All Forum Posts by: Chris John

@Michael Everett

Sorry, but I'm not sure of the answer to your question, but I would be VERY surprised (assuming you qualify) if you couldn't purchase this as your primary residence with a low down payment FHA loan of some type and still be able to travel. I would strongly encourage you to reach out to a few local lenders (I actually have a lender that I love that I can get you in contact with if you private message me if you would like) to get prequalified so you know exactly what situation you are in.

It sounds like you're living the life, so keep it up!  haha.

Best wishes

@Waleed Hamdan

I know that house hacking and California appreciation are all the rage, but I'd urge you to consider your options on this.  You're getting a ridiculous deal on your rent imo.  It sounds like your unit has 43% of the rental value ($3800/$8800).  If you apply that to the $2.5M property it comes out to about $1.075M.  A mortgage for that much (even with $300k down) would be well over $6K I'm guessing with taxes and insurance. 

I'd encourage you to keep renting where you're at and buy elsewhere.  $300k down on a $1M property could get you the $8-9K rent that you'd get from this property and leave you only financing $700K instead of $2.1M.  If you do decide to pursue this building I'd be very careful as it sounds like a lot of leverage ($300k/$2.5M = 12%)

Obviously, you know your situation the best, but it's possible to rent where you live and have the benefits of ownership elsewhere.

Best wishes with whatever you decide!

And, for those interested in timeshares, but don't want all of the hassles and expenses, redweek.com has a listing of bookings that people have made that they are willing to rent out.  Honestly, many of them look much cheaper than a vrbo. 

As our children get older and quit joining us at the timeshare, I would definitely consider selling it and just renting weeks on redweek where and when it makes sense.

I'll be the contrarian.  I bought it "used" for $2500 and it came with 2 years of points.  It's a "points" system where you have to competitively log in at exactly midnight 13 months in advance to the day to get the "good/popular" resorts, which is kind of a pain, but we're both teachers and are very flexible during the summer. 

So, we're getting a 2br/2ba for a week in Marina Dunes for around 1k a year.  Plus, we've been able to book some of the other units for cash (very cheap) on days when they're not in use.

In the end, we couldn't hope to get something similar for this cheap in the area and we can definitely book Marina Dunes and then rent the week out for a tidy profit.  Also, we could rent points for around $700 from other members, book Marina Dunes, and make an even larger profit, but I haven't bothered with any of that yet as it seems like too much busywork.  I really should make my children do it for me and split the profits with them though...

Anyway, if you can 1) buy used; 2) get good at booking the tough to get resorts; 3) have a flexible vacation schedule in case it takes you 2 or 3 tries to get your reservation; and 4) have a place you want to go to for a week every year, then I think it could work for you. 

If any of those 4 don't apply to you, I'd definitely skip though.  I feel bad for anyone that buys from the resort though as they're paying over the odds.

@John B.

Can I ask what kind of loans you're getting with 15% down? I'm shocked to see such a low LTV. Thanks

@Sateesh Kumar

Two things to consider about your plan if you're not already:

1.  AB1482 (Rent control for 2+ unit residences)

2.  The differences in loans between a 1-4 unit residence and 5+

Be careful not to buy an asset that will lock you into low rents and accelerating mortgage payments upon each reset.

I was considering 5+ units in California (not the Bay Area though), but decided to buy 4plexes in Florida instead because of those 2 reasons.

Good luck!

@Justin Thind

You talk about a mortgage payment, but do you have a lender that will lend on such a low amount?  My guess is that this would be cash only or you'd be borrowing against a different property to finance this.

Please don't convince anyone else to move to the valley.  I can't get anywhere anymore because there's getting to be so much traffic!  haha.

@Myeasha Jones

In all seriousness, this thread hits close to home and gives me anxiety!  haha.  I've lived in the valley since junior high and got a finance degree almost 30 years ago (blech).  When I looked around for a job, the City seemed the obvious choice, but I couldn't bring myself to live in the city or to try the commuter lifestyle, so I didn't even look.  I ended up with a non-finance, valley job and supplemented my smaller income with real estate.  In the end, I'm happy with my decision, but I've always wondered what would've happened if I'd have given it a go and pursued my education.  Tough choice, for sure.  You definitely have my empathy having to make it! 

Regardless of what you choose, may God bless your path!

@Corey Duran

I'd be more concerned with getting a good deal over buying a specific type of property.  Besides the obvious of property location, affordability, condition, etc. I'd focus on:

(Monthly Income - Monthly Expenses) / Investment $

I know it's all pro forma and percents, but I like to have a general idea of how much return I can expect on each dollar I put into an investment.  Then, compare it to other options to select my best option.  For instance, I might calculate the money you are going to save on rent as part of the monthly income to help with the comparison.

Finally, I'd consider how you think the economy, interest rates, and real estate prices will change in the future.  For instance, I wouldn't buy an office property in San Francisco right now because I'm not sure that it would still be a good deal in a few years with what's going on there...

Good luck!