All Forum Posts by: Brian Adzadi

@Jolene P. Neal

From one Brooklynite to another, sweety, its time to jump ship and look somewhere else. NYC is saturated with investors, you are competing with hedge funds, super-rich foreign investors and business tycoons doing deals in your own backyard. What chance do you think you have at succeeding at such Ultra-competitive market? I sound really pessimistic right now, I know but truly that is what you are facing right now.

Like our colleagues are saying, you can always try New Jersey, close enough to the city and seeing growth.
I, however, am not a fan of NJ. I love cash flow and NJ property taxes are too high in my opinion to see significant amount of cash flow. NJ is also tenant friendly like NYC, so yea, good luck with that.

However, my hometown of Allentown-Bethlehem-Easton PA to me is a great place to invest. You can get a multi-unit property for 100K or less. The property taxes max out around 5K in the best rated school districts. You can easily cash flow from $200 or more.  The area is only an 1 hour and 40 minutes from NYC. Many businesses are being set up there, they have great health care system and showing continued job growth. Yes its a shameless plug but just trying to open your eyes to new possibilities.

@Sarah Kartsher

I absolutely agree with you on that one. I personally have been eyeing Toledo, Cleveland, Cincinnati and Columbus as potential investment property markets. Unlike you however, I will not be house hacking. The purchase price for some of the properties there are so down right cheap. Since you are from that area, you should know which neighborhoods are safe and in demand.

Right now, the Midwest is the next potential real estate boom. Just follow @Engelo Rumora and @Natali Morris on what they have been doing and seeing in that market place. Unfortunately its not as sunny as Phoenix but it sure is affordable and the cash flows are insane.

Wish you all the best on your journey.

@Jairhad Hemmons

I am not an expert at this matter, but based off the basic knowledge I attained from being on Biggerpockets, here is the situation:

I don't think you can use the house as a down payment to pay for another property, you will still need to have actual cash to use as a down payment, especially with the stringent policies on investment properties set up by Fannie Mae and Freddie Mac. You can use it as collateral if you default on the property, but that's about it.

If I were you, I would use some of my on hand cash to do rehabs that would increase the value of the house: increase curb appeal, add bathroom, make it open concept, whatever that is affordable but adds great value. Then, put on it on the market.

Instead of pocketing whatever profit I make from the sale, I do a 1031 exchange

(Remember if you don't do a 1031 exchange, you will be paying capital gains tax on the profit you make on the sale). So I will buy another house within 2 months of closing on the sale of the previous house. The new house I acquire, has to be of greater value or purchase price than that of the previous (Only way a 1031 will work). 

I now have capital to house hack with an FHA loan. Meaning I buy a Multi-family which has a greater purchase price, I live in one unit and I rent out the other.

So you pretty much just invested in a property without using too much capital.

I hope others chime to say if this method works or have better ideas.   

@Helen Zhang

Actually it has been discussed numerous times here on BP. Even @Brandon Hall has talked it about it a few times in his blogs.

The issue is, congress is slow and there will be a lot of pushing of the bill back and forth with the house and senate before it gets passed. There are groups out there who are lobbying on our behalf such as the National Association of Realtors to stop the bill from being passed.

At the end of the day it all depends who has the most influence.

@Justin D.

Just clarify a few things for us Justin

1) Are you going to use this house as your primary residence

2) Is it a multi-plex that you want to house hack

3) Do you plan on staying at this house for a significant amount of time?

I ask this because based on your stats, you are perfectly good with getting a conventional loan if its going to be your primary residence and want to avoid PMI.

If you want to house hack through FHA then PMI doesn't really matter because

1) Your tenant is covering a good percent of your mortgage

2) Its tax deductible.

@Meagan Gauthier

It depends on the laws in Georgia and if the house is paid off or still mortgaged.

Why I say that? If your house is still mortgaged, it was originally mortgaged as owner occupied, not an investment property. So if you decide to rent it, you need to tell your mortgage company that its being turned into a rental property so they can do the necessary paperwork to list it as an investment property.

The implications for turning it into a rental is now the interest will change, likely for higher. However, now you (depends on how this Trump tax bill works out in 2019) can write off many things that deal with the rental property: depreciation, interest rate, fix and repairs, utility, traveling to rental unit.

If you sell it and gained significant profit from the sale, you will have to pay capital gains tax. Unless you do a 1031 exchange and buy a property of equal or greater value within 2 months of closing on the sale of the primary residence.

So in essence the least amount of taxes is the turning into a rental.

Most taxes is selling without doing a 1031 exchange.

I know what you are talking about. I had experienced that with my primary residence. I am sure there are some houses that appraise for higher than the purchase price still.

I don't know what your plan is, to buy and hold or fix and flip. Your way around it if it is fix and flip is to just do work that will increase the appraisal: improve curb appeal, enhance the kitchen or bath, or turn it into an open concept.

If its just for buy and hold, I will do small work that will attract tenants and leave it at that.

@Tieba Bropleh

My friend, Biggerpockets is all you need. You don't have to pay anyone money upfront when you are here. There is a wealth of free knowledge here, why go and pay someone anything. Just do your read blogs, listen to the podcasts and interact in the forums, after that you are golden. Don't waste your money, pleaaaaasseee don't.

@Ana Garrido

I am not REA or RE lawyer but,

I think you should still qualify as a first-time homebuyer because

1) The properties you will buy will be under the category of investment property according to the mortgage company, it won't be listed as owner-occupied

2) Its under an LLC, so the company owns the property not you.

3) You won't holding on to the property for too long to be considered a primary residence.

However, you should contact a local REA or expert to confirm what I just said.

That does sound suspicious. Its a lot days or dirty clothes. I would first check to see if the coin collector device on the machines have been tampered with and if that's not the case, just kindly ask the tenants if either there is new lower price Laundromat that might have opened up or are they no longer satisfied with using your machines.