How to Buy a Rental Property with 5% Down (Sneaky Tactic)

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Title	:	How to Buy a Rental Property with 5% Down (Sneaky Tactic)
Lasting	:	12.10
Date of publication	:
Views	:	124 rb

Yeah but the problem is what happens when you have no tenants to pay the rent?
Comment from : Hall of Fame

Who wants to move every year That's don't make sense also debit to income to get these properties don't conventional go in your name and not an LLC?
Comment from : Lovely

Can't imagine how many people are going to try this and find out the harsh realities of zoning laws, permitting, etc Not to mention getting blacklisted for trying to bail before FHA loan has seasoned
Comment from : mytuberforyou

The first problem is buying an $500,000
Comment from : Jay Wills

Just do the DSCR loan
Comment from : Jay Wills

Missed about 24 months of equity😂
Comment from : Jay Wills

We didn't share it because we knew our listeners were just not going to do it brWhy in the world would you subscribe and listen and invest in you Makes mebrRealize that most people like yourself are only here to helpbrYourself
Comment from : Kryptonite18

what country do these pertain too? Canada? the USA? Other?
Comment from : 2-POINT-O

Lost me at historically low and 6-7 😂
Comment from : Fun With Guns

Buying houses as primary house with intention to convert it into a rental immediately, after few months or after 12 months is a fraud All lenders ask you to sign a document that you are buying the property as your primary house Instead lying intentionally is violation and you may end up losing the loan, house, fine or even jail
Comment from : atul rastogi

Or, you could utilize creative finance and buy as many properties as you want
Comment from : Jake Villaret

6-7 is now low interest? If you purchase with such a low down payment and take a 6 loan, you better bet you wont have the income to cover the mortgage House prices have NOT come down enough to compensate for the high interest
Comment from : RadarUser

How is this sneaky? I’ve done conventional with 5 down on all of my rental properties In this day and age it doesn’t work as well because rates have gone up so now I add a bathroom etc which results in almost the same cost and the same cash flow as if I had just brought the 20 downbrI fail to see how this is sneaky or earth shattering This is just common knowledge and not always the answer to what you’re seeking which of course is cash flow
Comment from : Stacy Smith

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!
Comment from : Tommy Nguyen

Hi i have heard so many podcast on pandora your podcast to be exact i love all the info thank you
Comment from : Alacrity Landscape Unlimited LLC

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
Comment from : Alex Kimball

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 ?
Comment from : cesar rios

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
Comment from : Dalton Evans

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 tomove there
Comment from : Miss V/Move ya Body!!!!

The most important thing that should be on everyone's mind currently should be to invest in different sources of income that doesn't depend on the government Especially with the current economic crisis around the word This is still a good time to invest in various stocks, Gold, silver and digital currencies
Comment from : Susan Nico

This is basic bitch education
Comment from : Liberty or Death

I appreciate you! Thank you for sharing your knowledge on the subject
Comment from : Ruben Gonzalez Jr

Isn't this a dangerous method to get into debt?
Comment from : J Zap

What time does this show come on?
Comment from : msmoenergydet

Good luck in NYC or Cali
Comment from : Josh

Also banks won’t lend money on home that needs a lot of work How do we get passed that?
Comment from : Adan Rodriguez

Do you have to pay the house of in a year before you finance another 1?
Comment from : Adan Rodriguez

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
Comment from : MrVirus9898

They just lost me with 6/7 interest are still historically low 😂 what a joke
Comment from : Ismael Alejandro Guardado

This is how im going to afford my 10 acre compound
Comment from : ItsBioDigitalArt

Lol Not the best video to post during the worst real estate buying opportunities ever 🤡
Comment from : AngusAmongUs

I can't believe you quoted Dave Ramsey while talking about leveraging debt 😬
Comment from : NinersRingingIt

Can somebody please tell what is this? I get lost no matter how many times I watch it Is he talking about BRRR? Sounds like it Is it another way to call it like that? Thank you
Comment from : Rendy Richiez

There is no way that I would buy a single family home, as a rental investment, for anywhere near $500,000 Unless it rents for $5,000 per month, it doesn't make sense
Comment from : Anthony Dooley

Yep, if life was perfect like that!!!
Comment from : Dave Meraz

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

How can you get a mortgage for a primary residence when you already have one ? 🤔
Comment from : Rafy 600

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
Comment from : Garrett

Is this possible for group homes
Comment from : NOBLE BEAUTY cosmetic

Would you need to start a business first?
Comment from : Marco Houdini

That’s sounds good But what if you have small kids? Are we supposed to move every year? Change schools ?brThat’s my only concern on this…brHelp?
Comment from : Daniel Nabinger Silva

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
Comment from : Eric Jeanette - Home Finances

This episode was very confusing compared to others
Comment from : greenhawk655

This is awful advice well meaning but also terrible You are saying leverage up infinitely , with the thinnest of margins
Comment from : Benton x

Whats an adu
Comment from : Mike Affholder

most banks I have tried automatically close doors to wealth I'm in Iowa super hills have eyes How do I get around banks that discriminant
Comment from : Ricky Sandoval

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?
Comment from : Arielle B

Rent to your fiancé
Comment from : WESTERN NY BIGFOOT

5 dp loans have income limit restrictions Some ppl may make too much too qualify
Comment from : Tony Gatdula

Historically low interest rates? Lol lost me there thats very high
Comment from : Average Human

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
Comment from : Christopher

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

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

Im still a little confused I purchased my first home last year First time buyers program, FHA loan, 35 down So if i wanted to get another property, id have to make that one my primary residence and my first home a rental property in order to pay 5 down? Can someone please clarify? Thanks!
Comment from : german rodriguez

I need help with raising or financing capital for building out the ADU’s on my sneaky rental Can anyone assist?
Comment from : Adam Cooper

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

Love your infobrThanks for the advices
Comment from : John Cano

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
Comment from : Amy Mitchell

No you cannot, if you have a property already, any next property it will be 20 + This only works when you are first time buyer
Comment from : Petar Doychev

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
Comment from : Domenico Geria

Things I don't like about this video:brbr1 Sneaky rentals is just house hacking, there was never a time where bigger pockets didn't share this before lmaobr2 There is no mention of the actual mechanism for this to work which is an FHA loanbr3 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 buenobr4 No mention of PMIbr5 No mention of how your monthly will skyrocket in comparison to a 20 percent downbrbrthis 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 stuffbrbrVery disappointed, Brandon would never do stuff like thisbrbrThe 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
Comment from : Sahm Samarghandi

I’ve been trying to do this with a 203k loan, marrying it foreclosure
Comment from : Rezzy Doc

Bro the content is 🔥 ThanksbrbrI currently have 5 properties, all pre-construction attached townhouses 3bd 25 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 unitsbrbrAny other suggestions?
Comment from : Raman Kainth

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

Disagree about vegetables, but I appreciate all the other great advice
Comment from : Mike

Love it! This is how I bought my first two sfh in Phoenix I got in to the first one for 210k at 35 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
Comment from : Andres Cardenas

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 287 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)
Comment from : Ivorine Gardner

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?
Comment from : Pamela Del Rosario

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?
Comment from : T H

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?
Comment from : T H

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?
Comment from : Lovely MsVee

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
Comment from : ice guy

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
Comment from : Megs_ ae

How do you prove to the lender that it will be your primary residence if you don’t plan on selling your first home?
Comment from : ed romero

in theory it sounds easy, in reality not so much
Comment from : AJ -

I've done 4 primary residences in the same town over 4 years I feel like i'm borderline mortgage fraud Please prove me wrong
Comment from : Anonymous Person

Also can do 15 down on a vacation home (2nd home) Allowed to STR the vacation rental ;)
Comment from : Anonymous Person

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

What's the secret here? Buy a primary home with a conventional mortgage (20 dp) and rent it out after a year? Or is buy a MFH for 5 down? Not following
Comment from : G&G

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
Comment from : Kyle Stricklin

Some folks call this bank hacking
Comment from : Aaron Hope

How do you get 5?
Comment from : Negar Hekmat

So the secret is every 2yrs you buy a new primary and rent out the old primary
Comment from : Jason Rogers

Where do I start? I am so tired of watching and readingI am ready for action!
Comment from : Tania Matthews

Please the intro music is god awful
Comment from : Simon Timbers

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!
Comment from : Odelle8

There is some nuance to what they’re indicating that does not make this 100 accuratein 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
Comment from : Marvin Orieh

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

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
Comment from : Matt Helm

Why do I get the feeling that being a landlord requirement in the future will be a sidearm? Just saying Either way, great show
Comment from : K ZEN

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

How do people split utilities with ADUs?
Comment from : Jason DOE

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
Comment from : Fernando Tello