I've been investing in real estate for the past 5 years — long article

[PapaDoc223]

How do you go about buying a duplex and condo? School me...

Goat thing about buying a duplex is you can still get it on a home mortgage. Duplex, triplex, 4 plex can all have standard mortgages that have 10% down. FHA loan with a credit score of 720 will have you putting down 3.5%. once you go into 5 and above its a commercial loan and the requirements are alot stricter. 20-25% down.

So the property I'm looking at now is a 4 plex. Rents are 525 a month. 2 bedroom 1 bath each. Mortgage payment would be 820 a month. . Subtract that from the 2100 rental income. $1280 a month is your rental profit. Minus taxes, emergency fund(which you should absolutely have) realistically a profit of $800 a month. Refinance after 6 months. Of course you want to have had put some sweat equity into there. A nice coat of paint and new carpets can add upwards of 15k to an appraisal. Take that money and but 2 more. Rinse wash and repeat. I'm an intelligent dude, more so street smart. But anybody and I mean anybody can do this if the numbers start to make sense.

Isn't refinancing putting yourself at risk? I hate the idea of loans.

Refinance is only a risk if you're taking all of your equity out of the home. Take what you need out. If you took out a loan for 10k to make the down payment, take 30k out in equity on the place. Pay the 10k back, and buy 2 more places. Do the same thing. Rinse and repeat. Man listen I'm on pace to have 10k a month in rental profits after mortgage and taxes paid. I will be a millionaire asset wise by Dec 31 2016. The economy is right at the turn around stage. The housing market is starting to make a comeback albeit a small one. Hit places where you see the tide changing. The 7 cities are about to start building that stadium on the oceanfront right? Buy property down there before it skyrockets. Same with denver, Washington DC, and all the places that just legalized rec weed. Money WILL be flowing through those places. It's just getting in and making smart business moves.

How much capital would you suggest for someone to get into real estate? Also if a person is first getting in the game they do tax liens and wholesaling? I know some folks that try to get experience and capital in real estate that do wholesaling,tax liens first to learn the lingo,laws and the market.

 

[not_osirus_jenkins]

How do you go about buying a duplex and condo? School me...

Goat thing about buying a duplex is you can still get it on a home mortgage. Duplex, triplex, 4 plex can all have standard mortgages that have 10% down. FHA loan with a credit score of 720 will have you putting down 3.5%. once you go into 5 and above its a commercial loan and the requirements are alot stricter. 20-25% down.

So the property I'm looking at now is a 4 plex. Rents are 525 a month. 2 bedroom 1 bath each. Mortgage payment would be 820 a month. . Subtract that from the 2100 rental income. $1280 a month is your rental profit. Minus taxes, emergency fund(which you should absolutely have) realistically a profit of $800 a month. Refinance after 6 months. Of course you want to have had put some sweat equity into there. A nice coat of paint and new carpets can add upwards of 15k to an appraisal. Take that money and but 2 more. Rinse wash and repeat. I'm an intelligent dude, more so street smart. But anybody and I mean anybody can do this if the numbers start to make sense.

Isn't refinancing putting yourself at risk? I hate the idea of loans.

Refinance is only a risk if you're taking all of your equity out of the home. Take what you need out. If you took out a loan for 10k to make the down payment, take 30k out in equity on the place. Pay the 10k back, and buy 2 more places. Do the same thing. Rinse and repeat. Man listen I'm on pace to have 10k a month in rental profits after mortgage and taxes paid. I will be a millionaire asset wise by Dec 31 2016. The economy is right at the turn around stage. The housing market is starting to make a comeback albeit a small one. Hit places where you see the tide changing. The 7 cities are about to start building that stadium on the oceanfront right? Buy property down there before it skyrockets. Same with denver, Washington DC, and all the places that just legalized rec weed. Money WILL be flowing through those places. It's just getting in and making smart business moves.

How much capital would you suggest for someone to get into real estate? Also if a person is first getting in the game they do tax liens and wholesaling? I know some folks that try to get experience and capital in real estate that do wholesaling,tax liens first to learn the lingo,laws and the market.

I started by wholesaling. Good way to find a mentor and get capital. Go to biggerpockets.com the resources I learned from there are incredible.

 

[EmM HoLLa.]

Good thread.. I have one rental property in VA.. Has about 30k equity in it.. I don't live in the DMV anymore so I'm looking to start up and llc and move the property under the company and pull out the equity to buy another one.. It was really easy to rent the first unit. I have a military family in the now. I'm looking for more of the same for my next unit..

 

[black caesar]

How do you go about buying a duplex and condo? School me...

Goat thing about buying a duplex is you can still get it on a home mortgage. Duplex, triplex, 4 plex can all have standard mortgages that have 10% down. FHA loan with a credit score of 720 will have you putting down 3.5%. once you go into 5 and above its a commercial loan and the requirements are alot stricter. 20-25% down.

So the property I'm looking at now is a 4 plex. Rents are 525 a month. 2 bedroom 1 bath each. Mortgage payment would be 820 a month. . Subtract that from the 2100 rental income. $1280 a month is your rental profit. Minus taxes, emergency fund(which you should absolutely have) realistically a profit of $800 a month. Refinance after 6 months. Of course you want to have had put some sweat equity into there. A nice coat of paint and new carpets can add upwards of 15k to an appraisal. Take that money and but 2 more. Rinse wash and repeat. I'm an intelligent dude, more so street smart. But anybody and I mean anybody can do this if the numbers start to make sense.

Isn't refinancing putting yourself at risk? I hate the idea of loans.

Refinance is only a risk if you're taking all of your equity out of the home. Take what you need out. If you took out a loan for 10k to make the down payment, take 30k out in equity on the place. Pay the 10k back, and buy 2 more places. Do the same thing. Rinse and repeat. Man listen I'm on pace to have 10k a month in rental profits after mortgage and taxes paid. I will be a millionaire asset wise by Dec 31 2016. The economy is right at the turn around stage. The housing market is starting to make a comeback albeit a small one. Hit places where you see the tide changing. The 7 cities are about to start building that stadium on the oceanfront right? Buy property down there before it skyrockets. Same with denver, Washington DC, and all the places that just legalized rec weed. Money WILL be flowing through those places. It's just getting in and making smart business moves.

Nice. Be careful. I'm heading rumors of another recession. But I'm digging what you're doing. I'm thinking of doing it myself.

 

[2stepz_ahead]

imma say becareful also....mortgages are no joke.

@not_osirus_jenkins bruh what you gonna do if you dont have tenants.....whats your back up plan.

are you putting all your money towards paying off the mortgage as fast as possible or are you using the profits to ..like you said rinse and repeat and get a new property.

the gathering of all those mortgages are risky if thats what you are doing... i would say to pay them off ASAP.

if a recession hits an people lose their jobs...whats your plan if they cant pay their rent which means you cant pay the mortgage

 

[not_osirus_jenkins]

imma say becareful also....mortgages are no joke.

@not_osirus_jenkins bruh what you gonna do if you dont have tenants.....whats your back up plan.

are you putting all your money towards paying off the mortgage as fast as possible or are you using the profits to ..like you said rinse and repeat and get a new property.

the gathering of all those mortgages are risky if thats what you are doing... i would say to pay them off ASAP.

if a recession hits an people lose their jobs...whats your plan if they cant pay their rent which means you cant pay the mortgage

That's the thing. In a multiplex you'll always have tenants. If I bought a single family home that pulls in say 1200 a month in rent and they lose their job, I'm paying a 800 dollar mortgage by myself. If one person loses their job in a 4 plex I can still make mortgage with the other 3 and pocket monthly income. If 2 people lose their job I would still be able to make mortgage with the 2 and pocket some money.

I use the majority of profits to pay off my mortgage faster, I refinance to purchase more properties.

As the landlord I can work with people. Can't pay on the first? I'll take it on the 15th. The freedom is why I make as much as I do.

Mortgages are one tool. I've bought places with owner financing doing a wrap mortgage. All that is is the owner keeping the mortgage in his name and I'm making the payments.

At the end of the day, buying is where I make my money.

 

[luke1733]

How do you go about buying a duplex and condo? School me...

Go to your bank and ask for a mortgage loan officer. Ask them how much you can qualify for. If you don't want to go, then you can call also. They will tell you how big a loan you can qualify for. They will also tell you a ton more that you didn't care to hear, such as your entire credit history. Ask them how much you can expect to pay for your down payment and your closing costs.

If you are not going to live in the duplex then the state requires the bank to force you to pay a 20% down payment.

If you don't want to pay a 20% down payment then you can pay a 3.5% FHA loan but you have to live in one unit of the duplex your buying for a minimum of 6 months before you can rent out the side your staying in.

1st- go to zillow.com or redfin.com or realtor.com or trulia

Select the buyer option

Type in the name of the city/state you would like to see houses for sale

Somewhere in the search you can specify your search more to enter: multi-family, duplex, triplex, quadplex

2nd- look at all the homes available and look at the prices that are the average. Write down your top 10 or 15

3rd-drive to the house just to check out the area b/c sometimes the house looks good on the internet but when you actually go to the area you will see it's the last place you would be willing to invest $70,000 or above in.

4th-be in close contact with your real estate agent and tell them your top 5 houses (after you've visited your top 15 you should limit your picks down to only 5 b/c no realtor really wants to waste gas and time driving you to 20 places). Have your realtor call the seller of the house and set up an appointment for you to go to the house and walk inside the house. You absolutely want to and need to see the inside of the place. Look for water damage on the ceiling, termite damage is obvious in eaten wood, look for roof damage or the shingles coming apart, check the appliances to make sure they work, check the plumbing.

5th-Find out from the city by calling the city office of where the house is located how much that house that is your number 1 pick is really worth. If they listed the house as $350,000 and the city says it's worth $75,000 then you need to tell the seller and real estate agent. Now, if the house is exactly worth what the person is selling it for then don't expect for the seller to really knock anything off his/her asking price. Why? Because they basically aren't making a penny selling you the house; and they're selling it to you for personnel reasons.

6th-tell your real estate agent you would like to by the house once you picked your number one house out. Tell your agent what you would like to pay for the house (usually it's within $10,000 or less of the asking price from the seller).

7th- tell your loan officer you are ready to buy the house

8th-Now you are about to put up money of about $1,200 to your real estate agent called earnest money. This money will go into the house payment if you buy the house (If house cost $90,000/ earnest money will make it cost $1,200 less). If you don't buy the house then the real estate agent gets to keep the $1,200. It's an agreement that states your not wasting people's time (b/c the seller is actually losing money once you state in contract for them to take that property off the market).

9th- the real estate agent of the seller and your real estate agent will give you a bunch of papers stating the house's history and they will have you sign an agreement that you are under contract to buy the house. This means nobody else can look at the house except you.

10th-Due diligence. This is a 10 day period where you will have your inspector, termite guy, and appraisal (determines how much house is really worth) guy go into the house to see things structurally wrong with the house that might be a problem for you. They will come up with something even if nothing is wrong. Only pay attention to big stuff that's wrong, b/c if you go asking the seller to take a spot out the carpet then they can say no and just basically not wanna sell the house to you. Once you find stuff wrong you care about then take that paper back to the seller and tell them these are things I have to pay for once I get in the house and I would like for you to knock more off your asking price if I have to pay this OR tell the seller they can pay someone and have it done and keep their asking price the same)

11th-Set a closing date on when you want to close. (it's usually within one month after the due diligence period is over)

12th-Close on the house. Congratulations! Come back to me and inbox me to let me know the advice helped.

13th- Get insurance on house

14th-use your same real estate agent to list your house for rent and find you tenants and choose how much you want to charge them. They'll write up a contract for you too. The agent will be paid by the tenant the first month's rent for the service of doing this for you.

15th-you're done

Extra things to expect:

Have the seller contribute something to your closing costs (it is expected)

Closing costs 7% of whatever the house costs (3.5 percent goes to your agent/3.5%goes to other)

Things to ask before you buy:

how old is the septic tank, how old is the roof (if it's over 13 years and it's a 15 year shingle roof you need to ask the seller to come down on the price. If it's over 20 years on a 30 year shingle roof then they need to bring price down), are there any known leaks in the house,

 

[not_osirus_jenkins]

How do you go about buying a duplex and condo? School me...

Go to your bank and ask for a mortgage loan officer. Ask them how much you can qualify for. If you don't want to go, then you can call also. They will tell you how big a loan you can qualify for. They will also tell you a ton more that you didn't care to hear, such as your entire credit history. Ask them how much you can expect to pay for your down payment and your closing costs.

If you are not going to live in the duplex then the state requires the bank to force you to pay a 20% down payment.

If you don't want to pay a 20% down payment then you can pay a 3.5% FHA loan but you have to live in one unit of the duplex your buying for a minimum of 6 months before you can rent out the side your staying in.

1st- go to zillow.com or redfin.com or realtor.com or trulia

Select the buyer option

Type in the name of the city/state you would like to see houses for sale

Somewhere in the search you can specify your search more to enter: multi-family, duplex, triplex, quadplex

2nd- look at all the homes available and look at the prices that are the average. Write down your top 10 or 15

3rd-drive to the house just to check out the area b/c sometimes the house looks good on the internet but when you actually go to the area you will see it's the last place you would be willing to invest $70,000 or above in.

4th-be in close contact with your real estate agent and tell them your top 5 houses (after you've visited your top 15 you should limit your picks down to only 5 b/c no realtor really wants to waste gas and time driving you to 20 places). Have your realtor call the seller of the house and set up an appointment for you to go to the house and walk inside the house. You absolutely want to and need to see the inside of the place. Look for water damage on the ceiling, termite damage is obvious in eaten wood, look for roof damage or the shingles coming apart, check the appliances to make sure they work, check the plumbing.

5th-Find out from the city by calling the city office of where the house is located how much that house that is your number 1 pick is really worth. If they listed the house as $350,000 and the city says it's worth $75,000 then you need to tell the seller and real estate agent. Now, if the house is exactly worth what the person is selling it for then don't expect for the seller to really knock anything off his/her asking price. Why? Because they basically aren't making a penny selling you the house; and they're selling it to you for personnel reasons.

6th-tell your real estate agent you would like to by the house once you picked your number one house out. Tell your agent what you would like to pay for the house (usually it's within $10,000 or less of the asking price from the seller).

7th- tell your loan officer you are ready to buy the house

8th-Now you are about to put up money of about $1,200 to your real estate agent called earnest money. This money will go into the house payment if you buy the house (If house cost $90,000/ earnest money will make it cost $1,200 less). If you don't buy the house then the real estate agent gets to keep the $1,200. It's an agreement that states your not wasting people's time (b/c the seller is actually losing money once you state in contract for them to take that property off the market).

9th- the real estate agent of the seller and your real estate agent will give you a bunch of papers stating the house's history and they will have you sign an agreement that you are under contract to buy the house. This means nobody else can look at the house except you.

10th-Due diligence. This is a 10 day period where you will have your inspector, termite guy, and appraisal (determines how much house is really worth) guy go into the house to see things structurally wrong with the house that might be a problem for you. They will come up with something even if nothing is wrong. Only pay attention to big stuff that's wrong, b/c if you go asking the seller to take a spot out the carpet then they can say no and just basically not wanna sell the house to you. Once you find stuff wrong you care about then take that paper back to the seller and tell them these are things I have to pay for once I get in the house and I would like for you to knock more off your asking price if I have to pay this OR tell the seller they can pay someone and have it done and keep their asking price the same)

11th-Set a closing date on when you want to close. (it's usually within one month after the due diligence period is over)

12th-Close on the house. Congratulations! Come back to me and inbox me to let me know the advice helped.

13th- Get insurance on house

14th-use your same real estate agent to list your house for rent and find you tenants and choose how much you want to charge them. They'll write up a contract for you too. The agent will be paid by the tenant the first month's rent for the service of doing this for you.

15th-you're done

Extra things to expect:

Have the seller contribute something to your closing costs (it is expected)

Closing costs 7% of whatever the house costs (3.5 percent goes to your agent/3.5%goes to other)

Things to ask before you buy:

how old is the septic tank, how old is the roof (if it's over 13 years and it's a 15 year shingle roof you need to ask the seller to come down on the price. If it's over 20 years on a 30 year shingle roof then they need to bring price down), are there any known leaks in the house,

That's how I was when I first started!! After number 3 I was like fuck all that. Streamlined the shit out of my process. I've bought homes sight unseen.

 

[2stepz_ahead]

How do you go about buying a duplex and condo? School me...

Go to your bank and ask for a mortgage loan officer. Ask them how much you can qualify for. If you don't want to go, then you can call also. They will tell you how big a loan you can qualify for. They will also tell you a ton more that you didn't care to hear, such as your entire credit history. Ask them how much you can expect to pay for your down payment and your closing costs.

If you are not going to live in the duplex then the state requires the bank to force you to pay a 20% down payment.

If you don't want to pay a 20% down payment then you can pay a 3.5% FHA loan but you have to live in one unit of the duplex your buying for a minimum of 6 months before you can rent out the side your staying in.

1st- go to zillow.com or redfin.com or realtor.com or trulia

Select the buyer option

Type in the name of the city/state you would like to see houses for sale

Somewhere in the search you can specify your search more to enter: multi-family, duplex, triplex, quadplex

2nd- look at all the homes available and look at the prices that are the average. Write down your top 10 or 15

3rd-drive to the house just to check out the area b/c sometimes the house looks good on the internet but when you actually go to the area you will see it's the last place you would be willing to invest $70,000 or above in.

4th-be in close contact with your real estate agent and tell them your top 5 houses (after you've visited your top 15 you should limit your picks down to only 5 b/c no realtor really wants to waste gas and time driving you to 20 places). Have your realtor call the seller of the house and set up an appointment for you to go to the house and walk inside the house. You absolutely want to and need to see the inside of the place. Look for water damage on the ceiling, termite damage is obvious in eaten wood, look for roof damage or the shingles coming apart, check the appliances to make sure they work, check the plumbing.

5th-Find out from the city by calling the city office of where the house is located how much that house that is your number 1 pick is really worth. If they listed the house as $350,000 and the city says it's worth $75,000 then you need to tell the seller and real estate agent. Now, if the house is exactly worth what the person is selling it for then don't expect for the seller to really knock anything off his/her asking price. Why? Because they basically aren't making a penny selling you the house; and they're selling it to you for personnel reasons.

6th-tell your real estate agent you would like to by the house once you picked your number one house out. Tell your agent what you would like to pay for the house (usually it's within $10,000 or less of the asking price from the seller).

7th- tell your loan officer you are ready to buy the house

8th-Now you are about to put up money of about $1,200 to your real estate agent called earnest money. This money will go into the house payment if you buy the house (If house cost $90,000/ earnest money will make it cost $1,200 less). If you don't buy the house then the real estate agent gets to keep the $1,200. It's an agreement that states your not wasting people's time (b/c the seller is actually losing money once you state in contract for them to take that property off the market).

9th- the real estate agent of the seller and your real estate agent will give you a bunch of papers stating the house's history and they will have you sign an agreement that you are under contract to buy the house. This means nobody else can look at the house except you.

10th-Due diligence. This is a 10 day period where you will have your inspector, termite guy, and appraisal (determines how much house is really worth) guy go into the house to see things structurally wrong with the house that might be a problem for you. They will come up with something even if nothing is wrong. Only pay attention to big stuff that's wrong, b/c if you go asking the seller to take a spot out the carpet then they can say no and just basically not wanna sell the house to you. Once you find stuff wrong you care about then take that paper back to the seller and tell them these are things I have to pay for once I get in the house and I would like for you to knock more off your asking price if I have to pay this OR tell the seller they can pay someone and have it done and keep their asking price the same)

11th-Set a closing date on when you want to close. (it's usually within one month after the due diligence period is over)

12th-Close on the house. Congratulations! Come back to me and inbox me to let me know the advice helped.

13th- Get insurance on house

14th-use your same real estate agent to list your house for rent and find you tenants and choose how much you want to charge them. They'll write up a contract for you too. The agent will be paid by the tenant the first month's rent for the service of doing this for you.

15th-you're done

Extra things to expect:

Have the seller contribute something to your closing costs (it is expected)

Closing costs 7% of whatever the house costs (3.5 percent goes to your agent/3.5%goes to other)

Things to ask before you buy:

how old is the septic tank, how old is the roof (if it's over 13 years and it's a 15 year shingle roof you need to ask the seller to come down on the price. If it's over 20 years on a 30 year shingle roof then they need to bring price down), are there any known leaks in the house,

number13 gets overlooked waaaaaaaayto much

but let me add....protect your asset(s)

get this under an LLC if possible.

Horror story:

guy buys 3 condos in a building

someone gets hurt and sues him

not only did they sue him for a piece of his personal weath...but they was able to take his condos.

soo

if you have an LLC.....you can separate personal from business.

in this case....form a LLC each condo

keep personal and business finances separate. dont allow the corporate protection veil to be broken

push comes to shove they only go after you personally or only one of your condos...but they wont be able to take everything.

seems like alot of work ...but protecting what you built or acquired will be more work trying to keep it if not properly protected