All Forum Posts by: Tyler Warrick

 Appreciate you, @Josh Mac! I owe a lot of my success to that college roommate who was tired of renting -- without his push I would have never been exposed to this world. 

As for the accumulating capital and saving large sums of money -- this is the million dollar question. I work in sales, so the harder/smarter I work directly influences how much money is in my bank account. I understand that many others have a salary and can't necessarily work harder at their job to get a +$10-50k month. For those people, I urge them to find a side hustle that can help supplement that. 

I see a lot of narrative around, "cut your costs, eliminate unnecessary expenses" etc. I don't think saving $5/day on Starbucks ($1800/year) will help most people save for a down payment in a reasonable amount of time. I recall a client early in my career who worked their neighborhood for cutting grass/washing trash cans who saved up $15k in a year from that alone. I think it's best to be creative in how you can "earn" money instead of "save" money, as it'll 1) accumulate quicker and 2) teach a valuable skill.

Hope that helps!

 I see, and agree. OP should define goals more specifically if they want more direct answers. The current state of the question will get broad answers.

Congrats, and welcome to the rest of your life (haha)! If you feel confident in running numbers, I would say your first step is to reach out to various wholesalers and get on their distribution list. They will inundate you with opportunities and I would study those deals and work the numbers how you see fit. Do this for a couple months so you can feel confident in your decision when you are ready. 

Do you plan on doing the work yourself? Hiring a GC? Start networking with the people who will help get the job done. Your wholesaler will 100% point you in the right direction to get started if you are feeling overwhelmed. 

Reach out to a lender who can do Hard Money/Private Money (I can do this if you are having issues finding someone you trust). With this being your first fix and flip, you'll want to ask a lot of questions and truly understand what the Hard Money/Private Money loan looks like. 

And probably most importantly, figure out your exit strategy FIRST. Know what you plan on doing with the property before you buy it. The money is made on the purchase, not the sale (believe it or not). 

 Are you referencing cash on cash return? Or simply cash flow? Two different things for sure, but want to clarify what your point is.

Well done on the $100k saved up! Unpopular opinion, but Texas. I have more clients from CA either moving to TX (saving on state income tax) or purchasing rental properties in TX than any other state.

The state does come with it's headaches (cash out refinance rules, higher property taxes etc), but there is no dispute in the growth in various cities. I don't care what your political affiliation is (believe it or not this comes up a lot with my investors), but a LOT of people are gung-ho on Texas as a state and lots of businesses are migrating there as well.

Strategies can include buying properties near: major businesses/plants and colleges. There shouldn't be a shortage of people who have money and need a place to live. 

Pretty unique situation here: Purchased my first home because my roommate was tired of renting. We were college roommates and life long friends. We bought our first home together (eek), but it turned out great. The day after closing on the home I quit my job and got into mortgages (my lender was also a friend from high school and made the process so incredibly simple). Was blessed my past skillset allowed me to do great. My buddy who I bought the home with got engaged, I bought him out of the property via refinance. Took out a HELOC a couple months after and was able to save the entire time (both because we split rent, as well as the commission I saved up).

House hacked and purchased a few other properties with the mindset of always taking out a HELOC 6 months before I planned on moving.

Capital is the way to move ahead in this world. You don't have to skip the daily Starbucks to do it, you need to focus on how will you save large (3.5-20% depending on route you go) sums of money. 

 Love this. As a house hacker, it is amazing to purchase the home and 6 months before you intend on purchasing the next home to get a line of credit. This doesn't mean you have to use it, but the "oh ****" fund comes in handy if the wrong renter/life happens. I'm sure most financial advisors would second this.

Depending on area and how quickly a home can be rented out, I think 3 months is very fair to have in actual reserves. If no line of credit is established, I would personally go closer to 6 months.

However, if someone would rather purchase rental properties (instead of house hacking) I think it depends on goals. I have clients who only care about cash flow, and I have others who focus on long term growth/appreciation. Unpopular opinion: I think this question should be answered by Financial Advisors instead of Lenders (and that's coming from me, a lender).

New real estate (regardless of property type) is a good thing in my opinion. Let's face the facts: some people don't want to put in the effort to make their home look updated. New builds solve that problem. It also poses a great opportunity for those willing/able to put in the work (and money) to renovate the older homes. 

 I can't second this enough. @Sheryl Sitman definitely knows what she's talking about. Most people (in my opinion) get ahead of themselves and start future pacing by picturing their life as a landlord/real estate investor 15 years from now. The first step is education, and THEN you should invest in a property. 

Hey @Joseff Stevenson, congrats on the first post! Asking for help and putting yourself out there can be one of the hardest things to do. That being said, House Hacking is such a great way to start and choosing a multi-unit is something I would have done if I can go back in time.

Good news: Illinois is NOT a community property state, so getting married won't hold you back (if you want to put the mortgage in either of your names individually).

Easy way for you to calculate what you'll be qualified for: (Gross monthly income) x (57% max FHA DTI Ratio) - (Minimum monthly debt payments that show up on your credit report) = Max Mortgage Payment you can "afford". ***If you are looking at mutli-units the fair market rent for the other units can offset your mortgage payment, but cannot go over and above it.

That being said, the FHA program is going to be your best loan program by far. 3.5% down payment vs 5% with Conventional loan programs. Additionally, you may qualify for FHA Down Payment Assistance, where it's truly a grant and NOT a silent second mortgage (avoid these at all cost, in my opinion). Added benefits of FHA Programs: if you qualify to purchase the home, after you make six on time payments you'll be eligible for a FHA Streamline (feel free to look these up, but the gist of it is: if the market drops 0.5% for mortgage rates you can refinance without an appraisal and without income verification).

Advice: Start reaching out to Real Estate agents in your ideal area and be transparent. Let them know your timeline and ask them to start sending you properties (yes now). You'll start looking at properties and studying the market. Keep your focus on how much a property is listed for, how long it's on market, and what it eventually sells for. Once you start doing this for 6 months, you'll be very aware of your market.

Advice that you might not be able to implement: Weddings are expensive, and most people I talk to say they wish they would have spent the money a different way. My wife and I did an Adventure Elopement, where we took a road trip up to Montana with an Adventure Elopement Photographer and got married on Glacier Mountain. The views were stunning, it was just my wife and I (and the photographer), we got amazing pictures, paid a fraction of the cost -- then we had a party after our honeymoon and celebrated with friends and family (much less expensive as venues didn't see this as a "wedding"). Again, you might not be able to implement this if your wedding is in September -- but I'll just share it for you to ponder.