Closed my first house hacking deal in Los Angeles (LA) - Part 2

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Closed my first house hacking deal in Los Angeles (LA) - Part 2

Vinay C.
Realtor · Los Angeles, CA · Member since 2016 · 100 posts · 38 votes

Hello BiggerPockets family,

It's been couple of years since I wrote my first post (https://www.biggerpockets.com/forums/223/topics/575632-closed-my-first-house-hacking-deal-in-los-angeles-la-part-1?page=1#p4237043). I'll keep this short. 

6 months into my FHA loan, I refinanced it. The appraisal came out to be $790K. I got a first loan 80% 7/1 Conventional loan for 3.875% $632,000 and the second was a HELOC for $58,500.

So my current payment for P&I is $2987/month down from $3900 (P&I and mortgage insurance). I got rid of the monthly mortgage insurance of $586.71. 

The back house is rented for $2500. 

So all up my rent turned out to be $487 + $750 = $1237/month vs $2500/month that I was paying while the tenants paying my rent building my equity. 

I am also using the savings to pay my mortgage a little faster and have my HELOC as a buffer for expenses.

It has also showed me how fast you can build equity. All this has peaked my interest in Real estate and I want to help millennials like me on this path to financial step up. This led me to get my Real estate license in that pursuit. 

If you have questions on starting your real estate journey in LA, feel free to reach out to me. Here to help. 

Cheers


V

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Tuan Huynh
North Hills, CA · Member since 2017 · 28 posts · 10 votes
4y

@Vinay C.

Hello, I really enjoyed reading your story.  I am a little bit analytical myself and the number breakdown you provided was superb.  I am new to real estate investing myself.  I have purchased 2 homes in the Northridge area but they are both my primary residence.   I just started reading more books from Brandon Turner and David Greene and seriously considering investing out of state.  You made a really good move by house hacking your first primary residence.

I just got done with converting my garage into a ADU for rental. I will type this up, hopefully my story will be as compelling as yours, in the BP forum soon. For Californian, if you have a garage then you should definitely consider converting it into a rental ADU. The local government agency has made it so easy to get permits approved due to the shortage of housing.

I am hoping we could network and attend seminar and grow our business.  See you soon...

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  • Victor Ong
    Developer · Los Angeles, CA · Member since 2020 · 90 posts · 50 votes
    6y

    I see, where in the valley? The seller gave you a good deal on a $6k/m gross potential duplex while accepting your 3.5% down. I remember when I first started buying houses, my FHA offers were thrown out of the window.

    I was also surprised that you don't have to perform much value add to get rent to market rate. 

    I can see this is well played in the financial planning and execution, especially in a 6m turn around time. 

    It's a great strategy to reduce your cashoutflow on a primary. However, value-add will contribute to most of the appreciation in value. Will there be any chances to value add to the property and raise cashflow?

    0Reply
  • Vinay C.
    OP
    Realtor · Los Angeles, CA · Member since 2016 · 100 posts · 38 votes
    6y

    @Victor Ong yea it was a cash flow move. I had to clean out the back house and rent it. It was a good 2 weeks of work. The property is in North Hollywood. 

    It also appreciated well. Noho west opened up recently with a new Trader Joe’s which is a 3 min drive from my place and there’s a Whole Foods that’s opening up later in the year which is a 5 min drive. With this I believe the property value would climb up even more. I hope the covid situation doesn’t slow the property appreciation. 

    Getting a property with FHA loan was challenging. I had to put in over 50 offers before I got this one. This one I went over the asking price by a bit since the numbers made sense to me.

    1Reply
  • Twana RasoulBusiness Member
    Real Estate Agent · San Diego, CA · Member since 2017 · 1k+ posts · 1k+ votes
    6y

    Nice Job and Congrats!!

    Compass5122 Reviews
    WebsiteView Page
    0Reply
  • Victor Ong
    Developer · Los Angeles, CA · Member since 2020 · 90 posts · 50 votes
    6y

    @Vinay C.

    I admire your persistency and grits. When my FHA offers were rejected, I ditched that route and move forward with traditional 25% down.

    0Reply
  • Vinay C.
    OP
    Realtor · Los Angeles, CA · Member since 2016 · 100 posts · 38 votes
    6y
     @Victor Ong:

    I didn’t have the luxury of putting down 25%. So I had to hustle. Getting into a second property has been a challenge coz I now need to come up with 20-25%. However, I have learnt more over the years and there are other ways to skin a cat. So once I have my RE License, I am planning to team up with investors and buy an apartment building.  

    Please do share your experience as well investing in LA. I am always interested in hearing and learning more about how everyone got their start. LA has a very high barrier to enter the market. So it always makes for a good story and learning.

    cheers


    vinay

    0Reply
  • Vinay C.
    OP
    Realtor · Los Angeles, CA · Member since 2016 · 100 posts · 38 votes
    6y
    Originally posted by @Twana Rasoul:

    Nice Job and Congrats!!


    Thanks. I see you are a RE agent in SD. What agency are you with? And would be interested in hearing about your thoughts on the market as it stands. 

    0Reply
  • Tuan Huynh
    North Hills, CA · Member since 2017 · 28 posts · 10 votes
    4y

    @Vinay C.

    Hello, I really enjoyed reading your story.  I am a little bit analytical myself and the number breakdown you provided was superb.  I am new to real estate investing myself.  I have purchased 2 homes in the Northridge area but they are both my primary residence.   I just started reading more books from Brandon Turner and David Greene and seriously considering investing out of state.  You made a really good move by house hacking your first primary residence.

    I just got done with converting my garage into a ADU for rental. I will type this up, hopefully my story will be as compelling as yours, in the BP forum soon. For Californian, if you have a garage then you should definitely consider converting it into a rental ADU. The local government agency has made it so easy to get permits approved due to the shortage of housing.

    I am hoping we could network and attend seminar and grow our business.  See you soon...

    1Reply
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