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Student Housing, Lease Options, and How to Buy with High DTI


Student housing investments can make you killer cash flow. If you invest in college towns, students will pay a premium to be close to campus and won’t mind living in a property with three, four, or five other roommates! This means you can squeeze six high-paying tenants into one single-family home. But more money means more problems, and your investment property could become a party house overnight. How do you keep the cash flow and avoid the headache? Let’s find out!

David is back on Seeing Greene to answer your real estate investing questions, and his partner in crime, Rob Abasolo, joins in to add more investing firepower to this episode. This time, the dynamic duo will touch on student housing investments and whether fitting six (yes, six!) students under one roof is worth the risk. Then, how to invest when your DTI (debt-to-income) is too high. One investor asks whether a lease option is the best way to sell a property, and finally, we’ll finish with the great debate: pay down your mortgage early or save the money instead.

Want to ask David a question? If so, submit your question here so David can answer it on the next episode of Seeing Greene. Hop on the BiggerPockets forums and ask other investors their take, or follow David on Instagram to see when he’s going live so you can jump on a live Q&A and get your question answered on the spot!

David:
This is the BiggerPockets Podcast, show 855. What’s going on everyone? This is David Greene, your host of the BiggerPockets Podcast, where we arm you with the information that you need to start building long-term wealth through real estate today. Today’s show is a Seeing Greene episode. That means that I am going to be answering your questions directly related to real estate, and I brought in some help. Rob Abasolo will be joining me on today’s show as we offer insight from our experience and the things that we’ve seen in real estate to help our question askers and you grow your wealth through real estate. We’ve got an amazing show including a guest, what we brought on to go back and forth live when we are recording and you won’t want to miss it. Definitely keep an eye out for when we discuss if you should use a lease option on a house hack or not.
If you should pay down your mortgage or save more cash with the extra principle that’s left over. What to do when DTI is stopping you from scaling your portfolio. And joining us live, Karl is asking about building student rentals and if he should add extra bedrooms to generate an additional $1,200 of income a month or if the headache is not worth the return. All that and more on today’s show, let’s get into it. And welcome, Karl to Seeing Greene. Karl has 30 years of real estate investing experience. He also has an incredible head of hair, I love it. If you’re not watching on YouTube, you need to go check it out. Karl’s a real estate broker, a general contractor, and even an auctioneer, although he doesn’t do a lot of that anymore.
He’s built hundreds of spec homes and then got into build to rent, which was similar to the BRRRR model before we called it BRRRR. Karl, you’ve also built a solar farm, this just gets better and better. And you’ve got some plans for leasing that out to an electric company and then possibly adjusting if they don’t want to renew the lease. As well as a small mobile home park that you own as well. So let us know… Frankly I’m wondering what it is that we could answer that you don’t already know to answer for us, but what’s your question? Let’s see if our audience could maybe benefit from this.

Rob:
How could we possibly help?

Karl:
Hey guys, I listen to you guys religiously, so I appreciate y’all having me on. I’m kind of excited, I get a two for one here, both of you.

Rob:
We are happy to serve, sir.

Karl:
Well, my question is in the realm of David’s favorite investment vehicle to promote newbies especially, and that’s the house hack. Specifically, I’m talking about a house hack, we call it the OG of house hacks [inaudible 00:02:35] college roommates back in the day. By the way, this is in an SEC college town, major SEC college town. And we have a business model of building four bedroom, four and a half bath houses. I have a partner… I’m in Chattanooga, Tennessee, he’s at the other location. And I’m looking at the David Greene formula of more parking, more bedrooms. If four is good, six is better, and the land will hold six.
But my partner, he’s pushing back because he has some concerns and he’s not wrong. Concerns are students are more drama than the normal renter population. They get in fights, they don’t get along and they want to change tenants or leases and add different occupants, stuff like that. And number two, they’re more damage, more wear and tear, house parties, noise complaints. So my question is, am I exponentially adding to those problems by adding two bedrooms? What opinions do you have? What ideas have we not thought about that you two could share?

David:
So one issue is if we build four bedroom, four and a half bathroom homes, but we’re going to be renting to students and then we make it a six bedroom home, we’re effectively increasing the size of it by a third. But are we also increasing our headaches by a third? So that’s one thing you’re trying to figure out is if we’re going to be renting to students, should we just keep it to four? And then was the other part, “Should we be renting to students at all because they’re a headache?”

Karl:
No, that’s not the question. The students pay a premium because they’re students and they’re a headache. That is what it is, and that’s the market.

David:
Okay. I like the six bedroom idea. My thought would be if you didn’t want to deal with students, you just shouldn’t be renting in student housing. If you’re going to deal with four of them, dealing with six of them isn’t going to really change functionally how the thing operates.

Rob:
100% agree.

David:
I thought you were going to say something like if we have to sell it, it’s harder to sell a six bedroom house and a four bedroom house. So I was sort of formulating this plan that well, what if you build… You’re building it so you get to decide the floor plan, you build the bedrooms next to each other, so you could just knock down the wall and turn it into two king suites or something like that. But my guess would be your cost of construction, the extra bedrooms and square footage will be minimal. The extra bathrooms might be a little bit more money, but still if you’re building it, you’re getting it at a much better price than if you’re buying a six bedroom. I would definitely go for this and I would just put that energy where you’re concerned about the students possibly messing up the house into just picking different students. What’s your thought, Rob?

Rob:
Same thing. Basically it’s like you either rent to students or you don’t. I don’t think that the four bedroom to six bedroom situation is going to change your headaches, I mean maybe. But I still think you can implement proper vetting techniques. If you get a group of frat guys that say that they like to drink Coors Light every day, then yeah, you probably don’t want to rent to them. So I think you want to figure out who your avatar subset is within the student body, but I don’t know. And granted I wasn’t that crazy in college and I split a house with 10 guys and it was like a four bedroom. So I don’t think going to six bedrooms really would’ve tipped the scales. I think it’s all about putting proper tenants in place, ultimately. I think it’s more of a vetting problem than a size of the house problem.

David:
One thought I was, having if I was building houses where the concern would be students, the upside is you get more students, they pay more. The downside is the parties. Can you structure the floor plan to where there’s just smaller common area? And so basically when they go to the house, they just kind of have to go to their room because there’s not a whole lot of places to hang out at all so they can’t have a party.

Karl:
Well, that is a concern. We were going to have to add a little bit to the common area. It’s basically an open concept kitchen living area where they put their TV, and a washing machine room is not far off that. But yes, any way we can limit them from having house parties is great. But house parties are just part of the college experience. I’m not trying to paint a picture that students are just debauchery, but it is part of the experience and it’s part of what goes with it.

Rob:
Well, I’ll say this, look, a lot of people that want to get into short-term rentals come to me and they’re like, “But what about the parties? And what about the crazy guests? And what about this?” And I actually just have a prescreening set of rules when people book my place, I’m always like, “Absolutely no parties. There will be $1,000 fine. If you steal my towel I’ll charge you $100. If you lose my keys, it’s a $500 fine.” They’re really crazy. It would make most people say, “Heck no, I’m not staying here. This host is crazy.” But guess what? And fingers crossed, I’ve never had a huge party in my properties because anyone who would throw a party reads my rules and they’re like, “Heck no, we’re not staying at this place.”
And normal people who read my rules are like, “Yeah, we’re not going to do any of that,” And they end up booking my place. So I feel like whenever you’re actually putting your listings out there on Craigslist and all that kind of stuff, I feel like you could be pretty bold with your listing and very clearly paint that it’s kind of like a no BS property, no parties whatsoever. And then if you get a group of squeaky guys in the math club, you probably don’t have to worry too much about these guys throwing parties every week, right? Listen, math guys…

Karl:
They party.

Rob:
… Party

Karl:
Nerds party.

Rob:
Not to the fullest extent. I was going to say I was one of those squeaky math guys, but unfortunately I just looked nerdy. I was not smart.

Karl:
Well, I don’t believe the part about you were not smart.

Rob:
I was street smart, how about that?

Karl:
Okay, I’ll agree with you on that. We have that in common.

David:
Karl, what is your experience so far with renting out to student housing? Have you done it yourself?

Karl:
I don’t manage them. My very first investment property was a house hack when I was in college at this very university studying real estate finance. I bought a place and rented it to other guys, but I never really considered it a viable ongoing vehicle until I started listening to you guys, and kind of wish I’d maybe done a little bit more of that. But I let a friend of mine, my business partner, handle the rental aspect since he’s local. I just mainly hear his stories and like I said, he’s pushed back and doesn’t really want to do the six bedroom thing, so I’m trying to convince him otherwise.

David:
I’m trying to figure out why. He’s got something in his mind that’s causing him to literally vocalize to you he doesn’t want to do it. Do you know what it is?

Karl:
The exponential increase in problems of just having that group living together.

David:
But then building a house does the same thing, right? Him managing another house exponentially increases his problems, he’s willing to do that. So why do you think he’s willing to do [inaudible 00:08:54] four but not six?

Karl:
I can’t specifically add any more to that because that’s the reasons he’s given me.

Rob:
Karl, what’s his name?

Karl:
Michael.

Rob:
Michael, okay. So Michael’s probably listening right now. Michael, just do it, it’s fine. The difference between a four bedroom to six bedroom is like… Of course once I say that they’re going to have parties every day. But it’s fine. I think really the best thing y’all could do to be honest, is just talk to… Find five other people who do student housing between four, five and six bedrooms and just talk to them about their experience. And they’re all probably going to be like, “Oh yeah, we’ve seen some things but totally worth it because we make way more money.” That’s usually the case with any amount of… Look, higher money means more work, that is just the rules of the road. Long-term rentals, least amount of work, least amount of cashflow. Short-term rentals, most amount of work, most amount of cash flows.
And so the more work there is and the more maintenance there is, the more money there is. The more volatility there is, the more money there is. So ultimately if you guys are trying to make a really good return and you’re building this from scratch, I think you’re going to get a bigger equity play out of a six bedroom place than a four bedroom place. I’m sure the demand for a six bedroom place out there is pretty high too in a college area where there’s probably… They’re always in demand in any college town I feel like, right?

Karl:
Right. And the students today have a higher standard of living demand where they want one bedroom and one en suite bath per student, and there’s a limit to that. And so I think this question is somewhat relevant to any college town that has a shortage of housing or a need for updated housing.

David:
I just think you make the floor plan inconvenient to having a party, not a lot of common areas. Like I’d be designing a floor plan with a small loft on the top where they could… Big enough to put a couch or two and a TV and that’s it.

Karl:
Well, there’s a backyard, a front yard, a street, a side yard. They find ways.

Rob:
What I would do is at the store, they have those little spiky things?

David:
Like they’re pigeon?

Rob:
On the awnings so that pigeons don’t land on, just install a bunch of those inside the house.

David:
My mind went to the same place in the backyard, that’s the same thing… You got all your patio furniture back there with those things on it, picnic tables with those things on it. You install some fire sprinklers in the backyard that just on their own go off every 30 minutes or something for anyone standing back there, they get soaked. Yeah, I’m definitely, Karl, of the mindset that you advertise it heavily, “This is not a party house. Strict lights off policy will be enforced at 10 o’clock at night,” or something like that. This is a house for students that want a safe, friendly place to live where they can focus on their studies. I don’t know, it’s been a while since I’ve been in college. I wasn’t a partier, I was not drawn to partying. I felt like there was a lot of us that were in college that weren’t partying, and I would’ve not wanted to live in a place where other people were making a lot of noise.
It was like I was working every night, I came back, I just wanted to go to sleep because I had to wake up in the morning to go to school. I think about my partner, Christian, he went to UC Berkeley and he studied chemical engineering. It just probably wasn’t a whole lot of fun being had because they were studying all the time. You’re going to get those students and those are the ones you’re going to want to market to. And the manager might just not have great systems set up to screen those people out, but you can be picky. If you’ve got a bedroom that has its own bathroom, you can be picky about who you let stay there.

Karl:
I agree with you, when you look at the additional investment and the two and a half year payback, it’s a slam dunk.

David:
Yeah. Not to mention if you decide you want to sell, you got two extra bathrooms, you got two extra bedrooms, you got the extra square footage that could be combined to make bigger bedrooms. There’s some flexibility there. It’s just the objectively right move to make from a real estate perspective, it’s the management perspective where we’re really having the problems. So rather than altering the real estate itself to make it fit the problem, or avoid the problem, let’s just focus on the management element of it to try to solve that problem instead.

Karl:
Sounds great.

David:
All right. Well, Karl, thank you. I appreciated that you brought the one question that we actually probably could help you with, with the background of experience that you have. Very impressive person. Glad to hear that you’re a fan of the podcast. We are definitely a fan of yours, so thanks for being here and let us know how it goes.

Karl:
Thanks guys, appreciate it.

David:
Well, thank you for that, Karl. What did you guys think about Karl’s situation? Was this interesting? Have you ever considered building to rent yourself? Are you afraid of student housing or do you think it’s a good play? Let us know in the comments on YouTube. And while we’re there at this segment of the show, I like to read comments that y’all have left on previous episodes to see what you’re thinking and what your questions may be. Our first question comes from Nano, “Hands down the BP platform has revolutionized REI for a generation of Americans. And it’s been done with the spirit of generosity, anybody could pay pennies on a dollar for intellectual capital that will pay big dividends if he or she’s willing to put the work in. I don’t know what Josh Dorkin’s vision was when he started this machine, but it continues to create and inspire shared value that you seldom see in business and industry. Cheers to BP, Dave Greene, and all the BP stakeholders.”
Well, thank you. What a sweet comment. Next comment comes from Aaron H. 96 60. “In my opinion, building is the only way to achieve a reasonable return in this current state.” Thank you for that. That comes from our question of if building to rent makes sense or if we should stick to buying. And a few shared tips in the comments as well. From Kyle Strickland, “A multi-screwdriver and an Allen key set must be at your short-term rental in the supply closet. Also, a little bottle of lock Loctite. These are must haves.” Tammy Russell chimes in, “And light bulbs. Every time I step foot in one of my properties, I can expect to be changing out spent bulbs.” That’s funny because I’m at one of my properties in Maui right now and last night as I was laying on the couch, I looked up and realized there was like five light bulbs that are all worn out. And I don’t have any here to change them, so I will be finding some hardware store in Maui to do that myself.
And our last comment comes from Cabin King, Lamp King. “The beard is looking fire. A HELOC has helped me to double my portfolio in the last five years.” I’m going to assume the beard is looking fire comment is meant towards me, which is probably why we picked this comment if we’re being honest because I’m not above flattery, so thank you. If you would like to be featured on Seeing Greene or have your comment answered in a future show, just remember flattery won’t hurt. But more than that, let me know what have you thought about today’s show so far? What have been your favorite parts of it? And what do you want to see us cover on future Seeing Greene episodes?
And before we move on to the next segment, we’ve got a comment that someone left on Apple Podcasts that said, “Simply life-changing. I discovered BP in late 2020, shortly after discovering the world of REI, I’ve been hooked ever since. The show continues to deliver real-time, relevant actionable advice. Over the past two and a half years, my wife and I have worked together to acquire one long-term rental and two short-term rentals. We wouldn’t be building the portfolio we are today have I not educated myself, and BP was a huge part of that. Love the content, Dave and Rob, you guys are rock stars. Keep up the strong work.” That’s from Mortavious via the Apple Podcast app. Thank you, Mortavious. All right, we love you guys and we appreciate your engagement. Please continue to like, comment, subscribe to our channel, and submit your questions at biggerpockets.com/david. All right, let’s get into the next question.

Danny Gibson:
Hey David, my name is Danny Gibson. Absolutely love the show and always appreciate the advice that you and the rest of the crew dish out. My question is in regards to how to continue to scale once I’ve maxed out my debt to income such that I’m unable to buy another property conventionally. I own a couple of duplexes and a single family in the Tampa Bay area and I’m trying to assess the options available to me. Few that come to mind are increasing my income, although I just moved into a new job, which actually helped me increase my income enough that I could buy the single family. Second would be to lower my debts.
And then a few other options are like partnerships, [inaudible 00:16:50] loans, although I’m unsure whether properties would cashflow or even break even with [inaudible 00:16:56] loans, just knowing how high interest rates are right now. And then the final piece is credit financing, something like seller financing. But broadly, are there any other options I could consider? And is there a “typical path” that investors typically pursue once their debt to income has become too high? Appreciate, I’m looking forward to the answer. Keep up the great work. Thanks.

David:
All right, thank you, Danny. First off, congratulations on buying so much investment property that you can’t buy anymore.

Rob:
That’s really great.

David:
Yeah, it’s not a bad problem to have that your-

Rob:
It’s a good problem to have.

David:
… Debt to income ratio-

Rob:
Good problem to have.

David:
… Won’t support it. So you should get some kind of BiggerPocket sticker for achievement unlocked.

Rob:
I feel like we should reward people like him because I was just at a conference that was about raising money and what was really cool about it was that everyone in that room was a seasoned real estate investor who ran out of money because they bought so much real estate, and so they were just there to learn how to raise money. And I was like, “That’s kind of [inaudible 00:17:57] cool.” It’s a different vibe that I’m used to. So he’s in this very special place where he’s killed it. He’s used all his money, and he’s like, “Now what?” This is like the hardest corner to turn when you’re in real estate, I think.

David:
Well, there are some options here to turn that corner. So the first you mentioned it, Danny, will be the easiest and that’s just using a DSCR loan. These are loans that stand for debt service coverage ratio. They’re new in residential real estate, but they’re not a new way to underwrite real estate at all. This is really how we’ve underwritten commercial real estate for as long as I’ve been around, where the lender will say, “All right, the expenses on the property are X, as long as the income is the same or greater than that, or greater than that to a certain percentage, we will let you borrow based on the income that the property is going to produce, not the property that you produce.” So debt to income ratios is a way of measuring a human being’s ability to repay something. And DSCR ratios are ways of measuring the property’s ability to repay something.
Now the cool thing with these is they’re usually 30-year fixed rate loans, which you don’t get in commercial. So you kind of get the best of both worlds. You could buy a residential property and you get a 30-year fixed rate loans and you don’t have to use your debt to income ratio. The downside is the properties have the cashflow, otherwise you can’t use a debt service coverage ratio. As well as the rates are usually right around a point or so higher than conventional financing. So that’s one option. You mentioned a couple others, Rob, of what he said. What were your favorite options?

Rob:
Partnerships for sure. When I ran out of money, my passion didn’t run out, my money ran out. And so if you’re very viciously attacking this real estate thing, it is a very lonely road in general is my feeling. And so if you’re the kind of person that thinks you would thrive on a partnership, if you like working with someone else or with other people. If you feel like you’re kind of alone in this, I think partnerships can really unlock a lot for you because at the end of the day, based on what we’ve heard, you’ve done really cool stuff, you’ve got experience doing this and you have knowledge that other people want. So I think it’s very plausible to go out there and raise money from an investor and say, “Hey, you be a passive partner and I’ll go and be the sweat equity and the boots on the ground.”
Or find someone who does have the cash but no time, but willing to split some of the workload with you. And maybe you can bring a little bit of money, like 10,000, 20,000 bucks so you have skin in the game, partner up and buy a property. I think that’s a very, very… That’s what I did at the beginning of my career and I’m so thankful I did. I built a massive real estate portfolio with other people and they’re still all great partners to this day.

David:
All right, that’s sound advice. I’ve got two more options for you. The first would be to wait. Because even though your debt to income ratio is maxed out right now, as you wait, the money that comes in from those properties will show up on your taxes and you will be able to include it as income, which will improve your debt to income ratio. And the second is to check out Pillars of Wealth: How to Make, Save, and Invest Your Way To Financial Freedom because if you focus on saving more money, which will reduce your debt, and making more money, which will increase your income, you will naturally improve your debt to income ratio. So I’d love to see your desire to buy more real estate become the incentive or the carrot that you use to chase making more money in life as well as saving more money. So thank you, Danny for that question.
Moving on to our next question also from a Danny in Las Vegas. Danny says, “My question is whether you think this lease to own or lease option is a legitimate and solid strategy for real estate investing? Little bit of a background. I bought my first house, a five bed, four bath in a B class neighborhood in Las Vegas two years ago, and I’ve been house hacking it by renting out the extra rooms in the house to start my real estate investing journey. I would like to purchase my second property soon and I’ve been thinking I would like to keep my first for a few more years. This rent to own strategy seems like it could be a good option in my situation as I could get paid an option fee, and monthly rent without being responsible for maintenance and repairs. If the renter isn’t able to purchase the house by the end of the lease, then I figure out just put it on the market.”
“Some of the pros, it looks like it would reduce the amount of time that I have to spend managing the house and the money I have to spend on maintenance and repairs while collecting extra cashflow in the form of the option payment and monthly rent. I think the option fee plus the rent would be higher than renting the entire house out. But saving on a real estate agent commissions of up to 6% if the renter ends up buying the house is nice too.” Cons.

Rob:
Lower than renting out all the rooms and potentially paying up to 6% to sell if the deal falls through.

David:
All right, so the lease option road, not talked about as as it was in the past, but it’s still around, what do you think?

Rob:
This is not my area of expertise, but Joe and Jenn Delle Fave, we had them on the show not too long ago and they do a lot of lease to own, and honestly it is one of those things that I really like because you do get a big option fee or a down payment fee, if you will. And it basically… Like he said, it gets you out of the maintenance doghouse and then at the end of it, let’s say in 12 or 24 months they decide to walk away, you get to keep that option fee or that down payment or whatever it is and then you can still go and resell it.
And so at the end of the day, you’re not totally down even if someone walks away, although that’s not the ideal scenario. So I haven’t done it myself, I’m super interested in doing it. I would definitely just consult you to go and talk to people that have done it. Go listen to that episode with Joe and Jenn Delle Fave. They kind of break down that process a little bit in how they approach it. I think it’s a perfectly viable path, but it’ll probably be some paperwork for you that you’re not used to on the first go. So just make sure you do a little bit of research.

David:
By the way, episode 794 is what you want to catch if you want to hear about Joe and Jenn Delle Fave. And keep in mind this can work against you in certain scenarios. If the market for some reason explodes and the house becomes worth a lot more money, you’re going to end up selling it to them for less than what you could sell it on the open market. So I think the reason lease options have become less popular as of late is because values of real estate have gone up so much, it hasn’t made as much sense to give up on the potential upside to secure a little bit of the safety of not having the maintenance and the extra expenses.
So yeah, if you’re going to take that option, not a bad option at all, just know you may lose some money if the market goes up. And if the market doesn’t go up and actually goes down, well then your tenant’s probably not going to buy the house, they’re not going to exercise their options, so you’re still going to be left with it. Although hopefully you got an option fee that makes it worth your while. Just know that even though we’re explaining it very simply, it’s not always as simple in execution.

Rob:
That’s what I was going to say. I was going to say, if you do this, I would not cash in your option fee and spend that money as if it’s yours. Because if your tenant decides to walk away and not exercise the option, as David is talking about, there could very easily be some deferred maintenance that built up over the last year or two, and you just want to make sure to have some reserves to address those things if there were some pretty serious deferred maintenance issues that popped up throughout the couple years.

David:
Great point, just because you’re not responsible for the maintenance doesn’t mean it’s actually getting done.

Rob:
Yeah, totally.

David:
We’ve all seen what some people live like and not everyone’s going to be fixing things that go wrong. Solid point there, rob. I’m glad I brought you along for this one.

Rob:
Thank you very much, I appreciate you.

David:
All right, moving on to our next question. This one comes from Tomey Odukoya.

Tomey:
Hey David, this is Tomey from San Antonio, Texas. Following up from episode 777, we’re about to close on the duplex we talked about. New construction’s taking a little while. I was able to negotiate with my lender a two one rate buydown, thanks to watching BiggerPockets, love you guys. My question is, during the first two years when my interest rate is going to be 2% lower and then 1% lower subsequent, do you feel like it’s a good idea to make extra payments as much as possible during those first two years? Just so I can try to better position myself for that next mortgage coming up. Appreciate any insights, and as always, keep dropping the gems. Thanks guys.

Rob:
It’s a pretty good question. So basically, should he try to get ahead of his higher interest rate by paying the mortgage down? My initial gut is, I like the idea. But paying more extra payments, unless he’s paying a lot, I feel like we’ll have a pretty minimal effect on the interest that he’s paying. But I guess it kind of depends on how much he’s thinking about doing. I don’t know, what do you think? That’s a tough one. It’s hard to say without knowing how much he’s planning on putting down.

David:
Well, he doesn’t have to make extra payments towards the principal. He could save the money and then make one lump sum towards the principal later. Most of the time, lenders will let you recast your loan if you make a significant down payment. So maybe instead of just putting it towards the mortgage every month, Tomey, yeah, put it aside. And then if the rate does go up and it hurts, you could just say, “Well, I’ve saved 30 or $40,000, I’m going to put that all towards the principal and have them recast the loan,” so it comes down a little bit. If they don’t let you do that and your only option is to pay the principal down, I don’t think that’s actually going to make the money that you pay every month less. You’re going to have the same principle and interest payment, it’s just a higher percentage of it is going towards the principle rather than the interest.
So it sounds like because you have a good relationship with your current lender, you should ask them if recasting the loan is a possibility, and if so, no need to pay the mortgage down right now. But if not, that would be something to look into. Good question, Tomey, let us know how that goes. All right, I hope you have enjoyed the show. Remember, if you want to be featured on Seeing Greene yourself, head over to biggerpockets.com/david where you can submit your question and hopefully we answer it on one of our shows. And again, thank you to Rob for being here with me today and helping shoulder the load of the good work of educating you find real estate investors.
In today’s show, we covered if you should use a lease option or not, when to pay down your mortgage versus when to save that cash, when your debt to income is the culprit to future financing. And if building student rentals makes more sense when you add two rooms, or keeping it to four. Please leave us a comment on YouTube and let us know what you thought of today’s show, as well as leaving us an honest review wherever you listen to your podcasts, like Spotify or Apple Podcasts. If you’ve got a second, check out another BiggerPockets episode. If you want to learn more about me, you can find out my information in the show notes. And if you’ve got a second, watch another BiggerPockets video. If not, we’ll see you next week.

 

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.





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