help for new wannabe

Hi to All,

I need to create permanent passive income for the rest of my life as I am retired and my only income is social insecurity (mine + wife’s) and have no pensions.

After searching all possibilities I feel that owning rental property is the answer, and spent this year reading most of the books and guru publications and checked your site for ideas.

Considering my position I need to go the ‘no money down’ route and wonder if I can buy enough units to get a livable income to include annual cola increases. Most of the No Money Down deals seem to be workable for buying and selling, but I want to buy and keep so this is what I have in mind:

locate property with some owner financing, create a note for the balance and immediately sell it to pay my seller then hire a good property manager; I realize that this will require finding the right seller and situation.

I am looking in my state, Connecticut, but would also consider some of the southern states as CT is getting very expensive to live in.

I have been visiting your site frequently and respect your knowledge and views, so any suggestions will be appreciated and considered.

Am I being realistic with my plan ?

Many thanks to all, Rob

Highly leveraged properties don’t always cash flow. For rentals I buy bank owned 2-4 units, rehab (using a line of credit) and after 6 mos do a cash out refinance against the new value - max 80% LTV. I will only do this if I can still preserve my cash flow so you have to be careful on the buy side.

I use 70% of ARV minus repairs as my max offer.


I have posed this question to several people but never really get a strong answer in response. Maybe you can answer since you have been buying 2-4 families yourself. The morgtage brokers I worked with both to buy and refinance my 2 3 familiy buildings both said that the banks don’t really consider the rental income from the units. They just look at the income from your job. So for our refinance they looked at my husband’s income to cover both the 3 fams and our own mortgage without any regard to the rental income. The broker said that we could buy one or 2 more buildings and our DTI would be maxed out. Have you found this to be a problem? Do the lenders that you work with take into account the rental income? I have a hard time believing this because one job can only cover so many mortgages and I know that there are people who buy a lot of these things. I can get a HELOC and was thinking of doing exactly what you are descrbing-buying with HELOC ,rehabbing and then refiing. But I am afraid that when I go to refi that I won’t be able to get an 80% loan because the rental income won’t be considered. I was thinking of just going 5+ units because of this.
Any thoughts are appreciated.