All Forum Posts by: Richard Queen

I'd also highly recommend the HELOC method. I use it personally and it works great. On my personal residence as well as any investment properties - when I get them free and clear or a lot of equity, I put a HELOC on them and use that as the down payment to purchase other properties. It's a great strategy and then you don't have to worry about cross collateral. Many times, you can get a HELOC set up with very little cost to you as well. The last one I did, the bank covered the cost of the appraisal.

How to Invest in Real Estate: the Ultimate Beginner's Guide to Getting Started by Josh Dorkin and Brandon Turner.  The Book on Rental Property Investing by Brandon Turner.  Retire Early with Real Estate by Chad Carson.  All great.  And I wouldn't do anything until you've read Rich Dad Poor Dad by Robert Kiyosaki. Enjoy!

Instead of talking to a specific company, I'd recommend talking to a broker as well, who can survey multiple companies and get quotes and find you what you need.

While I appreciate your questions, there's a reason you've seen no responses in the last half hour when there are so many active participants.  All of your questions have answers and all of them are in these forums and on the podcasts.  We can't lay out your future.  Ask some specific questions.  Dig in.  Do some work.  Listen to the podcast.  It's going to take a lot of work and effort to be successful in real estate so start with your research.

That being said, yes, I have an accounting degree and began a very successful career in accounting starting out as well.  I've done many things since then, including CFO of a large multi-specialty physician practice.  I've been building my real estate on the side along the years and I plan to only be in the office one or two days a week by the time I'm 40 - currently 36 - with rentals more than making up the difference.  I love what I do at work so I don't want to drop it completely.  I love real estate as well so that gives me the best of both worlds.

Find parents, partner, etc to help you with a down payment and get a small multi-family like you said and start building experience and income.  All your questions can be answered with a little digging.  Check out all the books published by Bigger Pockets as well.  They'll walk you through every bit of this.  Good luck!

Keep shopping other lenders. For 4-plex or less, you should be able to find a lender that keeps it on the residential side of the loans, rather than the commercial side, giving you better rates and longer fixed terms. For that property, you should be able to find a lender to do 80% LTV with 30 year fixed at 5% + or - 0.5%. I just secured one myself. My personal recommendation is to keep them in your name so you can get this type of lending and then, like you said, carry appropriate liability insurance coverage. I would also recommend a minimum $1 million umbrella policy as well. You can pick up a $1M umbrella for $300-$400 a year in premium - well worth it. Hope that helps some. Good luck!

DTI falls into "front-end" and "back-end" calculations. As an investor looking for more rental property, you'll primarily be concerned about back-end, which is what @Scott Passman shows you how to calculate above.  Most banks will want this number to be at or below 36%.  Once you begin approaching, or hitting this number, conventional leverage may be harder to obtain so you'll want to look toward seller financing deals, private money, partnerships, and other creative ways of financing.  Good luck!

@Esmeralda Guerra sounds like you need to find a lender who understands investment property. My lenders don't look at tax returns to calculate dti. They look at gross rents, debt payments, etc. Also calculate your debt coverage ratio and show them that. Calculate your own numbers and show them. That always helps and it also shows that you understand your business and the numbers.

I thought the whole point was to show as little income as possible on the tax returns! Haha

I agree with the others. I just bought a vacation cabin in the Smoky Mountains and only put 10% down but it's cash flowing because I knew my break even points and occupancy numbers. Buy or don't buy shouldn't have anything to do with how much cash you put down. Vacation rentals can be great investments though. Good luck!

I typically do first months rent and deposit equal to one month rent. Must have it in hand before keys are exchanged. One thing that's really helped too is the way I collect this the first time. Say rent is 750 do it would be 1500 to move in. I require a 100 check and the rest cash. This gets me my cash up front but also gets me there checking account info should I ever need it. I tell them why too so if anyone has a problem with it, I don't want to rent to them anyway. After that, I set up cozy to collect with no effort on my part.

Thanks for posting!!  I've been on their website multiple times and wondered what reviews would be like.  I'll take a solid look now.