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All Forum Posts by: Avery Heilbron

Avery Heilbron has started 20 posts and replied 301 times.

Post: How does a Lender know if you are living in your Househack?

Avery Heilbron
Posted
  • Realtor
  • Raleigh-Durham, NC
  • Posts 311
  • Votes 217

@James G. Definitely just live in the house. For my second owner occ multi in the same town I had the bank come by 3 months in to confirm I lived in the house. It wasn't a thorough confirmation, but a confirmation nonetheless. 

Post: Is it a bad time to buy a home now?

Avery Heilbron
Posted
  • Realtor
  • Raleigh-Durham, NC
  • Posts 311
  • Votes 217

@Bob Ross  It's always a good time to buy an investment property. If you buy correctly as long as you plan to hold (which you should) then it will be a good investment. If you want long term wealth then you should hold for a long time. Rents will increase and the value in Boston will increase. There is so much economic diversity and progress happening here that it is a sound investment.

Post: Start with Single Family or Multi-family?

Avery Heilbron
Posted
  • Realtor
  • Raleigh-Durham, NC
  • Posts 311
  • Votes 217

@Kyle Marsh Doing multiple househacks year over year was also what I thought my strategy to be. I am currently on my second one. The first I bought was a duplex and the second a 3 family. Some things I now know is:

1) To refinance out of the FHA for 2 units or less I only needed 95% LTV - obviously lender dependent

2) To refinance out of the FHA for 3-4 unit buildings you need 80% LTV - lender dependent

3) Underwriters don't like you moving from one property to another within the same town/area without a reason and building a real estate portfolio is not a good reason for them. They would want to know if you're moving closer to work, need more space because you're having children, need to move closer to your parents, etc. 

4) Moving all the time sucks

So I think you can do this 2-3 times maybe even 4, but by then you should probably be able to start doing more traditional investing. As for your question if you want to do more househacks more often it is easier to refinance and then re-use the FHA with less units, but 3-4 unit properties might get you better results. I'd personally rather have two 4 unit buildings that I purchased 2-3 years apart than four 2 unit buildings I purchased every 12-15 months.

Feel free to send me a PM if you want to hear more about my experience. Happy to chat!

Post: To get a partner or to not get a partner. That is my question

Avery Heilbron
Posted
  • Realtor
  • Raleigh-Durham, NC
  • Posts 311
  • Votes 217

@Jacob Lapp Partners are always great as long as your goals are aligned. As for multiple househacks that is pretty difficult with lending standards. I'm also on my second in the same town and the bank randomly came by my house 3 months in to confirm I lived there

Post: Investment Markets in Texas

Avery Heilbron
Posted
  • Realtor
  • Raleigh-Durham, NC
  • Posts 311
  • Votes 217

@Daniel Chappell Yes, you can use a portion of the potential rents for the unit you wouldn't be occupying. Your pre-approval increases as the units increase

Post: My First Rental Property 2 years later (Boston,MA)

Avery Heilbron
Posted
  • Realtor
  • Raleigh-Durham, NC
  • Posts 311
  • Votes 217

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $525,000
Cash invested: $50,000

My First Duplex househack in Everett, MA.

When I first bought the property it was pretty gross and full of mouse poop. I learned how to renovate and cleaned up the place. Check out my YouTube channel for more info!

What made you interested in investing in this type of deal?

Househacking was the easiest way to get into my specific market and a 2-4 small multi is the best way to execute this

How did you find this deal and how did you negotiate it?

I was able to get it quasi off market, as in the listing agent called me before putting it back on the market after the prior buyers financing fell through. Was able to purchase for less than the cash buyer whose financing fell through due to my pre-approval as well as a $7k closing credit negotiated after inspection. The seller was going through a 1031 exchange and had a time constraint on their hands.

How did you finance this deal?

3.5% FHA loan

How did you add value to the deal?

Cosmetic renovations, upgraded electrical, plumbing and later the roof
section 8 tenants
refinancing

What was the outcome?

Purchase price $525k including a $7k closing credit

while househacking numbers
Mortgage $3307
unit 1 2bed1bath - $1200 (roommate & gf paying rent)
unit 2 4bed1bath - $2400

Once moved out a year later
Refinanced Mortgage $2850
unit 1 2bed1bath - $1800
unit 2 4bed1bath - $2880

My agent told me last week (march 2021) that it's worth somewhere between $650k-$675k

Lessons learned? Challenges?

When buying a vacant property it is best to assume you will be paying 1-2 months of the mortgage if a rehab is involved (potentially longer depending on the scope of work).

Having the 4 bedroom delead (lead paint abatement) earlier would've made renting out the property easier as MA has very strict lead paint laws and 90% of applicants were families with children under 6

People do not take care of their properties

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

YES!! Both my agent and lender are awesome. Please PM me if you want their info.

Post: Inheriting tenants with pets in violation of lease + deposit Q's

Avery Heilbron
Posted
  • Realtor
  • Raleigh-Durham, NC
  • Posts 311
  • Votes 217

@David Cha It can depend on the insurance that you are getting and what the policy may allow. If it were me I'd try not to disturb them, let them keep the dog (especially since you have one coming), and let them continue paying under market rent rather than nothing. If you want to offer them cash for keys that is up to you. Some tenants might be in to the idea of you renovating while they are there or away for a week or two. That way it is ready for the next tenant. I rehabbed my tenants kitchen and bathroom this summer while he went on vacation for a week. I thought he would be leaving, he decided to stay so then I increased his rent - everyone was happy and I had no vacancy. Buying with inherited tenants well under market rent is a slow play and things do not happen over night so these kind of hiccups should be expected since you know all of this prior to closing. 

As for the security deposit please look at your areas laws. Where I am, in MA, they are heavily favored towards the tenant. I personally don't make a fuss over a security deposit unless there is some crazy damage. General wear and tear like nails or screws in the wall is to be expected.

Post: How do rookies actually get started

Avery Heilbron
Posted
  • Realtor
  • Raleigh-Durham, NC
  • Posts 311
  • Votes 217

@Austin Warford read some books and listen to some podcasts that are published or created by this very site. You have to do your own research!

Post: Appreciation in City? Or CF in the burbs

Avery Heilbron
Posted
  • Realtor
  • Raleigh-Durham, NC
  • Posts 311
  • Votes 217

@Brendon Kerrigan lol yes it does depend on your goals. That being said I have two very health cash flowing properties 2-4 miles from Boston. So it depends on your goals and your ability to find/make deals. That being said some multi prices seem high right now. Higher rates should help steady the prices

Post: House Hacking: When to renovate a unit? Occupied or Vacant

Avery Heilbron
Posted
  • Realtor
  • Raleigh-Durham, NC
  • Posts 311
  • Votes 217

Hi @Kevin Wu It is true for the years that you reside in the property you cannot deduct/depreciate those expenses. Once you move out the renovations you have done to "prepare you unit" for rent can be depreciated. There are only deductions for items while a unit is tenanted and those items under $2500, everything above is depreciated. I'm not a CPA, but my experience. Similarly if you fix the roof in a 4 family that you live in you can only capitalize 3/4 the cost. Once you move out you can add in that final 4th. 

Even if you couldn't do this not have tax deductions isn't a good enough reason to not renovate the unit. You will be building equity which is a much larger driver of your wealth.