All Forum Posts by: Sam Hudacek

Hi John!

I would definitely advise running the numbers as if you did not live there. The reason being is because you will not live there forever and if you plan on holding that property for 5-10 years, you need to run the numbers as if it was fully occupied with tenants.

If the numbers make sense with a fully rented out property, then they will most likely make sense as if you lived there. Even if you're breaking even or cash flowing negative a little, with you living there and not haven't a full mortgage payment, that's already a great position to be in.

hope this helps!

I would recommend using an LLC but I also wouldn't stress about creating one if you're preparing to buy your first property. LLC's come with one time fees and annual fees, they will require a little more paperwork and they don't actually provide any major tax benefits. The biggest reason would be for liability purposes, it does not mean you cannot get sued it just means that if you do get sued, and they win, they can only take from you what is in that LLC.

I would highly recommend speaking to an attorney as well as a CPA, but it is totally okay to start an LLC after your first or 2nd property, I wouldnt make it my priority for just one property.

Lastly, once you acquire more properties, you will likely need more LLC's, and when it comes time to deciding which property goes into which LLC, spread them out according to equity. Afterall, a tenant will likely not want to go after you when you have very little equity in the LLC.

Hope this helps!

Welcome! BP is the best site for information and tools to help you start your RE journey!

To start off I would recommend doing plenty of research before pulling the trigger on anything. I would recommend buying The Book On Rental Property Investing or The Multifamily Millionare Vol. 1 both by Brandon Turner. Rich Dad Poor Dad by Robert Kyosaki would be a great read as well. Once you feel pretty comfortable finding deals, analyzing a property, learning how to manage etc. Then I suggest you start by house hacking, which would be purchasing a single family home and renting out a basement / room or a multi family property (2-4) units.

House hacking will help you eliminate your mortgage partially or fully by havint the other tenants pay rent, teaches you how to manage a property, manage/screen tenants, and really just gets your foot in the door.

The best thing about house hacking is that you can use an owner occupancy type of loan such as the FHA or VA. You won't need much money up front so the risk would be limited.

If you have more questions feel free to message me! Good luck.

Will be there!

I dont believe FHA will take that future rental income and count it towards your DTI. A conventional loan will but I believe only up to 75% or could be lender dependant.

On the bright side, you dont have to tell your lender you will house hack a multi family nor would it change anything if you did, as long as its under 5 units, you are able to use the FHA loan on the property.

Lastly, depending on the lender, once you've lived there for 1-2 years and move out and fully rent it out, typically the lender will use that rent towards your DTI on the next property but you have to have the property rented out for 1-2 years.

The first way using no or little money down would be utilizing the FHA loan, typically you only have to put 3.5% down as long as you are willing to live there and pay PMI. If you are a veteran a VA loan would be your best bet.

As far as other people's money, you can use family or friends to partner up and have them fund the down payment/closing costs, and you can manage the propery and split cash flow by a certain percentage utilizing a promissory note. 

Or you can find a deal and present it to investors, as long as you're confident and the numbers make sense. If they believe they can earn a good ROI then they might be willing to fund the property.

Or you can use hard money lenders or get creative with seller financing.

I would recommend buying the book Investing in Real Estate With No Money Down by Brandon Turner. You will find plenty of creative ways of obtaining real estate with no or little money down. Hope this helps!

 Hey James, I'd love to grab lunch one day and pick your brain on investing in South Dakota!

 Hey Vince! I really like the AZ market, I can definitely see myself investing there in the future, if you're ever down in Sioux Falls you got to let me know!

How's it going BP!

I am fairly new in Sioux Falls, SD, I currently own one LTR and I am searching for more. I have recently sparked an interest in STRs utilizing AirBNB/VRBO. While searching for more multi-family deals, I plan on acquiring my first AirBNB investment property. Anybody in the Sioux Falls area already investing in STR/LTRs or planning on doing so? I am looking to connect with any investors and maybe bounce some ideas off each other! thanks!