All Forum Posts by: Corey Hawkinson

@Jordan J. Osborne If you can house hack with 0% down I would highly recommend doing that. You have to live somewhere anyways so there’s no real opportunity cost that you’re missing. The more units/cash flow that you can achieve at 0% down the better.

However, after that I would recommend focusing on paying off the credit card debt. You say those are low rates, and I guess they are compared to other credit card rates, but that’s a lot of interest that doesn’t help you at all. You’re basically throwing that money away every month.

@David Nacco If I was filling out a bank’s personal financial statement I would include those items (just a car for me, no jewelry). If I’m calculating my net worth in terms of when I can retire or in relation to my goals I don’t really care about those items.

@Derek Levi 100% agree with Bill. They won’t fix issues the way you would want and they’ll still charge you. For example, I bought a house that included a 1 year home warranty. The furnace went out 3 months into ownership. Which seemed like a good thing because I would get a free furnace... except that it wasn’t free. They still charged for labor, permits, travel, and whatever other fee they could think to include. And they installed the lowest grade furnace they could find. No energy efficiency and the filter doesn’t even fit properly. I’ve seriously considered replacing that furnace even though it runs fine and is only 2 years old.

@Benjamin Greene I would suggest sitting down with the loan officer and trying to focus on what options you have to get the deal closed. As someone else mentioned, ask if including you on the loan would get this approved. They already have your information so that should be easy to tell. Ask how far you are away from an approval, because there might be other options including paying a little more down on the purchase. (This option would only work if you’re very close because a few thousand amortized over 20-30 years barely decreases the loan payment.)

I’m not opposed to going to the boss, but I would go back to the loan officer first.

@Spencer Hartz If you ever want to have a further discussion with a local banker feel free to reach out. What the others have said here is true, although I would add that even with a commercial loan you would still guarantee the loan so your personal information does matter. It sounds like you have sufficient income outside of the potential property so that’s a good sign for you. Some people here might find commercial loans without personal guarantees but they are most likely either putting a higher percentage down on the initial payment or they are very established.

I’m not pushing you to go with me or my bank. I’m just willing to offer any insight I can as a banker who is also an investor. (Though personally the largest property I own is 4 units) In fact, I think anyone considering expansion should have discussions with multiple banks / credit unions.

@Bryan Clement I’ll take the bait...

2019 was a successful year for me as I accomplished 2 of my main 3 goals. I purchased a 4 unit property which expanded my portfolio. I (we) are expecting our first child in January. So the two main goals for 2019 (not in that order) were accomplished. The goal of losing weight was a failure however. I guess technically I did lose 10 pounds, but then I found those pounds again.

As for 2020, this is tough to put down exact goals. With a baby due in January my focus is on my family first, and investing second. My first goal is to stabilize the 4 unit property that I just purchased. At some point I would love to complete another 1031 exchange by selling a condo and purchasing a second 4 unit property. However, due to the market (not interested in out of state at this point, maybe that will change) I am hesitant to complete that goal in 2020. That condo provides solid cash flow which makes me lean towards keeping it for now while I spend my time with my family. That goal might change, but like I said, I’m hesitant to say that I need that to happen in 2020.

@Jarod Dudley If I have to pick 1 of those, I would say pricing. But being 1/8 lower than the others doesn’t matter if the terms are all wrong or the communication is poor, etc.

Personally, I think you're in a great place to invest in Hutch. I'm a little biased as I have family from that area. I believe your area has affordable properties with solid rent and I like 87% of the people I meet from Hutch. I would go with the HELOC over hard money lenders. You should get far better terms on the HELOC. You can use that money towards a down payment.

Please know I’m half joking with this, but the point remains serious... To start the Gray Duck rant we must establish 2 facts:

1. Duck duck grey duck is better than duck duck goose. In the goose version there are only 2 options. You can say duck or goose. Very boring. In the grey duck version you are open to loads of possibilities. Green duck, great duck, grand duck, etc are all options to confuse the people in the circle. 
2. The game originated in Sweden as a game called Anka Anka Gra Anka. If I tell you that Anka means duck, could you guess what that translates to mean in English? Yes, that translates to duck duck grey duck. 
Basically, this means that us crazy Minnesotans with the weird accents are correct and playing a better game, don’t cha know. But 49 states will continue to play an inferior and incorrect game. 
Now, all of this is just silly nonsense on the surface. I honestly don’t care what game a person plays as a child. But I have this at my desk (and t-shirt) as a reminder to keep an open mind. 98% of people can be wrong. More importantly, its a way of questioning. Is there a better way? Do we do something one way just because that’s always been the answer? 

@Jonathan Lyford With more information the BP community could walk you through option 3. Let’s use my personal situation as an example. I had $130k in my 401k. My plan allows me to take a loan of up to 50% of the value or $50k, whichever is lower. Obviously in my case the $50k was lower. I just took a loan against this 401k as part of a 4-unit purchase. There are no penalties for this loan as long as I make all the payments, though there are risks. The main risk is that if I were to be laid off the whole loan balance would become due. So it can really backfire as I would be out of a job and owe $50k. I also do not receive the stock gains for that portion that has the loan. I made the decision to take this loan as the property I found should provide a better return, but I wanted to let you know of some of the risks.

If the 401k is not at a current job, you could look into a solo 401k. I have never done this and have never seriously looked into this so I don’t want to comment any further. However, you could search for many solo 401k discussions on Bigger Pockets.