how is it possible to...

… create cashflow from rents without over-financing?

i have 1 three-fam owner-oc house and i want to get about 4 or 5 of them. i figure that the cashflow from 5 houses, in my area, will allow me to become a LL full time and i can reach my goal of not having to have a boss.

my question is… how can a youngster like myself, with little equity, possibly build such a portfolio in a reletively short period of time without over extending myself and over financing?

what are your thoughts on using pyramids, blankets and loan assumption to purchase multi fam rentals?

help a mentorless, ambitious, young fella out, woul’ga?

Well how much equity do you have in your current home. Do not go out and buy 3homes in 1 week…Spread it…start slowly…try to acquire 1 new home every 2months or so, this will also keep your credit from nose diving…

Right again! Amost I bought 5 houses in 45 days then bought another 4 in another 30 days after that I slowed waaaaaaaaaaaay down for 4 months then bought another 6 after 6 more moths I bought another 8 and on and on and on that is the crazy thing! I lived by the thought GO BIG OR GO HOME can you do it? Well YEAH do I say it is a good IDEA? Well uhhhh NO… It is a headache

Walk a mile in my shoes! No wait walk a block if you make it to the corner I will give you a piggyback ride the rest of the way…


     and I mean Sincerely I do not recommend it.


reo, who would give you the money to do that and why would they take the risk of giving you that kind of money?

from a lenders view, a begininer with little cash reserves will not be able to withstand a widespread vancancy…

what i mean is, if i get (3) three fams, and i get laid off from my full time job, and i have most of the units vacant (not likely, but possible) i would very quickly go into default on my loans (lenders point of view)

how do i overcome this objection of the lender and who do i go to to get money of a business like this?

I have not been as aggressive as REO, but basically the same. Remember the property pays the mortgage you just facilitate getting the check from the tenant to the bank. The goal is to make $40,000 off $200,000 in rents. It is a scary thing to have $10,000 in mortgages due EVERY month. That is why I buy a house. I get it rented as soon as the tenant pays their second rent payment, I buy another one. That gives me a breather between purchases. Even at that pace I have purchased 10 houses in a year.

Also remember that after about 3 houses if one goes down for vacancy or tenant stops paying or anything, the rents from the other properties make that mortgage very easy to take. After about 5 you won’t have to go into your own pocket ever again.

I was homeless when I bought my first 5… Pulled at least 30k-40k cash out at closing on all of them… Turned around and bought the next one cash then got a HELOC on that one bought the next then the next then the next. After 6 months I bought more. So the cash flow was the main game then. This will shock you all December 18th 2006 would have been 11 years that I had been doing Real Estate on my own. That was also the day I got back into a house.

So how is this for a time line.

December1st 1995 I had 0 in the bank and was buying 5 houses
December 1996 I had around $290k in the bank and 18 houses
December 2005 I had enough to say I am done and semi retire
December 2006 I will only own 4 houses turn 32 and say see ya! I am planning on going to a local Adult High School and getting my Diploma. I have Four years of college and a G.E.D. And enough cash to live on.