All Forum Posts by: Toby Auer

Thanks I’m advance for reading, trying to keep this as short as possible.

I just purchased my second home for 280k. I plan to put an ADU in the backyard that will cost me about 120k. Then it should appraise for 500k. With me doing owner occupied I should recoup all of my money (80/20 LTV).

I have 30k left in the bank, I was planning on getting as far as I can with that and then borrowing from my dad. I just learned from my lender that my dad isn't able to just let me borrow the money to finish the ADU. She said borrowing like that is a no no in the lending world. She said it has to be a "gift".

My question is how do I finish the ADU if my dad can't just lend me the money?

I am also looking for the next off market deal from mailing letters and cold calling. I have 3-4 people that are very interested in selling off market. My plan with those is offering 70% of what the house is worth, then going to get a loan for 70% that way I have no money in the deal.

I am currently laid off for another two months or so, so my lender said I won't be able to get a loan due to my DTI.

My question for this is how would I close on these deals? I hear all of the success stories of people buying multiple properties in the same year but I guess financing is my issue (which I thought would be the easy part). Do I need to partner with my dad or someone else that has a better DTI ratio? Thanks in advance for any advice!

@Isacc Lightbourn

Of course, good luck!

Also I should warn you that entering in every address and then copying and pasting the name, address and number into an excel sheet took most of those 3 days, it was hours and hours of the same thing. There are faster ways to find the criteria you want.. like setting that you want 3 bed 2 bath with no owner occupied, with the owners number available, lot size no less than 10,000 sq ft. etc. I was determined to get it done because I had already spent so much time finding those 700+ houses, and the fact that I had seen them in person, I knew they were houses I actually wanted to buy.

@Isacc Lightbourn

I also use OnX. Then once I got over 700 address I used the 3 day free trial for property radar to get phone numbers as well. If I get a deal from that 3 day trial then I will buy the subscription. A lot of the numbers are wrong people or no longer in service. But out of trying about 100 numbers I’ve had 4 people willing to sell (just need to do my due diligence and get back to them) and another 4 or so that said they will be ready in the next few months to a year and told me to call back another time.

@Phiroze Neville Divecha

Yeah I am. I just bought my second in California, but now I’m looking to venture out to Houston since I might be moving there a little over a year from now.

I am in the same scenario, you beat me to the post for advise. I have a realtor that gave me a few recommendations on areas in Houston to invest in, so today I went to those areas to find out the zip codes. Then from there I used the BP insights to get rent estimate for those zip codes. Out of those 3 recommended areas I saw that for 3 bed 2 bath, 77018 gets the highest rent, followed by 77009, then 77051. Those aren't the same order for a 2 bed 1 bath. I am trying to narrow my search so I am going with the 3/2. I am fairly new to real estate as well, so I am excited to hear what other responses you get.

@Corby Goade

My lease doesn’t say anything about them but since they moved in two years ago having a washer and dryer I would hate to leave them hanging without one now. I’ll try to repair it or maybe have to get it replaced. Not sure if most of my market has them or not, that’s something I’ll have to look into.

@Arsen Atanasovski

Thanks for all the input! It was my first property so my lease is very minimal and does not say anything about washer and dryer. I will be writing a new lease on the first of the year so I can add something in there for washer/dryer.

I still think I will end up buying a replacement only because my tenants are amazing and have been there for 2 years and counting. But your advise helps me for the future markets I invest in or even maybe the next time I buy in my market I’ll consider not having them.

I bought my first house hack duplex about two years ago. It came with an old washer and dryer on my tenants side (which is a 3/1). My tenants just let me know the washer is broken and probably broken for good. I will probably go ahead and find a replacement for them.

Just wondering what you all do for washer and dryer in a rental. Do you charge a fee, not worry about it, or not buy them at all? 

@Steven Wilson

Sounds good, thanks!

Congratulations on being able to quit your job, I just know that due to my house being able to appraise as a duplex made all the difference and I was fortunate for that but I don’t see that stuff happening again. How much cash flow do you have on 3 properties? How many units are they?

@Joe Villeneuve

Great advise. The only problem with the down payment is that I will need 20% down after my next purchase that I use an 3.5% FHA with. Unless I were to live in it for a year and do another FHA afterwards, but I wanted to try to do more than one unit or house a year. I would love to find two BRRRR houses at once just to scale up faster, I just don't want to get short on rehab budget. Unless they are simple rehabs that won't cost a bunch, but in my expensive market I think my only way I'm going to have equity on the purchase is if I buy off market. So I've been driving for dollars and mailing in letters.