All Forum Posts by: Tim Johnson

Hi @Parker Shoaf,

If I find a good deal for an investor....I usually have the expectation that the investor will then at a later date use me to list it - whether on or off-market. I don't assume that.....but I usually have that conversation with them. Obviously we will negotiate a listing fee that would be a win-win....

I also take as a given that that same investor owes me no specific loyalty or obligation to always use me....and in fact, will probably use other agents to list properties that came their way via those other agents.

Investors generally love working with agents that can find them deals - we agents love working with investors who are on the move and actively buying - and that often will lead to relationships that are pretty constant - although not exclusive in any way.

Hey @Michael Cavitolo,

They're both fine - the FHA will generally come with more closing costs and fees over the long haul....and as you point out, PMI. But it's the right ticket to get you going if you're just in trouble for the downpayment.

I would go with the conventional. Although, be aware that in MOST cases, the PMI still applies for the first couple of years.....and at least until you have 20% equity.

And yes, the lower the mortgage payment and longer the terms (30 years) the more breathing room you'll have as a landlord and potential for cash flow.

Hi Doug,

You could put a mortgage on each of them, and take out approximately 75-80% of the market value of each home in cash. Make sure your properties will cash flow at present market rental rates while leaving plenty of margin for repairs, capex, vacancy, taxes, insurance, and any other expenses (owner-paid utilities, management, etc.)

HELOCs can be an option for cash but in it sounds like what you really need is a long-term (30-year) fixed rate interest that will give you the best chance for sustainability and cash flow. Best wishes!

No correct answer for that. My personal preference would be to start with a bit more turnkey property in an A or B neighborhood, especially if you’re out of state. To do considerable work on a home prior to renting will require trusted partners on the ground and that may take a bit more time to build such a team. Or, if you have the bandwidth, try one of each, and then compare the numbers and the experience. 

Many investors - especially those that continue to grow - and have substantial capital to invest - will move beyond the "10 allowed mortgages" through the use of blanket mortgages or commercial loans (e.g. moving into the 5+ unit apartment buildings.) Don't get too caught up with the "barriers" at this point....you're in good shape to jump in and get started. Good luck!

Hey @Bradley Whiteside - private money can be very helpful but is generally more expensive and most useful in short-term situations like bridge loans, a 3-6 month flip, etc. Just my 2 cents - but I would definitely go for FHA / 3.5% down or conventional / 5% down over 30 years. That way you can jump into a house-hack and within a very short time move on to the next property with hopefully good cash flow on the first one.

Trent, thanks for updating..... I'll be honest, the margins feel pretty slim...biggest pluses are a turnkey house and $20,000 of reserves. Biggest minuses would be use of HELOC (since you won't have a chance to pull any "value-add" cash out of this house).... and only 20K in reserves.

A few final questions I would consider: 

Does "un-official" retirement community mean that you could rent or sell to anyone? / What's the area like? Stable? Any population growth? Appreciation in home values? Near companies, hospitals, etc.? i.e., good area for rentals?

Sounds like you have a good handle on the numbers. Run them again with real dollar signs....and then, hey, this could be a great opportunity. Or....you could stick to your decided criteria and pass..... For me, in the end it's important to have a plan that allows me to sleep well at night - meaning reasonable risk and a solid exit strategy. 

Hey Trent, not quite enough info for this forum to be of much help.

Does the mortgage payment include taxes and insurance?

Do your numbers take capex, maintenance, vacancy, management, etc. into account?

What is the market rate for rent?

How is your HELOC structured?

This could be a good and reasonable situation - just a bit hard for us to tell or offer helpful thoughts..... 

Hi @Kasie Hays, you didn't mention whether you're buying the home with cash..... or taking a note out for that amount. Typically, once the sale is recorded, you should be able to finance (or refinance) at 70-80% of appraised home value - not the full 240K (if that is the appraised value). This of course assumes that you are credit-worthy and have the income to procure such a loan. Sounds like a great start!

Hi @Cait Sierra, welcome to the BP forums! Your education will come to you over a long period of time....some of it through quick intake - reading, podcasts, videos, etc....... and some of it through experience that you'll naturally gain as you begin.

The best thing I can suggest is to simply click on the word "Education" at the top of this BP page. You'll be amazed at all the great suggestions on what to study and where to begin. Are there lots of other sources? Of course, but this will be a great start.  Best wishes!