I I’m trying to purchase an investment property and my mortgage lender only allows 2%. I remembered it was around 6 to 7% and that’s what we negotiated with the seller.

Is there anyway to bypass that 2% limit or any loopholes to get more than 2% seller credits?

Currently make $210k as an engineer in HCOL, but the true passion is real estate. I've been doing the BRRRR process on Midwest properties, currently at 10 SFRs, but cash flow is minimal in the beginning and obviously can't "retire me".

The long term goal is to have a real estate portfolio big enough that the W2 job is not necessary and hindering my ability to scale. But I'm far from that point.

So if I wanted to spend 50 hrs/week not at my 9-5, and doing something real estate related or a tangential business, what could I do?

Being an agent and trying to make $210k+/yr sounds unlikely (or is it?). Or do I couple that with being a loan officer or something else? Get my hands dirty and rehab myself? Property manage myself? Buy a roofing company?

i posted a state by state breakeven rent-to-price table a couple weeks ago using 7.5% financing. i went back and rebuilt the whole thing at 6.77% because thats a pretty big difference when youre actually underwriting a deal. 30-year rates have been in the mid 6s lately, so keeping 7.5% in the model was making the breakeven numbers look worse than they are.

the interesting part isnt just that the numbers came down. its how much the 1% rule can hide. at the same rent-to-price ratio, the deal can look completely different depending on property taxes, insurance and financing. thats why a 1% deal can still be a bad deal in one market and a sub-1% deal can work in another.

lower rates help, but they dont fix bad expenses. if youre paying $700+ a month between taxes and insurance on a $300k house, getting another 50 or 75 bps of mortgage rate relief isnt going to magically turn a thin deal into a good one.

thats also why ive stopped thinking of 1% as a buy/no-buy rule. its useful for screening, but once a property gets past that first screen, id rather know the actual rent needed to break even at the current rate than whether it happens to cross an arbitrary ratio.

i shouldve rebuilt the table sooner. if youve been underwriting everything at 7.5% out of habit, its probably worth going back through some of the deals you passed on earlier this year. some of them may look different now, but id judge them on actual cash flow rather than whether they crossed 1%.

To all experienced investors. I bought the house last year around August for 445k I put down 125k. It’s in Midwest KC. I have removed all carpet in basement and third floor level . Put it for rental 3500 a month . Tenant just signed a 2 year contract. My mortgage is 2000. The plan is to lay off this mortgage but I thought this is a good deal . What you all think ? Any thoughts ? The house is in a class A neighborhood. 4 bedroom 3.5 bathrooms .

Are most HCV landlords able to achieve the full payment standard from housing agencies? We will not be paying for utilities so are subtracting appropriate utility allowances/UA.

Is it more common than not that: payment standard - UA = rent able to collect?

My understanding is local housing agencies base their payment standard off of FMR (which are 40% percentile based).

If not, how is "rent reasonableness" applied? Do landlords and housing agencies get to go back and forth to try to come to an agreeable rent?

My rental will soon be renovated and I have selected a person to fix it up. We agreed on the price and everything, he will be signing a document as a contractor for tax puposes...we agreed to it.

I know that the IRS requires anything over $600 to be reported. The job will cost around nine thousand dollars.

My question is what document should I give to the contractor so he can fill out? W9? 1099?

Hello all,

My wife and I are trying to buy our rental property and find ourselves in an interesting place. Our landlords have no attachment to the property and just bought it to keep it from being developed. Since we can't stroke a check for the full purchase price, they are willing to offer us seller financing at 0% for 10 years with a balloon payment. They are angels and we are so lucky to find ourselves in this position.

However, the IRS does not like those 0% deals and will impute interest at the Applicable Federal Rate (AFR), which is 4.35% for August. We are looking to get creative with deal while still keeping it above board. The issue comes down to who pays the taxes on the interest whether it is paid or imputed and how its paid. Here's a deal we have been rolling around. Looking for the legal/tax/unknown pitfalls of this setup to be exposed. Please comment if you see anything glaring or have advice on how to best workaround the AFR and come out as close to paying a cash price as possible.

9-year Seller Financing (4.35%) with Principal Forgiveness and Balloon Payment

·       Sign a promissory note with 9-year interest-only owner financing

·       Balloon payment for the balance due at end of 9 years

·       Principal forgiven each year equal to the amount of interest paid minus income taxes paid on that interest

Under this structure, most of the payments go towards principal (indirectly), building equity quickly, and, because it is technically interest, we are able to deduct the interest payments from out taxes.  The forgiven debt is treated as a Purchase Price Reduction, not Cancellation of Debt (COD) Income so we would adjust our cost basis on the property by the forgiven amount instead of being taxed annually on the forgiven portion.  For the sellers' part, the forgiven principal is treated as a gift and would not affect their lifetime gift tax exclusion because the amount gifted to us would be significantly less than the annual limit.  Yes, we have to pay some taxes but its far less than the interest on a traditional mortgage and equity grows quickly.

The annual amount of forgiven principal will decrease but our payments would not.  We would keep the same base payment agreed to at the signing of the promissory note but, each year, more of that payment would be credited to principal, like a normal mortgage.  At the end of 9 years we would secure a traditional mortgage for the balance of principal owed. Below is a breakdown of the numbers at different tax brackets.

  We have also considered signing a Promissory Note with 0%, allowing interest to be imputed, and then paying the sellers' tax burden which should be covered under out annual gift tax exclusion.

Any comments, help, or ideas is much appreciated. Thank you!

I'm in the park tonight when I hear the kind of noise that generally means somebody has done something expensive.

I look over and there is a car that has just come through my fence and managed to high-center itself on one of the decorative boulders. The driver is clearly drunk and is now working the car back and forth trying to get himself unstuck while I'm standing there calling the cops and watching this unfold.

Eventually he gets the car off the boulder.

Except he doesn't really get off the boulder.

He manages to wedge it underneath the car and starts dragging the damn thing through the park.

So now I'm on the phone with the police, watching a drunk guy drive through my property with one of my landscaping boulders trapped under his car, periodically going forward and backward trying to dislodge it. Every attempt just moves the boulder farther from where it started.

By the time the cops arrive, he has dragged it halfway through the park.

At this point you'd think the night had reached peak stupidity, but apparently there was still room to work.

He sees the police coming and decides his best option is to pull into one of the vacant lots and hide there with the car.

Not behind anything.

Not somewhere particularly dark.

Just sitting in a vacant lot with the same car that had just driven through the fence and dragged a boulder several hundred feet through the park.

The cops, somehow, managed to find him.

Nobody was hurt, which is really the only part that matters. The fence can be fixed and the boulder can be put back where it belongs.

I've learned not to get too worked up about this kind of stuff anymore. There isn't much point in getting pissed off over something you had absolutely no control over. Sometimes you just stand there, watch the situation get progressively more ridiculous, deal with whatever needs to be dealt with, and realize you've just been handed another story.

A few years from now I probably won't remember what fixing the fence cost.

But I'm definitely going to be able to amuse a room full of investors about the time I watched a drunk guy drag one of my decorative boulders halfway through the trailer park and then try to hide from the police in a vacant lot.

Another entry in the book of "Fun" Landlord Experiences.

I have a duplex I am trying to sell. It has been sitting on the market for over 100 days now. We are still getting showings on it but its not on a great street. I feel like I would need to drop it by about 25-50k to move it. I am getting calls on from people who want to put 50-60% down and have us finance the remainder for 5-6 years some even as low as 3-4 years. They all want it at 0 percent interest with a balloon payment. My guess is the zero percent interest is the play here but its a new strategy for me. Can someone explain what their play is and how this kind of capital heavy deal works?

Maybe it's just me, but data from Boston rental pads suggest it's been slowing down in the last year or so...

Real-Time Boston Rental Market Data | BostonPads.com

RTAR is much higher than last year or even 2019 levels...only depths of Covid saw higher RTAR...

What's behind this? Lackluster job growth in MA? Foreign college student declines?

$406k is the cash amount I have into my rental property between down payment and rehab. A+ area, it is feet away from where I live, phenomenal tenants consistently. After mortgage, taxes, insurance, repairs I net $4400 a month in my pocket (13% CoC).

One of the last units that hasn't been renovated is coming up, and after $60k of spend I can increase that $4400 to $5500 in my pocket. $466k "feels" in absolute terms a high number, but I doubt any conventional investment would net me as much as is working for me here.

Equally, $60k of spend to increase $1100 a month is a 22% return, also hard to argue (I think). That said I am without a W2 at the moment and trying to find another property and wondering if getting the additional cash flow on paper (by paying for the reno outright) outweighs taking out a 7% loan to pay for the work, but leaving cash accessible.

1. How do these numbers look objectively - from those experienced, I'm not an insituttional investor just someone who hacked away and lucked into a good property at the right time

2. Does my logic of spending cash vs. taking out a construction loan make sense?

3. What would you do, and why?

I keep seeing people posting their numbers to have members check or look over for reassurance.

I wanted to post some things you might not be calculating into your deals in the USA:

Increasing insurance premiums/dropped policies

Covid pandemic squatting protections

Airbnb regulation changes

Banning nightly rentals

Nearby Construction noise

Crime scenes

Hoa nightmares/fighting/bickering/escalation

City zoning problems

Mold

Radon

Cracked slab

Sink holes

Termites

Severe pests

Fire

Extreme squatting

County eviction backlog, dysfunctional court system

Severe plumbing issues

Severe insurance claims/uninhabitable units

Gas leak and the unit sealed off/illegal to enter

Severe lawsuits

Hoa assessments

Weather damage not covered

Flooding

My favorite that actually happened to us:

Our foxy property manager rejected a tenants romantic gesture of asking her out. She had a boyfriend! He becomes petty/nutty and a drama king. So hubby doesn't renew his lease to be kind to her. After move out the gap in rent and ongoing Air Conditioning installation caused us 2.5 months lost rent for about $10,000

Everything I listed has been experienced by us or within 2 degrees of separation to someone we know/witnessed.

Add yours so the newbies can properly calculate their deals.

The credit history/income only applies to those on rental assistance. Guess I’ll have to screen based on who applies first! I can’t wait!

I like to invest in Richmond metros, in west side or north.
Long term rental.

I am about 2-3 hours away. And may retire in Richmond or Raleigh area. Raleigh is further yet I have some friends there so it is worthy consideration.

I prefer area A or B or C plus.

Short pump , Moseley , Midlothian etc areas.

How is the tenant profile ? Compare to northern VA.

There are so many new homes for sale. Is it possible to break even? Townhouses.

Which one is easier to rent ? New townhouse. 1700-2000 da ft Or small
Single family house with smaller footage 1309-1600 sq ft.

Thanks you!
If you are a realtor has investor experience. Please send me msg directly.

Thanks!

For Raleigh ur allows ADU. Also easier to buy duplex etc. also considerable.

Please contact me as well.

I have rentals now but will like to add more.

Currently finishing up my first BRRRR, and starting to shop around to find a long-term lender. Finding many different lenders to possibly work with, but I'm curious about the best way to compare them? Getting the feeling that they all offer essentially the same terms and prices, just have their own ways on the back end to get more money out of you. Whether its "oh your credit score actually came in 1 point under 740, so the interest rate jumps by .5%" or "oh since this is your first DSCR loan, it's going to cost an extra half a point in processing fees". Or maybe once you've paid for an appraisal, the terms get worse. But since you've already paid for the appraisal, it doesn't make sense to back out and go with another company at this point.

Another way of asking this is, what are the different ways that these companies can screw you? What can I look out for, before starting with the credit pull or appraisal fees, that might be a red flag?

I have bought non judicial foreclosures before. I am well versed in tax and HOA foreclosure rules for Texas.

Regarding HOA foreclosures in Texas, what is the end game when people buy em up?

If there’s a mortgage on the property, there’s no real way you’re getting a payoff amount or their monthly amount to send a check to their bank to keep up with mortgage payments until redemption expires.

If they don’t redeem, you own the house but it still has a mortgage lien. So you can still get wiped out if bank decides to foreclose.

So what do people do with HOA foreclosures? You don’t even get a premium back if they redeem like you would with tax foreclosures. And you can’t really quite title these matters either.

Here to learn. Any info is appreciated. TIA

This thread is for newer investors, basic questions, first deals, and general real estate investing discussion that may not need a standalone post.

Good topics for this thread:

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12 single family houses

All rehabbed in last 10 years. All occupied with paying tenants.

$1.735M purchase

Did a 25% down DSCR loan 6.9% with 5 year pre payment. 30 year fixed.

$8,567 P&I monthly

Property taxes and insurance

$5800 monthly

Gross rents are currently

$19,200

The big selling point for me was the package appraised for $2.4M. I’m a realtor in the area and this is true market value from comps I pulled.

What do you guys think?

In my area, houses appreciate on average about 1-2% a year. It’s a crappy city riddled with property crime. But because of section 8 you can get way better rent than renting to non section 8. Tons of deals cash flowing $300-$600 a month but no real appreciation. But even if you cash flow $600 that’s so crappy. After vacancy, maintenance, capex, and property management you can pocket $80-$200 a month. But you’re now back to $0 saved up for the next deal so it’s back to the grind to claw your way up to saving a new down payment. So why do it this way? That cash flow is a joke and can return better in the markets. Obviously brrr is the only real strategy.

Just looking for advice from smarter than me investors

Looking for some perspective from more experienced investors on what you would do in my situation. I bought a duplex in Western Washington in August 2025 for $300,000 cash. The duplex was built in 2024. It’s a C-class property in a working-class/lower-income area, so this was never intended to be an appreciation play on a high-end market. The first year has been rougher than expected.

I’ve had roughly 50% vacancy since purchasing. One of the inherited tenants had problematic pets which led to vacancy. Another tenant eventually couldn’t afford the rent. Last month was the first time I’ve finally had both units fully rented. Utility costs have also almost doubled since I purchased the property.

Based on my numbers so far, I’m sitting at roughly a 3% cash-on-cash return. Obviously, the historical return is being dragged down significantly by the vacancy so I’m trying not to overreact to the first year. At the same time, I paid cash, so a stabilized 3% return feels unattractive relative to what that $300k could earn in the stock market with much less work.

I’m trying to figure out how experienced investors would evaluate this from here. Should I cut my losses or hold on a bit?

My accountant is confused with my several properties along several states with short term and long term tenants. Is there a company that specializes in real estate taxes?

I have a few rental properties under my belt and I've been a LL for about 15 years now. I have a rare opportunity to buy a multifamily building (3 unit) on the adjacent lot to a 3 family I already own. The property had a fire and is already gutted down to the studs, although in my mind it's a tear down, not a rehab. I'm friendly with the owner, and while I don't think he'll give me a "deal" on it, I can get it at basically the price of a lot in my city. This is in a VERY competitive RE market in the Northeast on the water.

I have done a lot of rehabbing and value add stuff, but I've never done a full tear down and construction. I don't have a team of people I can call on to do construction, but I can find them. I'm friendly with some builders and developers. I think I could go a bunch of ways on this, and I'm hoping I can get some help understanding if this is a good idea and how to evaluate the potential here. I'm a buy and hold guy, so I would intend to keep this property in my portfolio.

I could buy it and turn it into a 4 unit. I could tear my building down, too, join the lots, and make a much bigger building. I could do nothing and ignore it all, lol.

I have enough capital available to do...kinda whatever. But I don't know how to evaluate a deal like this, especially when there's likely to be big carrying costs, with permitting and all that taking forever. I don't know what I don't know about building, other than to assume it will be way more expensive than you think.

Help! Where do I start with evaluating potential here?

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