they will loan on LTV, beforehand it will be the lower of LTC or LTV. If it is a commercial loan, etc then it is more lender specific, but it is common that the seasoning period is 6 or 12 months.

So unfortunately, our expenses really don't matter in regard to what the rent should be.  For example, if taxes went down, I suspect most won't lower the rents, unless the market rent is also going down.  At the end of the day all that matters is what your current tenants are willing to pay, what your vacancy costs will be, and what a new tenant will pay...Personally, it depends on the individual tenants.  I have not raised anything during COVID.  I already had some vacancies that took a long time to fill.  

If I buy a property with rents way below market and I have to raise rents, I will immediately inform the tenants of what the rent is going to and try to give extra notice to them so they can move out if necessary.  Otherwise, once I get a new tenant in place, I don't raise the rents until they move out.  I think there is a good argument either way, but for me, once they've proven they are good tenants, I do what I can to keep them.  If they are comfortable and the rent is slightly below market, that well outweighs the vacancy expenses if they leave, especially if you factor the costs of getting another tenant of that same quality.

Nice work!

This is very common.  First, I would say its most important that you are on the same page and are doing things you are both comfortable with.  When we get into real estate investing, we all typically gravitate to a specific niche and strategy based on our strengths, goals etc.  When you have two people in the equation, you have to factor in both people's goals/strengths as well.  Maybe she will change her mind on debt, but if not, assess together what it is you want and figure out a strategy together that works for both of you.  Maybe that is buying a small rental all cash to start with or putting money into a RE fund, etc.