All Forum Posts by: Chris Miller

@Adam M.

Hi curious how this turned out for you? I’m thinking about doing similar

@AJ Wong

I feel what your discounting though is the downturn that will insue after the pausing of rates and before lowering them. They will have to lower them at some point but they will do so because the economy tanks and they’re are serious problems. Unemployment will be higher and that’ll be a better general time to buy in my opinion. Of course if a deal makes sense now then great.

@Stephen Jones

Hey Stephen. Sounds outstanding. I’m in very similar position as u. Ten years in. Little over 2 mill in equity. I have cashed out etc but as far as your scenario goes, I’m sure you’ve already thought of this, but Helocs are a decent option to at least get the million or so you need. Go to local credit unions that are investor friendly. I understand the rates are high but if the 100 unit will cash flow solid then who cares. 100 unit for 5 mill sounds pretty solid. Good luck!

@Armando Carrera

Hi how much do the manufactured homes run for? Cost per square foot? Thx

@Mike Hern

Totally agree with this post. Guarantee u can find a competent realtor to list for 1% and offer selling agent 2 or 2.5%. Why pay 5 or 6 %? Once it hits the MLS everyone sees it online.

@JD Altobello

Hi. Curious what the numbers look like. What’s your client looking to get price wise? And what do some of the rental numbers look like thx

@Brandon Hobbs hi Brandon! I’d luv to chat about Rv parks. I’m considering buying land to build one. Let me know thx!

@Joseph White hi! I’m curious how the build went and how the cash flow is? I’m considering building one too. Any info helps thx!

Quote from @Dan H.:

Quote from @Chris Miller:

@Jeffrey Zhang. I think with this choice I'd buy the triplex. With that said, down the road you could get a heloc to build the ADU to increase the property cash flow. By getting the heloc you essentially build it without real cash out of your pocket. After the build go for increased heloc if possible. I can't help but kinda luv the idea of ADU's on multi unit properties but of course there's opportunity cost by choosing to build ADU's. Personally, I'm building 3 ADU's in Santa Monica because rents are high and it's worth it in my opinion. Also, the construction cost was built into the loan when I bought the property.

Using a HELOC to add an ADU or purchase a property is an unleveraged investment. The easy ability to use leverage on RE investments is one of the primary reasons RE can be such a great wealth builder. If you do not use leverage on your RE investment, there are many investments that are likely to produce better returns and require less effort (be more passive).

As an example the lifetime return of S&P 500 is almost 10%.  This exceeds the average return on unleveraged residential RE and is much more passive.  

Similar, I can invest in an RE syndication and in recent times achieve ~20% return (may be challenging going forward in part due to the recent rate hikes).  Syndications are significantly more passive than owning residential RE.  

In summary, if not using leverage on your RE investments, you should evaluate in the RE investment is the best use of investment dollars.

How is buying an investment property with a heloc not a leveraged purchase?   Also, as far as using heloc to add ADU’s , Ive personally liked the idea to increase current cash flow but also definitely have the goal to increase heloc size after completion as well.   Soo basically kinda doin a brrr in a way as far as recouping some of the funds spent.   But it really is bit of a hassle with time taken for city approval and then tenants getting pissed when construction is going.  

@Jeffrey Zhang. I think with this choice I'd buy the triplex. With that said, down the road you could get a heloc to build the ADU to increase the property cash flow. By getting the heloc you essentially build it without real cash out of your pocket. After the build go for increased heloc if possible. I can't help but kinda luv the idea of ADU's on multi unit properties but of course there's opportunity cost by choosing to build ADU's. Personally, I'm building 3 ADU's in Santa Monica because rents are high and it's worth it in my opinion. Also, the construction cost was built into the loan when I bought the property.