All Forum Posts by: Brian DeLuca

This is an interesting question I have not thought of. Really no reason to do BRRR as the leverage is the best part of that. I would probably look at the highest cashflow I could get which would either be short term rentals in popular ares like Nashville or Joshua Tree or I would look to invest in turn-key rentals in the Midwest. If you have any interest in the Midwest, shoot me a message I have a couple ideas.

Hi @Account Closed

My encouragement is to invest in a short term rental in big bear. Happy to guide you through a performa of what you can make and support you on the short term rental management side. My website is: achalet.com 

Let me know if you have any questions around this space!

I recommend not investing in California, unless you really know what you are doing.  Rent control laws, especially in C-class areas..not good. There are tons of great markets across the country, really depends on what you're looking for. Some have higher cashfow, others have higher appreciation.  I invest in the Milwaukee market. Great cashflow and pretty stable.

Investing in a syndication as an LP might be good option as well..

If you're going to deploy 500K on your own, you have to become very knowledgeable in RE first.

@Account Closed - Where have you looked in CA? We do have inflated prices, but generally that also means we have inflated rents.  The rent/price ratio may not be as strong in some places in CA, but the appreciation can help offset that amount.  That being said, there are places in CA that do still offer cash flow and decent prices.  For example, here in Bakersfield.  There are still decent returns, while the area is growing at a pretty good clip.  For example, our transportation and logistics sector has exploded over the past 5 years or so and that has really brought a lot of jobs and growth to the area as well.  Feel free to PM me if you would like as well.  

I was going to recommend stocks/bonds/reits as well. 
Easy to get dividends alone of 7%-11% in utility or communication stocks or reits today.  
Risk and effort adjusted, publicly traded paper equities are multiples less risky and less hassle than buying some out of area RE at retail with little knowledge or experience.  

Treasuries and other bonds are not in this list.

With a 9 month horizon a rolling 3-month Treasury ladder would work well.  Buy 33% of your stake each month in 3-month Treasuries, roll into new Treasuries each month when they mature.  You can always sell at anytime to get your principle back, and the downside is very limited in a rising rate environment due to the short duration of the bond, and 1/3 of your money becomes available with 0 downside risk every month.

Thank you all for your very helpful responses. A lot to consider. Just to clarify, this home was a 5% down conventional and the loan does require a year as primary residence. As I do understand it, I will be able to get a second loan at 5% down even though I wont be a first time homebuyer, as long as I pay mortgage insurance. Unless anyone has any clarifications.

My last loan officer was not well versed in the concept of "house hacking", so Ill be searching for one in my area that knows the ins and outs of the concept to help me move forward with the appropriate financing. I suppose I need to crunch numbers and decide if a HELOC or a refinancing would be a better option to reacquire some of my initial capitol.

Hi Thomas! Congrats on the first house hack! As I'm sure you're familiar - after you spend 1 year in your current duplex you become eligible again for primary residence financing (5% down). I think Steve recommended a very fair strategy of living on a budget but I personally do not want to ever live frugally, In my opinion it's just not worth it. (If possible) I would recommend finding ways to make more money by starting up some sort of side hustle or service in order to stack extra cash for your next down payment. 

I'm not sure what your buying strategy was for your first duplex but if you completed some home-reno and added some equity then you can also utilize a home equity line (HELOC) against the first duplex for your next down payment (it would just be counted in your DTI when qualifying). This way you can start building the equity in your next property and utilize that 5% down loan again as quickly as possible.