New house hacker in Newport News, VA

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New house hacker in Newport News, VA

Mike W.
Member since 2020 · 2 posts · 1 vote

Hello everybody,

after reading a lot in this forum, listening thorugh most of the BP podcasts and reading multiple books, it is about time to introduce myself.

My name is Michael, 30 years old and recently moved from Germany to Newport News, VA due to some job oppotunities. I've worked as a plumber/heating-/ gas-tech for many years overseas and I hope this will come in handy during my real estate journey.

I would consider myself quite frugal, but i always lived for rent, i still do. This needs to change, to me this is lost money. After i built up some credit, saved for a down payment and monitored the local marked for quite a while i want to take the next steps.

My plan is to find a 3 or 4 unit multi family property around the Newport News area which i can house hack and maybe add some equity to. Unfortunately, such bigger properties seem to be pretty rare around here.

I don't have a lot of connections yet, but found some local real estate groups. I intend to join some meetings in the furure if my job allows that. So if anybody knows a good lender around this area or just has some expereiences to share, i would appreciate that.

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William Sing
Real Estate Agent · Portland, OR · Member since 2020 · 278 posts · 136 votes
4y
Hey Mike,

Congrats on deciding on making the next steps in Real Estate!

I'm not around that area but thought these tips might be helpful. 
1) When searching for properties, you can look for on-market or off-market deals. I'd suggest finding a real estate agent who is well versed in investments if you go on-market. In my eyes, this gives you a lot more of an understanding of the process without as much liability for your first property. If you need someone to recommend let me know! If you are going for off-market deals, I'd look into driving for dollars or doing some mail campaign. When you look for off-market deals there is a lot more time involved. 
2) Using Redfin, make a broad search of multifamily properties that have sold in the past year or so. Multifamily homes sometimes are built in clusters. I had a builder in my area that sells of 1-2 multifamily units every year from their portfolio so it might be away. 
3) You can buy 3-4 units with FHA, but they have a 75% sustainability rule to be aware of (duplexes don't have this). The total rent needs to cover 75% of the PITI. This can sometimes limit your use of this loan if the values are appreciating quickly. 

When searching for a lender, make sure they understand investments. Here are some questions I would use when interviewing them. 

What does your team look like?
What systems do you have in place?
What are your expectations of a client?
How long is the seasoning period before you can borrow money against the property?
Tell me about your experience with investing?
How many deals have you done?
What are deals you have learned from?
Where would/do you invest in this market? Why?
How do you like to communicate? Frequency?
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  • William Sing
    Real Estate Agent · Portland, OR · Member since 2020 · 278 posts · 136 votes
    4y
    Hey Mike,

    Congrats on deciding on making the next steps in Real Estate!

    I'm not around that area but thought these tips might be helpful. 
    1) When searching for properties, you can look for on-market or off-market deals. I'd suggest finding a real estate agent who is well versed in investments if you go on-market. In my eyes, this gives you a lot more of an understanding of the process without as much liability for your first property. If you need someone to recommend let me know! If you are going for off-market deals, I'd look into driving for dollars or doing some mail campaign. When you look for off-market deals there is a lot more time involved. 
    2) Using Redfin, make a broad search of multifamily properties that have sold in the past year or so. Multifamily homes sometimes are built in clusters. I had a builder in my area that sells of 1-2 multifamily units every year from their portfolio so it might be away. 
    3) You can buy 3-4 units with FHA, but they have a 75% sustainability rule to be aware of (duplexes don't have this). The total rent needs to cover 75% of the PITI. This can sometimes limit your use of this loan if the values are appreciating quickly. 

    When searching for a lender, make sure they understand investments. Here are some questions I would use when interviewing them. 

    What does your team look like?
    What systems do you have in place?
    What are your expectations of a client?
    How long is the seasoning period before you can borrow money against the property?
    Tell me about your experience with investing?
    How many deals have you done?
    What are deals you have learned from?
    Where would/do you invest in this market? Why?
    How do you like to communicate? Frequency?
    1Reply
  • Chace Fraser
    Realtor · Portland, OR · Member since 2017 · 357 posts · 259 votes
    4y

    @Mike W. 

    Welcome to the BP community. Just by joining you are taking the first step to financial freedom. I think house hacking is a great way to get your feet wet in rental investing, especially if you can find a duplex or so and live in one half and rent out the other half.

    The two initial and essential members of your professional team will be a lender and a realtor. You need to make sure you find quality, experienced professionals. These two members of your team can make the process great or terrible. They can make a deal happen when it looks like it’s going to fall apart or they can kill a deal that is on track to close. These two team members will help you fill out your team by leveraging their professional networks (inspectors, lawyers, escrow officers, CPA’s, etc). It’s never really too early to start making these contacts.

    When it comes to Realtors, they will help you identify which areas of town are good to invest in and what to expect in rents, quality of tenants, how to analyze deals, provide you with investing opportunities (both on market and off market).

    In my experience working with house hackers, the majority of the questions center around financing the deal.

    When it comes to finding the right lender there are a few things you’ll want to keep in mind. Lenders, like realtors, are not all created equal. In order of importance, here’s what I think is important to look for in a lender. You want to make sure your lender:

    • Has worked with house hackers before; the rules change depending on what loan type you use and how many units you purchase. There are A LOT OF TRAPS along the way that can/will make the deal fall through (and cause you to lose your earnest money). You want to be sure the lender you choose has navigated them before.
    • Can help you strategize the lending piece for this purchase AND purchases in the future
    • Is an investor themselves

    BP is a great place to find people, both virtually and in real life, who are doing the type of investing you are looking to do. You can find local meetups in your area by going to Network>Events up in the menu bar. The best way to find an investment realtor or lender would be to search people on here who are lenders/agents and ask them to recommend one or two to you (I did this by sending them a private message). Another great way would be to post on the forums who you are and what you're looking for.

    I’ve found that people in the BP community are incredibly friendly and willing to help.

    Good luck!

    0Reply
  • Kathy Henley
    Rental Property Investor · St. Louis, MO · Member since 2014 · 741 posts · 424 votes
    4y

    @Mike W. Welcome Mike. Local banks like owner occupied multifamily investment properties. I qualified for a lower interest rate (.5%) because I live in my 4-family. Visit those near you and ask. If you are ready, get pre-qualified so that you know what price range you can search for.

    Practice your search by going to open houses and learning about your market. A duplex is a good starter property too. Evaluate each deal as if you were going to make an offer. This way, you will know a fair deal when you see one. In time, it will happen.

    0Reply
  • Julio GonzalezPro Member
    Specialist · West Palm Beach, FL · Member since 2008 · 4k+ posts · 1k+ votes
    4y

    Glad to have you as a part of this community! I'd recommend using the networking tools here on BiggerPockets.

    Welcome aboard and best of luck investing!






    561-253-6640
    0Reply
  • Justin WindhamPro Member
    Banker · Nationwide · Member since 2015 · 4k+ posts · 1k+ votes
    4y

    @Mike W.

    It’s nice to have you here!

    This is a great forum with very knowledgeable members that will help to guide you in the right direction.

    The site has quite a few tools that can be helpful for new members. For example, if you are looking to connect with other members near you, want to learn from people in a specific area you’d like to invest in, or have a desire to find people interested in certain topics, you could use the search feature here: https://www.biggerpockets.com/search/users


    I really like the alerts feature that can quickly guide you to current topics that may be of interest: http://www.biggerpockets.com/alerts

    0Reply
  • Kyle DeutschmannPro Member
    Investor · Washington, DC · Member since 2017 · 428 posts · 205 votes
    4y

    Hey Mike,

    I've house hacked a couple times myself and am also a licensed lender in VA. Would be happy to chat sometime about my experience house hacking and certainly could help answer questions about financing options as well.

    Either way best of luck on your investing journey! 

    [email protected]
    0Reply
  • Mike W.
    OP
    Member since 2020 · 2 posts · 1 vote
    4y


    Hello and thank you all for that warm welcome!

    The last days i was perrty busy, got in contact with some real estate agents and many banks and lenders. Unfortunately it seems that my credit history is not long enough yet and i will have to wait 2-3 months until i'm in the 'system'. I was told that i need to have full 6 months, with my credit card that i own since October that means i will have to wait until May to apply again.

    I tried other options, but most of them apply when you have bad credit instead of no credit at all.

    Maybe anybody has another option or way i can go?

    0Reply
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