I've been watching the housing market closely, Prices have been skyrocketing for years. It's going to be tough for first-time buyers to enter the market." how can one diversify $280k reserve .
I agree, It's not just the prices, but also the increasing interest rates that are making it more difficult for people to afford homes. With a good FA you can make up your portfolio.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes. If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
@@imakedumbpeoplemad9399 not typically man no. If you're in a small town and already have a few interested Tennants than maybe you can tell them to swing by or Google Earth it. You can basically use some of the "projected" profit to help get the loan approval though. If you have a better relationship with an older aged family member, always use them as a co signer to get that low % interest rate. Whether you get a car loan or mortgage while you're under 30. Just get a co signer and don't fuck them over.
I have good credit(736)Just paid everything on my husband's credit. Waiting for that conventional approval because they do deny offer if it's from FHA. So yes it's hard.😢 And we are doing 20% down.
We’ve been in a recession since Biden got elected and the Dems tanked our economy handing our relief money. If you honestly don’t see the please…… don’t vote again.
Tbh now would be the best time for a variable rate rates will probably only go a little higher in the coming year maybe. 75 at most so if it cashflows at these rates you are probably good
Bro, that's literally how people get rich. You can either fall behind trying to be the good guy or join the pack and take advantage of what's infront of you. Your poverty is only your own doing.
In a communist society that would be the case, however this loan would push forward the real estate market and is helpful to the economy when used by those who are responsible enough to use such tactics
This only applies to aspiring slum lords. Most rented places are owned and run by companies or established slum lords, this crap keeps expansion costs low allowing for even more expansion. A lock-down doesn't ruin that, just slows or stops the adding of more properties to a portfolio.
@@robertmarsh5322 yeah thats not true robert. This is big city propaganda they want you to believe. Most are actually decent people who own a couple homes and rent them out. Most anti corporations people cheer on policies that actually enrich the rich even more. Lets tax the rich! They raise taxes on all of us but only the billionaires can afford the legal analysts to sift through the hundreds of thousands of pages of tax payer funded bureaucracy we call tax law to find loopholes.. Lets stop tenants from paying rent! Only corporations have the capital to keep paying the banks meaning the small time investor with one rental or two falls behind and those same corporations you despise get a fire sale.. You guys are the economic equivalent of flat earthers
@@trexasaurus5322 what with the minimum wage and inflation and all that other stuff stacked up, it's impossible in some places to save up to not be a renter. Even college, the thing you do to escape minimum wage, got turned into a debt trap. Probably for the sake of our military recruiting numbers.
These are excellent tips not everyone knows and great starting point to look into so regular working Americans can get started in real estate investment.
A couple of things to know are that your interest rates are usually higher with an FHA loan, and a lot of people forget that in addition to your down payment, you also need funds for closing costs. While some sellers may cover some of the closing costs, depending on your negotiations, they usually will not cover all. Closing costs can be anywhere from 2% to 6% of the total cost of the home. So, that means that your closing cost can be as much as, or more than, the money needed for a down payment.
He's a landlord. The plan is to pass the increased cost onto the renter. Plus a little extra because of the AWESOME service he provides as a leech... er.... landlord.
“I have plenty of cash so let me take advantage of a program that’s supposed to help people own their first home just so I can get my greedy fingers on other peoples hard earned money by artificially driving up the cost of housing”
@@Scotty-vs4lf the US isn't even a true capitalism This abuse hurts thw US government. Just acting like "well it's capitalism" that can be changed, it's not some universe law
But like it was . . . Literally was used to better the market to prevent building becoming dilapidated as fast and keep money in the nation flowing. Aka making more chances for landlords the gov needs people to rent out they offer tax incentives for a reason.
MIP or PMI is for the life of the loan unless your put more than 10% down. It then goes away after 11 years, but not if you didn’t put 10% at least down. You need closing costs as well, so maybe another 3%. FHA has many requirements as well, some features in older homes may not qualify once the home is inspected. Also if you have a home for sale you’d choose other offers before an FHA because the deal has a higher chance to fall apart, compared to conventional loan or cash offers. Just save up your money, you’ll be better off with a conventional loan.
Can confirm, FHA has certain additional requirements that can slow down an offer, such as making sure that things are updated to meet code. Lots of sellers of old houses are having to install railings that weren't required in the 70s.
Just don’t forget that refinancing isn’t free. If you’re buying rentals then you can probably afford it, but if your just buying a house you can afford be prepared to save up some money to refinance later on
Who are these people cause I know a lot of people who been kicked out the last 2 years. Like anyone who owed more than a months rent was out. Who are these people who don't need to pay.
@@beberexx5352 you know dumb people who fall for a landlord bullying them out of the home (or they are just morally good people who are willing to leave if they are not paying) Fact is they do not HAVE to leave because they did not pay and the landlord is mad. They MUST be evicted for the laws to actually prevent them from living there. Till they are evicted, the landlord can change the locks and that person has every right to break into that home to continue living there.
If I remember correctly, you can't just get an FHA loan for anything, you need to meet certain requirements. I could be wrong though as I am not an expert
You do and those requirements often are very strict on certain things like roofing. And you know what the crazy thing is? Sometimes they don't twll you until AFTER you close. My first home was 3.5% down on a townhome FHA loan and the roof was 17 years old. It was a 25 year old roof and then they told me after closing that I needed to replace it or they would foreclose it.
Perfect. Can we discuss how much closing costs on that loan amount will be with an FHA loan. Also first time home buyers may qualify for a 3.5% conventional (:
@Benjamin Good. I was setting up a property, took 2 years instead of 3 months thanks to artificial demand for the contractors, saw people lined up for housing, rentals with 50 applicants, got out of the market before the interest rates rose. People after lockdowns went insane, the housing market deserves a big giant crash right now. People need to stay where they are and make things work for a while.
building wealth is always a risk. some safer than others but always a risk which is why so many choose to live the simple life and just coast along fulfilling their daily habits.
I bought my triplex in San Diego, CA more specifically North Park. At the time it was not a desirable area and today it’s one of the most desirable locations. I put down the 3.5% required do the FHA loan, used the projected rent from the home being a triplex., and slowly renovated. You can definitely do this and it does work. The hard part is getting something that people won’t buy cash and getting something that has potential in gaining equity.
This is what I did! Househacked duplex on FHA loan. Rental income covers the monthly payment. I put additional money towards the principal to turn that 30yr loan to 23.5yr. When I refinance I'll probably put the money saved towards the principal to pay off the loan even faster.
In the 2000s banks gave loans to people who literally didn’t have a job. So it was more of extremely risky leveraging. Today you need to have income for 2 years, income has to be much more than the mortgage, decent credit score, and also not have much debt. Leveraging is fine if it’s low risk.
Yeah…go ahead and get to 20% equity then the interest rates have doubled so refinancing won’t work because you’ll pay more than the PMI. That’s what happened to me
If he gets to 20% equity he can refinance to conventional loan. Don't like the rates? Stick with what you got or refinance again after the rates come down.
@@tonyt4849 Not necessarily - when I was looking at refi costs, it was usually around $3000. I ended up doing a "rate modification" with the same bank that held my mortgage. The rate went from 6.5% to 5% - cost me $1700 upfront and I recouped that cost in 8 months.
You forgot to mention all the criteria that a property had to meet to pass FHA inspection. The property has to essentially be in PERFECT condition. Plus you'll get charged a much higher interest rate, plus PMI, plus the fact that you may not find renters. You'll also have to cover 3× the amount in maintenance because to attract good quality renters they're going to want their utilities paid, their lawns mowed, their drive ways plowed, and their toilets unclothed at 3am. Guys, FHA is not the way to go. Don't bite off more than you can chew. Save up and go conventional.
You forgot to mention if the seller is willing to accept your offer with an FHA loan. Most might want an easy process with someone coming in either all cash or a really good cash offer plus a traditional loan with minimal paperwork. At lease on their end.
@@khonhlo1476 yeah I forgot to mention this. FHA buyers aren't taken as seriously. Technically, according to real estate laws and fair/equal housing laws (they're all separate things), an FHA buyer shouldn't be turned down solely because they're FHA but it happens a lot. FHA is turned down on a lot of units and not taken seriously by a lot of people which is understandable
@@macfahad it’s not nearly the sellers market it was 1-2 years ago. FHA loans would absolutely be considered for a lot sellers as houses are staying way longer on the market with higher interest rates . Ppl shame FHA but if it’s the difference from you getting a great home vs an avg one .. might as well try
@@tonyt4849 understandable but i think a lot more sellers are considering it with the downturn in the market. Way less sales volume which is causing houses to stay on the market longer . If it’s difference from renting vs buying … might as well try . A lot of avg houses aren’t selling top of range anymore . Most Sellers have to compromise now .
I did exactly this with a duplex that came with a long term tenant. 6 years later we're both still here, I refinanced at 2.2% and eliminated the PMI, our kids our friends, and she's been a perfect tenant. Good luck out there.
With fha loan buyers ,customers almost always need at least double that 3.5% of the purchase price saved up before making an offer when everything is said and done. There are inspection fees, appraisal fees, closing costs, earnest money (and due diligence money if you are in a weird state) all on top of the actual down payment and not cover by the loan itself (but seller’s concession for closing cost can be negotiated) .
You forgot the FHA loan limits in the area, need a 1 year lease of the renters that are going to rent the other rooms, and FHA customers never have money down 🤣
I live in Southern California. We were first time home buyers so the FHA worked for us. We didn’t need a lease agreement from our renter or anything. We didn’t even have a renter when we got the loan. They just asked us what comperable places in the area were renting for and they put that toward our “income” to get us approved for the house even though it was more than we were originally approved for. We ended up getting a renter after closing on the house. We refinanced 2 years later. 👍🏻
@@jessicaripko “they just asked us what comparable places in the area were renting for and put it towards our income” that’s just straight up bullshit.
Real estate agent here FHA has a cap... it changes based on your area. Our area has a cap of 375,000. Same with usda loans. Their cap is higher but they are harder to qualify for.
Yeah... We need to tax the hell out of second, third, and further homes. Crap like this is what's ruining the economy and pricing first time buyers out of the market.
Depending on where you live they may be taxing a lot already. We, the landlords, just add it to your monthly rent. You pay the tax. Get that straight, it's not negotiable. The demand for shelter is inelastic.
I got talking to someone in a laundry plant while doing work there. During the real estate gold rush in the early 2000s he had 26 houses and lost every single one of them when no one would refinance him. If you're gonna do this be sure to get a fixed rate loan and pay that bitch off as quickly as possible. Perhaps sell it at some point if you get enough equity built up and buy something with cash that you own clear.. Live in a tent down by the river and rent out all 3 units.
Mortgage insurance is to protect the bank in the event that you fall off the face of the earth. Once you have enough equity there will definitely be a bank willing to loan you money without insurance. Unless your house has done nothing but go down in value (after 15 years this is impossible) you’re just not talking to the right people.
weapons grade retard right here. If you have renters that means you are literally giving them a place to live in return.... and they let you idiots vote and we wonder why we're fucked now
@@chomp7927 You aren't "giving them a place to live". You're letting them live in your house as long as they pay rent. There's a massive difference. In this instance, the landlord doesn't have enough money to afford the house, and the renters are the ones actually paying off the mortgage, yet the landlord gets everything at the end. Shelter is a human necessity, and landlords exploit that necessity to turn a profit at the expense of the poor. They don't give people a place to live, they make them pay more for it.
@@zachs.4371 you dont understand what's happening. Every house u buy or rent obviously u making the other person money and spending urs to life in this situation instead of someone already having the house the person is going to pay in time and they do what others do make money and he decide to use that money to pay for the house like u can do anything with ur money.
And, there are a lot of state and local programs that can help you out too. It helps to have a good real estate agent. I just bought my first house with 3% down, no PMI and a fantastic interest rate. And, my loan officer got another $3000 credit on top of all that because of another program. And it was a conventional loan, not an FHA. The total amount of cash i had to come up with was 12k. And although I will be renting my other two rooms out as well, I can swing the entire mortgage by myself.
I was 19 years old and was house shopping because had kid on the way this one old lady showed us 2 houses that where not what we where looking for then she decided since we where so young she didn’t think we could afford any house she needed proof we could afford it I told her to wait couple days I got a new real a state agent he was really nice didn’t question us we bought a house I FaceTimed her showed her the deed of trust and told her is this proof enough and told her this real estate agent was happy he got %4 commission
Good way to get started. once you own your first property, you are simply rolling it over and refinancing to obtain more. A FHA and VA loan are good ways to start. Saving up buying a multifamily cash is thew best way to start because then you can finance and get 2 properties while only paying one loan.
That’s not true. It doesn’t matter to a seller, sure a cash offer is more likely to go through with closing but an FHA these days usually doesn’t fall through.
I've grown up in a construction family and, in a few years, will be joining the military as an officer. I know everything about flipping, so I'm going to use the military's va loan to buy a house where I'm stationed, flip it, and sell it when I get moved to a new station. I know a few veterans who did the same thing and saw great returns.
Values aren't screaming up like they used to. My PMI came off after just a couple years of ownership just a couple years ago. Refinanced twice. Good luck with that today
I'm sure this has been covered before, but if you've served in the military, a VA loan typically requires 0% down and NO PMI! You can still put a down payment if you're able, and if you're able, you should.
I think my main takeaway from this video is that even with all the loopholes it is still much easier to pull all that off if you already have a lot of money. But good on you for buying three more homes.
FHA requires a sqweaky clean home-inspection, which means your only chance is if the seller didn't get any cash/traditional-mortgage offers. No one wants to deal with flaky FHAs. Also good luck with maintenance, should have listened to your realtor.
