All Forum Posts by: Account Closed

@Eka Linwood conventional 5% is for single family only.

There are several lenders who can do 3.5% FHA on a 3-4plex. Keep searching, they are a dime a dozen.

@Ryan Bird

Poorly run government, extremely high property taxes, mass exodus of people.

Real estate prices go up when demand is high.

I have cousins who own $600K houses in Palatine where the property taxes are $25K/year. That is utterly ridiculous, and I live in California :)  

@Jaz Ram I do not know why any legitimate attorney would help someone broker real estate without a license

@Trent Jackson why are you looking to leave CA? The new rent control laws don’t apply to your houses unless they’re owned by a Corp.

Even then, you should stay. Rent control has caused values to skyrocket. Look at SF, Berkeley, San Jose, LA, NYC. Rent control for decades. Most expensive real estate in the country.

@Kyle Phelps brotha you don't need an LLC. Like @Jerry W. says you need good insurance.

I drank the LLC "kool-aid" when I owned 20 houses in Detroit under 20 LLCs. It was stupid, expensive, and time consuming.

Even now with close to 40 units in CA, most of it is in my personal name with a $5M umbrella policy.

Everything Jerry said was correct, except that CA is broke. Very large budget surplus my friend! Perhaps they can lower the taxes now :)

I had the same problem you did but then @Chris Mason coached me on how to structure my tax returns.

50% DTI is very achievable if you're honest with the tax man. Lenders add back in depreciation so no worries there.

The issue is that you want the bank to take your word for the income, rather than the tax returns. You need to pay some tax in order to keep getting loans. As long as you keep buying good cash flow properties and are honest with the IRS, you will have no issue getting more Fannie loans. 

For multi family it's all about the DSCR. But for 1-4 units it's all about the global DTI. This is one of the reasons why I only do 5+ now

@Jack Okada to be blunt you don't have $500/month in cash flow on the SFR. What about insurance? Vacancy? Maintenance? Cap-ex? This is why the bank doesn't want to count all of the income. These are real expenses to operating a property, even if it doesn't occur monthly.

The bank isn’t calculating a 25% vacancy rate. They are subtracting 25% from your gross to account for the items I stated above. 

the issue is that your monthly obligations are high. You are only disclosing the balance of your loans, but it’s the monthly payments that’s crippling you. 

Like @Shaun Weekes said, you can’t have your cake and eat it too. Show more income on the tax returns and banks will come flocking to you 

Landlord Locks all day. Expensive but have never given me an issue 

@Monique O'Dell Cash Flow Quadrant changed my life. I regularly give it out as gifts

@JC Wu of course there is a catch. If it were easy everyone would do it. Unless you’re willing to put in work, you won’t succeed here.  And it doesn’t need to be broken foundations or complete gut jobs. 

Most people here venture to OOS because there is literally no barrier to entry there. Anyone can drop $50K on a house there.

There are several locations here where you can add value and make a lot of money, both with cash flow and appreciation. Think Oakland, Vallejo, Richmond, Stockton, Sacramento. And I’m talking mainly Multifamily, not SFRs. 

You’re much better off taking @David Song to lunch and pick his brain for an hour rather than poking holes in our local strategies. Just my .02