Financial Advisor · Sacramento, CA · Member since 2018 · 5 posts · 1 vote
Hey BP family!
Allow me to introduce myself. My name is Nathan Story, I’m currently working with my partner on educating ourselves and learning as much as we can before we decide to progress with our investments. For all of you out there, what have been some major driving factors that led you to feel comfortable enough to move onto a deal when you first started? I would love to hear everyone’s knowledge about multi-family investing as well! Or doing a lease option for a first purchase? Any insight would be much appreciated!
Welcome aboard! Glad to have you here! Have you set up your keywords alerts? Keywords help you keep up with topics that are important to you. Set up your keyword alerts here. A great keyword is your local investing area.
Welcome aboard! Glad to have you here! Have you set up your keywords alerts? Keywords help you keep up with topics that are important to you. Set up your keyword alerts here. A great keyword is your local investing area.
Financial Advisor · Sacramento, CA · Member since 2018 · 5 posts · 1 vote
8y
To add a bit of background I’m currently located in Sacramento, CA. I have no background in real estate at all but it has always interested me and I am now pulling the trigger on getting started. I currently work as a relationship banker at Bank of America, so I have some knowledge on financing and proper structuring of a business when I get to that point. I’m currently trying to find a duplex around my area that I can “househack” and dip my toes in the water of real estate. If anyone has any insight or tips on how to get the ball moving, I’d appreciate it very much! Also, I am prior military and wasn’t sure if I could do a va loan for a duplex to do the “househack” method as well?
lots of new investors spend time learning the "Strategies" while that is fun and exciting what gives you the confidence to move forward is truly understanding how to evaluate deals and knowing what they are worth in your marketplace.
There are blogs, forum posts and tools here to help you evaluate deals. To learn your market go out and look at LOTS of properties.
Real Estate Agent · Sacramento, CA · Member since 2015 · 394 posts · 259 votes
8y
hey Nathan welcome to BP!! I too am from Sacramento and am always looking for partners experienced or not to bounce ideas off of, evaluate properties, and possibly even partner on a deal. to your point about the VA loan, YES the VA loan can be used for a multi family property up to a QUADPLEX (4 units). While the low down payment costs are what entices many veterans to jump on that loan , it will significantly increase your PITI and ultimately thats more money you would have to pay interest on, even 1% down can prevent thousands of dollars in interest over the life of the loan.
Best of luck and feel free to reach out for anything I can help with!
I'm highly experienced in small multifamily (2-4) units in Sacramento and here would be my advice.
First, talk to a lender. You need to find out how much of a loan you'll qualify for, what your down payment will be, and your interest rate (approx.) That will help you determine the numbers part of the deal when it comes to expenses.
Second, when house-hacking a duplex, the goal isn't cashflow or living there for free, it's reducing your monthly obligation to the mortgage. By renting out the other side, you'll have far less to pay towards the mortgage every month.
This allows you to control a more expensive asset for less than it would otherwise.
For example, buying a single family home for $350k with a 10% down payment and a 5% interest rate would give you a PITI of roughly $2,321/mo.
If you bought a duplex with the same terms and rented out the other side for $1,000 month you'd be able to control a $350k property for only $1,321 per month, not $2,321.
Ultimately when you move out, you'll be able to rent the side you lived in and the property should at least pay for itself if not make you a little money every month.
Does that all make sense?
Once you've got the financing lined up, your agent should be able to help you determine the perfect area to find a duplex, analyze rents, crime, etc.
But beware, if your agent mostly deals in single family homes and has never worked with investment property like this before they may lead you astray as it'll be the blind leading the blind.
Feel free to reach out if you have any more questions about the Sacramento market or investing in general and we'll try to get you pointed in the right direction :-)
Financial Advisor · Sacramento, CA · Member since 2018 · 5 posts · 1 vote
8y
@Wes Blackwell Thank you so much! For some reason BP didn't notify me that you responded.... I would love to pick your brain about the Sacramento market and how I can go about making it work in my favor!
