All Forum Posts by: Ty Coutts

Looks like you already found some amazing advise @Madison Sloan and good for you to be on here asking these questions in the first place at such a young age! You will certainly go far if you keep up the thirst for knowledge about this.

Hard to touch on anything that hasn't already been said, but when it comes to your question #3 specifically, I would love to know more to help better answer.

How long have you had your small business? Have you formed an LLC or S-Corp?

Most conventional loans that offer the lowest down payment to you will look to have 2 years of this income reported on taxes. There are other creative ways to calculate your income when self-employed, but they would start at 10% down minimum and that may be a bit much since you are just starting out.

However, you can always try to turn that part time W2 into full time just temporarily as you apply for loans or find a different salary position and make life easiest for yourself when getting qualified. We can use school as part of your 2 year work history so chances are you wouldn't need to provide any other proof of past employment either. 

Let me know if this helped and if you have any other questions!

Hello @Dan V.!

What type of property are you looking at in VA? Single family, multi unit, mixed use commercial?

Plenty of different options when looking to vest in an LLC, let me know if you have any questions and feel free to reach out at anytime!

Hello @Skyy Dugger

I would love to help clarify things for you, but I have a few questions about the scenario. 

Are you wondering how lenders calculate your passive income from STR properties that you already own? Or how we calculate potential future income on a property you are looking to buy?

In a very broad sense, for conventional financing you typically have to have reported STR income for 2 years on your taxes in order to use this as part of your personal income when looking to qualify.

If you are looking into more non conventional financing, there are programs that can take just 1 year of STR income into consideration as well as other programs that can even take the previous owners STR income into consideration for your personal future income calculations when looking to buy the property.

Tons of complexity and options when it comes to STR's in the lending world, so hopefully this helps and if you have more questions, don't hesitate to reach out!

I bought this one in early June 2022 but already appreciated 20k which is nice! When did you get your last deal @Eric Yu

@Kyle Spearin, just got under contract today! Another SFH that has a separate entrance to the basement near the old towne Arvada area here in Colorado which is STR friendly. Very excited to have essentially 4 doors in jus 9 months!

I noticed you have done a flip, did that experience go well for you?

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $589,900

Single Family with separate entrance basement and full kitchen downstairs so able to house hack while living here at fixed it up. Successfully just rented the top "unit" out as we move to get our next one and together the two rental spaces will let us cash flow nicely.

What made you interested in investing in this type of deal?

The location of the hospital and surrounding area was perfect for medium term rental of traveling nurses. Plus I knew there was some easy value add opportunity within the home itself.

How did you find this deal and how did you negotiate it?

Waited patiently watching it go off and on the market 3 separate times. Came in with a low ball offer and made the sellers pay 27k in needed repairs that we allowed an escrow holdback for.

How did you finance this deal?

Conventional financing

How did you add value to the deal?

New kitchen floors, backsplash and countertop. New stainless steel appliances. Two bathroom remodels. Painted every wall. New landscaping in backyard.

What was the outcome?

Was able to get enough equity for my HELOC to buy my next place and leave this one fully rented and cash flow positive

Lessons learned? Challenges?

Learned a lot about tenant management, budgeting and design plans

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Travis Beers was our Rockstar agent and of course teammates at Aslan Home Lending helped with the loan!

Hello @Craig Fitzpatrick II,

First of all, congrats on your first Duplex. I think taking advantage of the FHA program for that was very wise of you.

To answer your direct question about personal credit -by putting a home mortgage on your credit almost always benefits your score in the long run. Obviously you have to prove that you can responsibly handle that amount of debt by never missing or being late on payments, but if you are responsibly paying off that debt than it will increase your score.

For your next purchase, you will not be able to use the FHA program again unless you refinance your current duplex into a different loan program as you cannot have more than 1 FHA loan at a time.

However, using Fannie/Freddie as a conventional loan is completely doable. You will just need a minimum of 5% down, and of course make sure all your DTI ratios are qualifiable. Good news is, there are multiple different ways to possibly include the income you are making from the duplex to offset that mortgage cost for your next purchase.

Let me know if you have more questions or would like to talk through the finer points of things as you look for your next one!

Both @Simmy Ahluwalia and @Greg Scott have good points. Scott is correct when telling you that looking at conventional (fannie or freddie) loans as your primary you will not be able to vest in the name of the LLC. You can always quit claim deed this into your LLC later, but the mortgage will always show up under your credit individually.

If you buy it as a "second home" using conventional financing you can vest it in your LLC, but again you are going to be the seen as the personal grantor for that loan regardless.

Simmy has a great point bringing up the DSCR loans which are phenomenal for investment purchases, but the obvious downside is the extra money you have to bring to the table for the higher down payment.

I personally choose to put as least money down as possible always, and care less about them being under an LLC. Beefing up the insurance policy is still going to cost you less then all the extra money you have to put down. There are a ton of different options and creative solutions out there for any financing need, so let me know if you have any questions!

Hello Tyler,

I am also located in Denver and just started my own meetup to accomplish this exact thing! We are finalizing the date for our first meeting, but it will most likely be in the next 2-3 weeks and we would love for you to attend.

What type of partner are you looking for exactly, and what are your real estate goals? I would love to help get you connected with a ton of different people all with like minded ambitions when it comes to growing wealth through real estate. Let me know if you ever want to meet up somewhere just you and I as well! 

I don't personally use a VA, but have helped aa ton of clients through the process. The benefits are truly amazing!

There are a ton of unique niches among it and it can vary for every veteran depending on their COE and if they are exempt from their funding fee or not, but almost always they can buy a home for 0% down which is incredible on it's own.

Also, a lot of people don't know that you can potentially use your VA benefits twice depending on how much was used on the first round. Also, you can refinance that first VA loan into a conventional one to be able to free up the use of your VA benefits again.

Would love to help you more with any questions you or anyone you know may have!