All Forum Posts by: Scott Reigns

Hello - can definitely help you out with number 4 - DSCR Loans are really ideal for people in your situation - not quite just starting out (have a couple of properties under your belt), but ready to scale. Check out this 10-part series published here on BP on all you need to know about the financing options and how to scale with debt and best leveraged equity!

DSCR Loans: What Are They And How To Get The Best Terms

https://www.biggerpockets.com/...

DSCR Loans: How To Use Pro Strategies To Save More And Make More

https://www.biggerpockets.com/...

Multifamily DSCR Loans: A New High-Impact Loan Option For Real Estate Investors?

https://www.biggerpockets.com/...

12 Frequently Asked Questions (And Answers) About DSCR Loans

https://www.biggerpockets.com/...

8 More Commonly Asked Questions and Answers to DSCR Loans

https://www.biggerpockets.com/blog/eight-questions-and-answe...

What Documents Do You Need for a DSCR Loan?

https://www.biggerpockets.com/blog/what-documents-do-you-nee...

BRRRR Loans: What Are the Options, and How Do DSCR Loans Stack Up?

https://www.biggerpockets.com/blog/brrrr-loans-what-are-the-...

Short-Term Rental Loans: What Are the Options and How Do DSCR Loans Stack Up?

https://www.biggerpockets.com/blog/short-term-rental-loans-a...

DSCR Loans: Terms to Know When Working With These Popular Rental Loan

https://www.biggerpockets.com/blog/dscr-loans-terms-to-know

What’s Next For DSCR Loans? Updates For 2024 and Beyond

https://www.biggerpockets.com/blog/what-is-coming-in-2024-fo...

you are new to this, you still do not have enough knowledge or at least someone to guide you, so I do not see a reason on why you would jump straight away on 16+ unit deals, it might overwhelm you, start with learning and building a portfolio with a few 3plexes, 4plexes and then scale into 10+ unit deals.

Al, 

You got some fantastic responses above. 

Especially since you're living in the property, your wife's comfortability is the #1 priority. 

Based on what I've learned, in most cases it seems to make more sense to buy multifamily. Obviously this is subject to change based on the micro market that you live in which I have no education on whatsoever. Like Vitality said, doing a renovation can involve set backs where with multifamily the units are already built. 

If you're house hacking, you can take out a 5% down conventional Fannie Mae loan. I have no idea how properties are priced in your area, but 5% down on a $500,000 multifamily is $25k. After considering closing costs (let's use 5% of your loan amount as an example) and initial repairs, you'd probably have $60k of total out of pocket costs. 

That would leave you with $60k in reserves. 

All the best to you! 

Take their offer to refund the entire rent and deposit and get them out NOW. Forget about any pro-rated rent for the time they stayed..... its not worth it in ANY way. Cut your loss now and move on.

Bigger question..... how did you screen these people? That's key to not being in this position. Its sounds like you were really fast on trying to get someone in even before the work was done.... why? Having the work be done and unit vacant for a couple of weeks/month or whatever is WAY better than making a quick, rushed decision on your tenant. Screening is EVERYTHING.....and it sounds like you wanted someone in right away and took the first person that showed you some cash..... BIG MISTAKE. You want the RIGHT tenant.... not the first one that says they want it. $$ lost with vacancy is WAY better than having a crap tenant. 

I also highly recommend MTM leases... for just this reason. Even of you screen really well, you can have an anomaly and get a nightmare tenant. With MTM, you have WAY more power to get rid of them ASAP and not be stuck with them until the longer lease ends. 

@Michael Lee Croxton, since you're based in the Atlanta market, explore the investment strategy of rent-by-the-room. You won't need a course for this. If you're interested, I'd be happy to share additional resources.