All Forum Posts by: Alejandro B Yoon

I currently manage my mother's property that is using a rent by the room strategy. Last week the A/C in our unit fried from a power surge and required a new thermostat and tablet piece. After back and forth with the technician and 2 trips to the home, I finally have the guy fixing the A/C today on Friday. 7 days after it broke.

In the meantime, the tenants have been complaining daily and I have been telling them that the technician keeps postponing his date to fix since we needed to order a part. 

They say it got so bad they had to sleep in a hotel/out of the house for a night or two. Multiple tenants want me to either reimburse for the hotel stay or reduce their rent for the following month. What should I do?

Hi Marcellus, congrats on the journey and that you are looking to househack. I currently am househacking in Houston and only paying $175 dollars a month and utilities to live in my home.

In finding a property, you just have to analyze as many deals that fit your guidelines that come up on the MLS, drive to the area, and look at the numbers. I believe that is the only way to do it since you want certainty in the protection of your investment and capital.

A lender will look at your debt, income history and credit to evaluate if you are capable of making mortgage payments with the current interest rate. They will then give you a pre-approval letter to show to sellers to prove you are serious. Since you just graduated college; you should be able to show your transcripts and an offer letter and void the 2 years of previous income required to qualify for a loan. I recommend talking to a lender about your current situation, he/she will tell you exactly what you need.

I have heard negative things about an FHA 203k loan. Since improvements must be approved by the bank over time, it requires the contractor to sign a lot of paperwork while working jobs. It can be a massive headache for you and contractors since banks tend to move slow and contractors want to finish jobs fast. MeetKevin's first deal was with a 203k loan and he regrets using the loan product.

I personally used a conventional loan; since I don't have to worry about PMI forever and I can buy a fixer-upper home without needing an FHA inspection before closing. I then renovated with cash savings and my income from my W2 job, since I am not spending much money on rent.

Message me if you are in the area! Would love to talk to new/seasoned investors and exchange ideas. Definitely looking to possibly partner on deals as I work full time in Accounting.

Investment Info:

Single-family residence other investment.

Purchase price: $248,000
Cash invested: $22,000

Househack on a 4/2.5 SFH in Southwest Houston. First property to ever own, a hard fixer upper.

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

Saving money on rent and building wealth!

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

Scouring the MLS for over a month. I had an agent since I was busy working overtime during the tax busy season.

How did you finance this deal?

Conventional loan with 3% down. Used an offer letter mortgage since I had been in college full time for my bachelor's in accounting. I then used cash to renovate the home to be rent ready.

How did you add value to the deal?

Replaced flooring, repainted the entire house, installed new trim, new doors, and cleaned like a maniac.

I plan on resurfacing bathtubs and bathroom tile, fix garage doors, improve landscaping, and get a new backsplash/countertop for kitchen throughout the year before I house hack another home.

All the comparable in the area are selling for 40k+ over our purchase price, I will consider refinancing whenever the FED cuts rates.

What was the outcome?

All rooms are rented within a month of purchasing the property. I have a negative cashflow of $200 + utilities, but that is fine since I am occupying the property.

Lessons learned? Challenges?

Do not replace/rehinge new doors by yourself, quite possibly the most frustrating experience I have had.

Use a mask while painting large areas so you don't get high off the fumes.

The entire house had dried, chewed up gum throughout the floor and walls. Removing these were difficult and generally a steel wool scrubber would do the trick.

Hey all, I am about to finish college in Austin and accepted an offer to work in an Accounting firm in Houston in May (near West University place), I am already preapproved and now analyzing the market and plan on lowballing some sellers in a few weeks. For reference, I am a licensed agent and have managed my mothers rentals in Austin who rents by the room (I introduced her to RE investing when I got my license a few years ago). So I am very familiar with how to analyze a deal and what to look for.

I've been visiting Houston every week and looking at areas and analyzing rents by contacting apartment buildings and other rent by the room listings, and currently in-between Golfcrest/Bellfort/Reveille and Meadowbrook/Allendale; both seem like decent neighborhoods with lower crime and aren't over 20 minutes away from my job. I was able to find a few 5-6 bed houses listed at <280k that are rent ready but ideally need 5-15k of work. Also been doing some numbers and it seems like both properties would cashflow pretty well but I don't think I will see much of an appreciation in value of the home after fixing floors/walls/bathrooms.

I am curious as to what to expect with appreciation in Houston, the higher CPI reports are telling me that the FED will keep hiking rates and prices will continue to drop as purchasing power decreases, and either way I don't see much of a margin to be made with the ARV of comp properties. Is most wealth from Houstonians RE investors made from cashflow or appreciation? What strategy are you guys using in your RE journey?

I figured that since posting. The properties that sold for 700k were around 1100-1500 sq ft. Would either be unprofitable or barely break even. He is an older guy and originally told me he wanted to sell the vacant lot for 500,000 which is ridiculous and shows me he is kind of out of touch with the property's value. 

In the showing this Friday I'm just going to hope that the lot with the structure has somewhat decent bones since I think then it would be viable to sell to a renovator (renovations in the area are selling for 550ish). From my initial view when driving for dollars the foundation and outside brick structure seem to be in good shape, but there is clear wood rot along the fascia board and the roof looks rough. 

I appreciate your response Nick!

I'll update this thread whether I am able to get a contract.

I found a property off-market in the Montopolis area and am about to go to see it with the owner on Friday. The original owner passed at 97 a few years ago and now is handled by a son who is the executor of the will. The executor has 2 next-door similar lots; one with a 50's tear down with no foundation (has a 2-room extension built 30 years ago with foundation) and a vacant lot the same size with an old concrete driveway. 

They are asking for 405k each, which is just over some sold comparables for a teardown on a lot that size (I have access to MLS); they say they have turned down offers before and last received an offer of 350k less than 6 months ago that they didn't go through.

The highest I think is doable for us is 380k and selling the contract for maybe 385ish. This will be my first time so I am not necessarily looking for the highest margin. Newly built properties on that lot are selling for ~700k range so I think that would be an appropriate price for a flipper

I am unsure as to whether I should offer on the teardown or empty lot. As I want to be able to have a strong case to lower the asked price and incentivize a buyer. 

Any and all critique is welcome. I am a 20 y/o agent that works hourly for Redfin and am just trying to wholesale during the summer before my senior year of college. Thank you.