All Forum Posts by: Cassidy Burns

Hey @Craig Bass welcome to BP, tons of very smart people. The best strategy in DC is using 3.5% FHA primary residence financing and buy a duplex. The legal Loan limit is $1,053,750 so you can have a purchase price up to $1,090,631 and purchase the house with $36,881 (will have to ask for a 3% seller credit to keep the cash to close here)

Good luck! 

Hey @Account Closed congrats on this! Now the key is having the discipline of not selling and holding it for long term!! 

Thank you sir @Chris Mills

Hey BP,

I wanted to share one of my clients and fellow BP member's success story on their first real estate transaction, utilizing primary residence financing and house hacking. 

Location: Mount Pleasant, Washington DC 

-Very desirable neighborhood and not many condos available for sale at any given point

Asset: 2 Bed/ 1 Bath Condo 800+ SQ FT.  Private Patio

Purchase Price: $455,850

Seller Credit: $13,850

Net Price: $442,000

THE BEST PART: Appraised Value: $520,000

He made $78,000 in equity the day he signed on the dotted line. $76,000!

He wanted to decrease his monthly payment so he put 10% Down and rolled paying off his college loans into the loan to meet the DTI criteria.

Interest Rate: 2.85%

Mortgage (PITI +HOA) = $2,473/month

Since he bought the house with so much equity , his PMI will fall off at 6 months and 1 day (banks seasoning period) , saving him another $135/month

So in 6 Months his monthly payment will be $2,338/month

Projected Rents : $2,650/month

He will live in this unit for 1-2 years and already has a roommate that is moving in July 1st with a lease of $1,100/month. He will be living in the unit for $1,373/month for the first 6 months and when the PMI falls off, he will be living for $1,238 in Washington DC........

So he bought an asset with around $52,000 down (10% down and college loan payoff),  has around $312 of gross cash flow once he moves out, AND will be living for less than $1,300/month all while building equity.  Oh yeah I forgot , he also made $78,000 on the purchase! 

This is how you buy value in Washington DC

Hey @Trey Prince , this really depends on the assets that are backing those mortgages.  If they are good cash flowing rentals in good locations, then yes of course, the more you buy , the better.  BUT, if they are properties that are struggling to stay occupied, cash flow is slim, in a location with not much growth potential, then maybe you should consider liquidating them. 

Good luck!

@Eric Salgado yes buy now, live in it while you are in the area and once you move overseas for the 2 years, turn it into a rental.  You can always move back in once you are state side. 

Hire a property manager while overseas and continue to build equity in the asset.  Just make sure you buy the RIGHT asset

Hi @Erina Sin a few things to consider:

-What are the rents of the unit?

-Does the condo association allow rentals in the building?

-Will that unit ever be worth more than $318k in that particular area?

My concern with a lot of DC buyers is that they are trying to "go cheap." Buying an asset just because its cheap in the city is a recipe for disaster in my opinion . If the answer to the above 3 questions are all Yes or positive, yes buy It, because 5 years is a long time to be paying someones mortgage . But the key is , the asset that you buy and are "paying your own mortgage" and building equity, make sure its a good one. And in most cases that I have seen buying in better locations, with more sure rents, and less vacancy is ALWAYS going to win over buying cheap.

Hope this helped!

Hi @Erina Sin a few things to consider: 

-What are the rents of the unit? 

-Does the condo association allow rentals in the building? 

-Will that unit ever be worth more than $318k in that particular area? 

My concern with a lot of DC buyers is that they are trying to "go cheap." Buying an asset just because its cheap in the city is a recipe for disaster in my opinion .  If the answer to the above 3 questions are all Yes or positive, yes buy It, because 5 years is a long time to be paying someones mortgage .  But the key is , the asset that you buy and are "paying your own mortgage" and building equity, make sure its a good one.  And in most cases that I have seen buying in better locations, with more sure rents, and less vacancy is ALWAYS going to win over buying cheap.

Hope this helped! 

@Eric Salgado I think you are in a great position.  The most valuable asset in the DC / DMV market is the ability to be flexible and move.  When you buy a primary residence it is not an asset until you start generating income off of it, if you are just living in the house it "technically" is a liability.  

So My advice: 

Buy a primary residence in DC using 3-3.5% primary residence financing.  House hack it .  Friend, brother, sister, or a person from Facebook, get someone in the other room of that 2 bedroom condo or the single family house and have them start paying down your mortgage and reducing your monthly expenses.  

Once you have to relocate, turn it into a long term rental and let time do its job.

You can do this strategy and purchase a 2-3 bedroom condo or single family (these assets are extremely competitive right now)  in DC with $12,000-$20,000 down.  

Just have to get creative to get into the game and this is the best strategy that I know of in the DMV Real estate market. Good luck!

@Russell Brazil is 100% correct.  The small multifamily space in Washington DC is extremely low in inventory, and more importantly quality inventory that drives the rents that are necessary to create acceptable returns.  I do believe they will be the most valuable asset in the district in the next 5-10 years in primetime locations.