Raising Capital for multi family

[Dennis Morris]

Trying to do a house hack in my market which is Florida I want to use a FHA for a 2-4 unit but the inventory is very low and purchase price very high but there are plenty single family. Would it be wise to get a single family under market value with enough equity put a heloc on it and use the cash from that to do a BRRRR on a run down multi family then pull the money out with refinancing? Seeking advices from the wise owls on BP. Thanks

[Kerry Baird]

I buy single family houses and getting them at a discount is a great plan, always.  We also get capital gains tax benefits for remodeling our own residences and holding for two years.  You could do that, move to another primary residence in 2 years, and have a nice tax-free lump of cash.  Buy another fixer as a primary with a portion of that money, and a similar rental.  I like probate houses for a bunch of reasons, but they usually have the right things wrong with them, such as old smelly carpet, but good structural condition. I can improve landscaping, put in new flooring, paint and so forth using Home Depot and get it done over time.  Look at the houses in my bio.

Food for thought, the 5 unit and up space is difficult to get funding for.  I suggest you look up the 5 units in your area on the tax assessors/recorder's site, handwrite and mail those owners and ask to buy with seller financing.  I would offer 5% interest only payments with a small down payment.  See where that goes.