I am on my 3rd sneaky rental. When I discovered this I could not believe it. I couldn't believe the bank would give me another mortgage and let me turn my old home into a rental. All I needed was a lease agreement to cover my DTI. I grew up doing carpentry work (home remodels) with my uncle. I started a few businesses instead of ever getting a real job. When my wife and I purchased homes we always have looked for something we could improve upon and have projects to work on. Something we could force equity into. I have grown my businesses to where I own them and they don't own me, allowing me more time with family and to renovate our current sneaky rental/home. It took about 8 years into our "real estate investment" journey to start realizing some decent cash flows. We're in year 9 now, and the snowball is starting to really roll. Exciting stuff. Glad you guys shared this.

@madbarber1670

Жыл бұрын

Congrats...os there a way you can explain the 5% down using a lease agreement t from my other rental properties....I'm stuck in the middle of the process and not understanding what to tell my banker......also dontou find with mortgage insurance added because not puttingv20% down messes with your cash flow? Thanks in advance....and congrats again on your journey

@kylestricklin3081

Жыл бұрын

@@madbarber1670 Just be super transparent. You own the home your in, you want to buy another for 5% down. If it is the DTI that is messing up the possibilities, a lot of lenders will cover the debt you have on your first home with a lease agreement. I've found honesty is the best policy paired with conservative cash management and you should be good.

@tariqreid1866

Жыл бұрын

You've managed to overcome perhaps the most difficult part of the sneaky rental strategy, which is to have a wife that shares your long-term financial goals and is willing to repeatedly move every 2 years and live in fixer upper properties and even share those family living arrangements with renters (strangers). This is a great strategy for single people, but I don't think most women would want their families to live like this. So you're way ahead of the game if your wife is on board with the plan.

@pioneer7777777

Жыл бұрын

With today's prices and interest rates, do you think it's feasible to repeat similar success for someone starting new? Genuinely curious

@jamarterry15

8 ай бұрын

Preach!

Things I don't like about this video: 1. Sneaky rentals is just house hacking, there was never a time where bigger pockets didn't share this before lmao 2. There is no mention of the actual mechanism for this to work which is an FHA loan 3. 12 months IS a REQUIREMENT for you to stay at an FHA loan property and David makes it sound like its optional, giving illegal advice is no bueno 4. No mention of PMI 5. No mention of how your monthly will skyrocket in comparison to a 20 percent down this is just a rehashed concept of house hacking but this is repackaged as new information. If you are running out of topics I'd rather you post fewer videos than post time wasting videos that are the same 4-5 strategies over and over and over and over and over again. Infact at 10:35 David even refers to this as house hacking totally validating that this is rehashed information but its packaged as some kind of "sneaky, secret, super strategy" and its just the same fucking video they put out 2 weeks ago except here they are even more loose with the rules and regulations around this stuff. Very disappointed, Brandon would never do stuff like this. The vagueness of this video makes this just an advert for the brokerage. I'm legitimately considering unsubscribing as bigger pockets went from solid advice to just david and Co plugging their personal companies instead of helping people learn how any of this works

@keelysambonino3676

9 ай бұрын

Liu Liu l l

@doktorr23

9 ай бұрын

@Sahm - thanks for enlightening the masses here. So much misinformation in this video.

@jeffmorlen6504

8 ай бұрын

I agree it’s so vague… they just squeezed this one out. Brandon would never.

@baileyjohn5010

5 ай бұрын

You actually can get out of an FHA before your 12 months and it's not illegal. You just need a valid change of circumstance explanation (marriage, change of job, change of location, a sick relative that you have to care for etc.)

@ia6980

5 ай бұрын

Make ur own video

I’ve been doing this since 2017. Bought a 4 unit with 4% down, two years later, sold it, bought a 12 unit, duplex, and invested in 5 cabins. Since then I’ve bought a single family home with an adu that’s on Airbnb. I wasn’t able to buy in good areas until the latest house. Ready to quit my day job in less than a year.

@spurs5677

8 ай бұрын

You still on road to quit your job? Still doing good

@therealtimray

8 ай бұрын

@@spurs5677 I am! Next summer

@beatthetrap777

3 ай бұрын

Nice!! Congratulations

@switchkey2010

3 ай бұрын

I bought a duplex back in 2020 before Covid and now how can I get another property with the interest rates so high and the prices of the homes that are so high I do live on one side and rent out the other how can I do this to get another property, please help

@therealtimray

3 ай бұрын

@@switchkey2010 you'll have to widen your search to neighborhoods, or cities, or even states with lower prices. Ideally you find one in an area where short term rentals are allowed, in areas where people travel to. If your first place has less than 20% equity, I'd look into getting it appraised to see if you have enough equity now. When you buy your second, make sure you let the lender know you're buying it as a primary residence. Fortunately, interest rates will likely come down by the end of the year. Most lenders will auto refi within 2 years, if the rate comes down.

These discussions with David and Christian are my favorite.

David, you’re the best honestly… your humble and practical, and we provide advice that benefits investors at all levels. Thank you!

Love it! This is how I bought my first two sfh in Phoenix. I got in to the first one for 210k at 3.5% down fha. Did a cash out refi 2 years later, used that for a 5% down payment on a 400k house. Now the first one is a long term rental, and I’m currently saving up for another one to redo this same process. Very powerful strategy imo for new investors.

@MrBklynTrini

Жыл бұрын

How much more did your 1st mortgage go up by?

@JayLupe

Жыл бұрын

@@MrBklynTrini that's what i wanna know too

@franklinreyes2313

Ай бұрын

Did you live in the 3.5% property?

My favorite podcast I've listened all recent ones so now I'm going backwards and glad to be able to listen to all the great people on the podcast they all seem to want to progress and grow it's awsome thank you David and all the hosts.

Great episode!!! Thank you all again!!!

I think these are great talks and very educational, thanks for providing this info to the community. If I can make a suggestion, since we're talking numbers and how they evolve in the process, I think a written visual support (like a slide, or a whiteboard) will be tremendously helpful.

Thanks for the update boys!🚀

Love your info.. Thanks for the advices..

I appreciate you! Thank you for sharing your knowledge on the subject.

Just don't understand how is the mortgage on 475k loan is 2000 a month when the rates are 6.5-7 percent? According do Zillow calculator the monthly mortgage including the property tax and PMI will be around 3900

@ib1ray

Жыл бұрын

Yeah i thought the rule of thumb was basically 1000 dollars for every 100 thousand...

@Omar-tu9qf

Жыл бұрын

I agree I don't know what area they are buying these properties. Plus wouldn't you have pmi on top of that mortgage.?

@diabetes1.564

Жыл бұрын

I Guess it also depends on the property taxes but I agree

@caustinolino3687

Жыл бұрын

​@@ib1ray Wait, you're saying an $800k house will cost $8k a month?

@jim5128

Жыл бұрын

Exactly. The mortgage with do little down would be so high. How does this work?

Excellent, you two! So helpful. However, I think Christian may have made a math error. When you do your third house/houshack, that single property wouldn’t likely be expected to DOUBLE the gains of the first two properties. Using your example, you might go to bringing in $72K with two properties and then by adding another $36K with the third property, you’d be closer to $108K, and not closer to $150K. Now, if you did TWO more properties at $36K each then, yes, you would be closer to the theoretical $144K/$150K.

There is some nuance to what they’re indicating that does not make this 100% accurate..in the sense that if you vacate your property and still want to hold on to the previous home as a rental have to still qualify for the new loan that you are getting based on personal and/or rental income from old property. So the gentleman mentioning 25 homes in 25 years is assuming you could carry the note from a creditworthiness standpoint for that many homes, which is unlikely for most people. At some point you will need to sell off some assets Which is a smart strategy for liquidity but as far as the low barrier of entry to get into rental investing for 1-3 homes this advice is solid. I’m a Realtor that loves biggerpockets fyi

Amen. On my 3rd looking to buy my 4th in December

This is exactly how we started investing!! We did this strategy 3 times already and it’s great!

@tarahall331

10 ай бұрын

How are you putting this in your name and not using a LLC? Aren't FHA and Conventional loans only in personal names and not LLC?

What kind of legal obstacles are involved with converting a single unit into 2 or 3 units? Like permits, zoning, etc.

Do you have any videos on how to properly convert 1 unit into 2 or 3 and or ADU additions?

Incredible... Thank you.

If your income doesn’t go up significantly in this time your buying power is still limited. They add 75% of the rental income to your income but require 2-3x the mortgage payment on your income so each time you get a new property you have less buying power. Also, there are conventional loans that allow you to put 5% down on a property so you don’t necessarily need to do it this way unless you are using an FHA loan

Hi i have heard so many podcast on pandora your podcast to be exact i love all the info thank you

Awesome suggestions!! So a LLC isn't necessary in your eyes? I ask this because I've been told that you can only do this under your personal name. I also heard about moving properties to a LLC after purchase if the mortgage company allows it. Do you suggest this method?

So what do I do if I bought a MFH in a bad area even though appreciation has generally been very kind? During this downturn the property has barely appreciated, and there’s no way to add more space. Just tough it out and wait to sell when it’s appreciated enough?

Would refi restart the clock on this strategy?

How do people split utilities with ADUs?

Hello all , does this work on new build 4 plex as well??

Dude! Mind. Blown. I love my veggies!!!

I was going to do this but I found it very difficult to find a 3 or 4 unit building that would be even break even cashflow when I was putting down only 5%, even when including what I would have paid in rent. A lot of them would have been $4k out of pocket per month vs $2k if I was renting.

@charlieharmett831

Жыл бұрын

What area were you looking at? I've had a similar issue in nj

@probst9999999999

Жыл бұрын

@@charlieharmett831 LA area, I've looked in several neighbourhoods here but none of them really work unless you're OK with a really run down building in like Compton.

@robd7934

Жыл бұрын

This is my exact concern. The high cost of housing coupled with the fact that you can only so much for rent make it hard to see how you can be cash flow positive

@sreehill

Жыл бұрын

You could consider reaching out to David Greene and Christian (his lender in the video). They've got a great team, live and invest in your area! I'm going to use the David Greene Team when I'm ready to buy in CA, which is 2023. David (and team) specializes in finding value add properties.

@briandeluca6908

Жыл бұрын

Well your not renting to the right market then. Have you ever heard of insurance relocations.. they will get you to the price you need to cover the mortage or mid term professionals. In your market this can be smarter because rent won't cover

Is there a way to build/construct a home to where you have an "ADU like" added to the house but by guidelines its not considered an ADU. Some places are super strict about ADUs, so why not build the house that has some level of privacy, but build it in a way that its not considered an ADU (not talking about just having a basement). Is that possible?

hi bud, wich banks they are willing to land you with 5% maybe you can give some tips , Thank You appreciated from Canada

What time does this show come on?

I love this! I purchased my first home (w/ a granny flat) with 20% down. I then purchased all my other properties with 5% down with granny flats. I STILL regret putting 20% down on the first house, which is a lot bc I’m in San Diego! 😅

@biggerpockets

Жыл бұрын

Love it!!

@kdvwusm

Жыл бұрын

But wouldn’t your mortgage be any high….. at least now it is

@JCizzleSoCal

Жыл бұрын

Purchasing those multiple rental properties in San Diego must’ve been several years ago when the home prices and mortgage rates were significantly lower than today

@jessicadubiel1823

Жыл бұрын

@@kdvwusm I’ve purchased a house every 12-18 months since 2016 to 2022. But it always seemed expensive when I purchased. I was convinced I was purchasing at the the top of the market and each time

@jessicadubiel1823

Жыл бұрын

@@JCizzleSoCal Started in 2016 and continued through 2022. Each property cash flows, even the property purchased recently. It just needs to pencil at the end of the day

Do you have to pay the house of in a year before you finance another 1?

VERY GOOD CONTENT . SAVES YOU ALL RENT MONEY PLUS YOU OWEN HOME AND 5 YEARS LATER YOU OWN MORE PROPERTIES JUST BECAUSE YOU PURCHASE THIS ONE ONE TIME .

Hi Do you use people good credit score to apply loan for investment property. Or recommend me who does.

How can I use my current home as rental and get new loan buy a house to live in?

What if I’m not in a position to live in one of the units (young kids/family and I’m investing out of state) if a multi-unit investment house? Is there any way I can still take advantage of the 5% down. What are the terms for “living in the residue se”? What if I just keep one of the units unoccupied for when I’m in town?

This doesn’t apply to out of state investors looking to purchase their 2nd, 3rd or 4th investment property without having to put down 25%. I wish they would do an episode specifically on purchasing out of state investments without putting 20% - 30% down. Not everyone can or wants to house hack

@Lolroblox8544

2 ай бұрын

Agreed! Or some of us have kids and are W2s and changing our address even if down the block, cannot happen.

Is this possible for group homes

What books have been written about it?

Why in Florida if its a Multifamily you need 25% down? (It doesn't matter if tis a Primary Residence or an Investment). *I am not talking about commercial, I am talkin about residential multi.

Ok I can see this working but all I been able to find on conventional loans that give you 5% you have to keep it as your primary so how does that work for the next one, refinancing ?

I'm new to real estate investing, I'm looking to buy my first rental property, what is you opinion on hard money loans for investing?

Can this be done if you already have a primary residence with a 30 year mortgage? How can it still be done?

This works great on the first home and maybe the second. However if you plan to get an agency loan each time you will end up having a DTI that is too high to qualify for the next purchase. Even with the rental income.

@Mrzdavis11

Жыл бұрын

Move them under an LLC🎉

@ericjeanette-homefinances2510

Жыл бұрын

@@Mrzdavis11 no that will not work. You can move the ownership under the LLC, but the mortgage will still be in your name and on your credit report. So, when you go to buy the NEXT property and apply as if it is your primary residence, the lender will still see that other mortgage there and you will need to qualify with that mortgage being calculated in your DTI.

My question is can you keep the mortgage on your first house hack as 30 year 5% down? Or do you have to then transfer that loan into a commercial loan, which would then force you to come out with money for the higher down payment.

Hi David, Been watching and listening for a long time. Can you do a detailed episode on 1031 exchanges. Pros, cons. and all the nitty gritty details and ins and outs. how you 1031 into a new build ie Lennar or DR horton build. what if you 1031 down instead of the usual up (as in 1031 to getting more units and bigger deals). it would be great with a lot of examples too. Thank you!

Why does it matter if the property is turn key that you bought ? As long as it cashflows when you move out thats what matters. Buying one property and making two more units out of it sounds like alot of money and zoning issues with the town.

What’s best and cheapest out of pocket financing to buy land and build a house to either live or not in it with one or two ADU’s?

how many rental properties do you both have ?

This is a great strategy to get started, good talk. Not so feasible if you have a family. I’ve done two properties like this but my family grew quicker than my properties so I switched to brrrrrrrrr

@eastmeetswest8371

Жыл бұрын

Yes, I am in that boat. I will need to start with Brrr because I have a family.

@tavianstewart7960

Жыл бұрын

Can you explain what having kids has anything to do with it? Are you guys saying you need more bedrooms for said children so you can’t find a smaller property to start with?

@heatherharmon2679

Жыл бұрын

I am doing it with my small family right now. I have a full basement with 3 beds and 1 full bath. Renting it out to a young couple while my kids and I live upstairs.

@eastmeetswest8371

Жыл бұрын

@@heatherharmon2679 This is what I am looking for. Fingers crossed.

@anisahisa7873

Жыл бұрын

@@tavianstewart7960 when you have kids, you can do this until kids enter school. After that, you wouldn’t want to move every year or two, and have kids change schools that often. It’s practically unstable for kids.

I turned my condo into a rental. I purchased low, and now I rent it out. I would like to purchase a duplex, but if you get a primary property in another city. You have to be a 100 percent remote employee, or plan to.move there.

This appears to only really work in certain areas that are not HCOL areas. LA, Bay Area, NY and other areas are near impossible to even break even let alone be underwater using this are a major barrier to entry.

Hold up! Some of those mortgages require you to stay in the house for a period of time and if you move out that would be considered a violation of your mortgage agreement. If you don't tell them (read, sneaky) thats mortgage fraud and you may find yourself in a bad place.

This really depends on where you live. There is still historically low inventory in the US. This also means there are historically fewer properties that qualify to be able to do this. Not all locales or neighborhoods allow adding ADUs to an existing multi or single-family home either. So please do the research before buying a property to execute this strategy.

Hello! Very valuable video but what does one do who has a huge family living together in their current house (kids and seniors) and cannot just pickup and move to one house to another easily

@robaustin_

Жыл бұрын

You would just move there 😉😉 as your primary residence and then move out shortly after.

Bro the content is 🔥. Thanks. I currently have 5 properties, all pre-construction attached townhouses. 3bd 2.5 bath. I'm getting absolutely skinned alive with the mortgages. Is there any way to rent out the basements with these townhouses? None of these are end units. Any other suggestions?

@youmayberight2434

7 ай бұрын

You may be able to do an assumeable mortgage for non comventional loan if really that bad to make smaller portfolio more manageable IMO.

How can you get a mortgage for a primary residence when you already have one ? 🤔

Doesn't PMI hit?

What happens if you dont really move into it ?

How does the government or bank know whether you're living in it or not?

I’m 18 wanting to buy a house as a rental but live in it for a few years any tips this would be my first time buying a house/rental

I have like $200k in equity in my house right now, after my tenants move out this coming April, any suggestions on the best way to invest? With the DSCR loan option or FHA or Conventional? and are TurnKey rentals a good investment to get into? They are all set with tenants ready to go...idk any recommendations thanks!

@davidedwardslux

6 ай бұрын

What lender do you use for DSCR loans?

What about those who are already living in their primary residence?

Or if you are using a VA loan, then it is zero down (subject to limitations on reusing benefits, etc).

@casasdenick

Жыл бұрын

As veterans we have it made when it comes to RE investing. I wish more vets would take advantage of the VA loan. Those I have been able to help so far have been doing great things (I'm a lender).

“ virtually”:( which means mostly not) guaranteed. As long as ( which means that your miles may be zero) right locations….. are locations defined ?

So you guys talk about doing this 20+ times but wouldn't you DTI cap out pretty quickly with this strategy? Seems like a great way to get the first 4 properties though.

Isn't there a limit to 10 conventional loans with this strategy? Technically 4 in some cases depending on credit and your debt to income ratio? I'd like to see a video on how to manage getting to 25 properties if there is a hard cap on getting traditional loans in the scenario you're talking about there.

@LaughtersHouse

Жыл бұрын

Portfolio lending or investor friendly lenders. I believe there are a few videos from BP on this topic and definitely a lot of info on their site. Always good to partner to local banks and build relationships with lenders.

@TheDG836

Жыл бұрын

Expand outside of conventional/traditional. Asking banks goes a long way.

@bosellibrothersrealestate

10 ай бұрын

@chadhamlet I own 13 properties. The 10 loans you are referring to are only in your personal name. You are able to secure a bunch of different loan products like a DSCR loan that looks at a property's revenue potential rather than just your personal income and existing debt. I took three properties I had in my personal name and refinanced with a portfolio loan to get them outta my name. Where there's a will there's a way!

Do lenders go after you for a 3% down-payment and not living at the property?

That might be in the US. Here in New Zealand you need 20% for a residential property and up to 50% for investment property. The cheapest house in the country is 350k and salaries $60k a year.

Great talk but you miss out on cash flow and your are stuck from the mortgage unless you house hack

Adding a dwelling unit is not a ordinary thing to do.... zoning laws wont allow you to do that. He's talking about a unicorn.... that's not the common find. I agree with him on putting that $ into improving them.

Loved this. However, wouldn't you say with the high interest rates, it's kind of digging into that "low" entry down payment? I'd say over time it probably ends up being 10-15% or more with the astounding interest rates. But I still loved the video and hope to get real estate of some sort this year. Hopefully through creative financing.

Also banks won’t lend money on home that needs a lot of work. How do we get passed that?

Ok so what about PMI?

I need help with raising or financing capital for building out the ADU’s on my sneaky rental. Can anyone assist?

You would need pmi insurance.? I like to see this done on real time. I belive it when i see it on paper.

This episode was very confusing compared to others.

So if I buy my first primary residence at a 5% down payment. I live in it for a year, possibly add another unit or two. I then simply find another house that I can see doing the same thing. 5% down again. But when I move out of first one after the year, I have no strings tied even though that is no longer my primary residence? The bank won’t come after me for more money as that’s how I leveraged the 5% down and not 20-25%? That’s the part I don’t get. Or after the year am I refinancing the first primary residence as in this example I rehabbed it and added units, adding value. I now get equity to move into another primary residence correct? The banks or whoever is fine with me just renting out that first residence even tho a year prior I said it’s my primary and how I only had to pay 5%? Sorry if I’m confusing or misunderstanding. It just sounds to easy to make that move to 2nd house so just want that clarified. Thanks!!

@jimmygalat

Жыл бұрын

Yep as long as you lived in it for a year. If you have your closing docs go through them and if it's a conventional loan it will say you will move in within 60 days and intend to occupy the residence for at least a year. After the year you don't have to even notify your lender and it is completely legal. If you never live in the property that's a whole different story...

So how do you go about switching your primary residence from your previous to the new home? and when you do that, what happens to the mortgage you already had on the first/previous house? stays the same? Also, I thought most lenders wanted/required you to do a 20% down, no? can you still qualify for FHA if you have very good income?

@Moe-jp3uu

Жыл бұрын

U still hv a mortgage if u cash out refinance ur first property. If u forced the appreciation, the value has gone up so ur rents should align with new value. FHA loans only need 3.5%. Use cash u got from cash out refinance to use towards next down payment

@sheamincey

Жыл бұрын

Following this method, when you go to buy your second house, the first mortgage is counted in your liabilities but the lender can credit you proposed rental income from that first property so it basically washes out. As for the down payment, you do not need 20% for conventional. Or at least not in this scenario. In general the minimum dp is 5% but in some cases you can put as little as 3% down. For fha, there is no maximum income/fico.

Hi David! New listener, 8 yr investor. Been using this tactic for 8 years and now it's starting to get more complicated with qualifying (DTI limits and restrictions) and trying to get more creative with progressing the portfolio. I would like to see what your take would be on what you would do in my situation or if what I'm doing is even a good idea. All of my investments are in the bay area with a mix of single family and multifamily looking to large scale house hack and I feel at times I'm getting in over my head as I am still learning new things every day and hoping that I don't have to learn too much if you catch my drift. I know you're probably busy, but I'm hoping my Bay Area investing journey would be interesting to you and maybe some listeners as I don't feel like my situation is too out of left field that other people can reasonably replicate. Let me know if we can link up!

@yrutryin2bme

Жыл бұрын

Are you literally living in these places for a year? Or "living" in them?

@Odelle8

Жыл бұрын

@@yrutryin2bme I actually did live in them

Good talk - it is essentially virtual hacking and smart. Though you have to prove that you are moving every year?

@jimmygalat

Жыл бұрын

You can prove it if ever needed by having your utility bills in your name.

Good morning, I listened to your podcasts often and have learned a lot, thank you. I am interested in real estate investing and currently paying a 2.87 % interest rate for a 4/2 2300 Sq home that I would like to rent. My mortgage payment is 1,188 including insurance and pmi. I can potentially rent it for about 2300 or room to room for about 2800. I am currently looking in my area for a fixer upper that I can move into while I fix. I called 2 lenders so far and they are telling me I cannot purchase another primary residence with 5% down which is all I have at the moment. They are telling me to refinance to get the 25% downpayment. No way am I going to do that. Question, do I have to tell lenders that I would like to purchase a rental instead of a primary.( my issue is not having 20% downpayment) I would also use the projected rent to help with my DTI since I am only now making about 55k/ year. My price range is around 250k. I am in Ocala Fl, lived in current home for 6 years and have about 170,000 equity. Thanks in advance. (Sorry for such a long text)

@The-Sentinel

Жыл бұрын

his recommendation is to purchase something the lenders can verify is a multifamily. You cant buy a SF home with intent to rent out rooms and call it MF. It has to be a duplex or SF with a permitted ADU at the very least. But you can buy a SF home and build an ADU or basement apartment from it and sell it as a MF home for the next person.

@sreehill

Жыл бұрын

@ivorine, I wouldn't refi that loan either, smart move! What I did to buy my 2nd home, was to find my next primary residence, with 5% down (as you're trying to do). You have a couple of options. The $170k in equity, you can get a HELOC (home equity line of credit) yet that has to be done only on a primary residence. Once you get approved for a HELOC, it's only on paper (electronic now) until you use it. It's very much like a credit card (cc), LOC = Line of Credit, just like a cc. I'd prob ask for $100k LOC to cover your down payment, and any rehab to both properties. So I'd get that HELOC in place with your bank or credit union. You only pay when you borrow the money. After that, you can look for the next home to move into so you can rent out your primary. At this point, your current primary becomes your rental and your new home becomes your primary. Reach out if I can help you understand any of this, I'm a new investor with my first investment property. Best of luck!

@ivorinegardner4119

Жыл бұрын

@@sreehill GM, thank you very much for taking time out to give such invaluable info. Really appreciated! Question, wouldn't the chances of getting a loan for second home with downpayment from HELOC work against me? Even though I only have my mortgage and a car payment where my daughter is also on the loan because I helped her to get financing. Payment $368. Since my employment income is only at 55000, wouldn't my DTI be too much with the HELOC. By the way, my daughter pays car payment , just graduated from UCF with Bachelors degree and has no debt and just establishing credit. She just turn 20 and is very responsible. ( Sorry for ranting, I'm just so proud of her!)

I want to do this but I don’t know how only putting 5% down is possible with these home prices and interest rates. In Canada, everything is insane.

@sreehill

Жыл бұрын

@Megs, it's insane here in the US too! A home has to "pencil out", lots of creative thinking sometimes to get the numbers to work.

It’s l142k with closing including I’m n escrow right now with this a similar buy at 485k

5% dp loans have income limit restrictions. Some ppl may make too much too qualify.

If you do save up 25k for your 2nd rental, don't for get you still need mun mun for the ADU or to rehab the basement into another room.

Where do I start? I am so tired of watching and reading..I am ready for action!

When you buy a single family and divide it into 3 dwelling units, do you run into municipality issues when you move out and get a rental license?

@seanbrownsociety

Жыл бұрын

Following...

@denvernow7294

Жыл бұрын

​@@seanbrownsocietyhere for an answer too.

In Pennsylvania you have to put down 15% on a duplex conventional loan even if it’s a primary residence. It’s 25% for three units or above even on primary residence. Where are you getting the 5% down number for multifamily primary residence?

@probst9999999999

Жыл бұрын

In California they were going to let me do as low as 3.5% down but the loan is enormous and most people would not be able to qualify for that

@kevincauto8080

Жыл бұрын

I live in PA. You either use a FHA 3.5% down on a 2 to 4 unit or use David’s strategy of buying a single family with a 5% conventional and dividing it into ADUs.

@gtajeu

Жыл бұрын

@@kevincauto8080 thank you for clarifying! I appreciate it

@sheamincey

Жыл бұрын

There’s certain conventional products that allow 5% down on a multifam but you have to meet their income requirements. It’s usually capped up to a certain point. It’s more so for lower income households.

So I bought my first property before Covid for 250k at a 3% interest rate and it has grown in equity since. I want to rent out this house and try to qualify for another mortgage loan to get a second property. I only make about 60k a year. Any advice or direction on how to accomplish this? Based off the video if I’m understanding correctly if you rent your house it turns into income instead of debt when they calculate DTI. Any advice would be much appreciated!

@cmc02888

4 ай бұрын

I'm close to being in the same boat as you/ you gotta get a new primary house to get the 5 percent down payment

I have a primary home loan for almost 2 years now, can I convert my primary home to a rental and apply for another primary home loan (3.5 % downpayment) ?

@LaughtersHouse

Жыл бұрын

Timing. You have a rental agreement that goes into effect soon after moving out of your primary.

@denvernow7294

Жыл бұрын

I thought the 3.5 was only for FHA, which is a one time deal?

@LaughtersHouse

Жыл бұрын

@@denvernow7294 oh no. You can do that a couple times

One thing they should address is the significantly higher mortgage payment when you put 5% down. If you have a high mortgage and still have to pay to renovate the house, it is very possible your expenses will exceed your income (if you are a moderate wage earner). Also, if you turn a single family into a multi-family you will pay more in property taxes. When you do end up renting it out, if the rent(s) don’t exceed the costs (mortgage, vacancy, cap ex, shared utilities etc) you may still be coming out of pocket after you move. My point: this approach is conceptual, you must run the realistic numbers to see if it will make sense.

I can't believe you quoted Dave Ramsey while talking about leveraging debt. 😬

I missed how to put 5 percent down%?

How do we buy a second home with 5% down??

@robaustin_

Жыл бұрын

He literally tells you how to in the video

I’ve done this twice now. And while I’m honestly living in the unit, I house hack and rent the other bedroom(s). Going for my third next year.

@CryptoUno

Жыл бұрын

This is my plan, each room is a unit.

@CryptoUno

Жыл бұрын

How long do you have to stay in the first primary residence? One year?

@pilotgirl5953

Жыл бұрын

@@CryptoUno yes at least one year.

My partner is in the process of purchasing his 2nd home that is a new build. We were hoping to rent each room as soon as it’s complete but I don’t think we can because of the loan type. We are more comfortable in our current home. Is there anyway we can stay in our current place and rent the new place without changing the terms of our loan?

@robwithrbk

Жыл бұрын

You can totally move into the new house and rent the rooms out. There is no provision in a regular owner occupied home loan that prohibits you from renting out rooms. The language on the loan application asks about your intent..."Do you intend to occupy as your primary residence" ...It doesn't ask anything beyond your intent.

@unapaloma1

Жыл бұрын

@@robwithrbk thank you so much!

Whats an adu