I currently have three houses.I want to keep them and get more rentals.How did some of you aquire more property without strapping your-self financially? I can buy one more house and then my hands are tide. Two of them I have had over a year and one I just bought. Any input and or advice would be wonderful.I really don’t want to sell one to keep going but I will if I need to in the begining.
Finding motivated sellers will little or no equity and then taking over subject-to. I haven’t worked that strategy yet but plan too. I just got a great book on it and it seems like it is a very doable strategy. Especially considering the millions of people who have refinanced with the lower rates and pulled out 100% of their equity. What choice do they have when they need to sell?
I have alot of equity but my concern with using it is that the rent wouldn’t cover the new note. I guess I’m looking for the perfect answer to my problem when there may not be one.
Don’t get too hung up of building an empire of rental properties but getting you financially strapped! You get in a vine both financially or even in managing multiple properties.
Are you a handy man type doing all the work in your properties? When everything is all savy that’s ok, but you know there’s always the “Murphy’s Law” that stretch your strong gut when problems arise.
It doesn’t make any sense owning multiple properties but you’re digging deeper in your pockets. One hundred to $200 positive cashflow sometimes might not be enough to get ahead of your expenses.
I am currently living in my largest money maker.I have cash flow of $175 a month from my first rental and will have about $150 from my second.We do all the work our selves.My partner gets free applainces,cabnets,doors and so on because of his job. We don’t really spend any money on our rehabs.You know other than carpet and repair items. All our money is tide up with our credit card debt.I need more cash flow to show that I can pay the note if a house is not rented.We have perfect credit and I would like to keep it that way.I am still learning all the different ways to finance to maximize cash flow.Is intrest only a good way to go on rentals? I’m just looking for some ideas on financing these babies!
Thanks a bunch guys!
One thing you may want to do is after the mortgages are paid down a bit, refinance them. The lower note will increase yiou cashflow and enable you to be able to purchase more.
Check out the subject2 method as was mentioned earlier in this thread. I think your biggest challenge there is if there are cash buyers in your area. People are likely to get confused when you start talking about subject2 and everyone understands cash. Cash equals less risk to the home owner and the cash buyer will win almost every time.
One thing you can do is reduce your expenses on your next purchase, for example are you currently taking advantage of your ability to ask for the seller to reimburse you for the cost of the appraisel and 3% in closing costs? This is all perfectly legal and done all the time by investors. You can receive a check back at closing for certain costs. Yes you will need to bring the money to the table but the cash you receive back will help on your next purchase. I am sure that others on the board have used this and the mortgage loan officers can help you as well.
Hope this information helps!
How exactly does the subject to work? How does it help in my situation? I am open to trying almost any loan program. My initial goal was to buy two houses a year. I still believe this can be achieved. I read every day trying to learn the financing side of it but it can be very confusing.There are just so many options out there. I need a tutor I think :-, it’s so much for my little brain to handle!
Thanks again my fellow peeps!
Subject 2 means you take the property subject 2 the exsiting loans. The opportunity is when a seller has zero or very little equity and they need to sell. You can work out a deal where they give you the house with the agreement that you make the payments. You then rent or lease-option it to someone else. If you do it right you get a property, a little cashflow and with little to no money out of your pocket. The ideal situation is when the home is in good shape and doesn’t need any repairs.
Thanks for the definition! Now I have a better understanding.