All Forum Posts by: David Martin

@David M Trapani @Jacob Sampson Thanks, gentlemen on your answers. I'm specifically hoping to gear this topic towards dealing with HOA's from a househacking perspective for those starting out. So far it seems like your advisement is to avoid them altogether. Do you have any odd stories from when you were househacking to share?

I have on two recent occasions come across HOA CCR's that are so Draconian in nature, that if faithfully observed, completely block househacking as a strategy. I'm placing this here as a place for open discussion on how everyone deals with these. Do you just call it naught and walk away from this craziness? I'll leave an example below that I just had, but seeing that many new folks are looking to start out with a househack, I think this is a good place to just dialog about this particular issue.

In the most recent example we saw, we found a home with a sizeable lot, somewhere to the effect of being 4-5 lots in size for the average neighborhood in the area, with potential for just a slight cashflow as-is, but as we saw it, the opportunity to expand by building a detached garage with an apartment over-top that would allow us to keep kosher for owner-occupant with the lender, but up the cashflow for the property by a good estimated $600 a month. Architectural rules for the neighborhood allowed for garages without issue, but where the catch came was in property use. They (1) forbade any use deemed to be commercial in nature, including down to the level of "renting even one room", they then (2) forbade any residential use of any building other than the main dwelling unit, and so on. The literal only other residential that was allowed on the property that was not part of the main dwelling unit was for the purpose of "servant's quarters". I contemplated the idea of just changing the design concept to have it be attached to the main home, but even in that scenario, the explicit CCR's against even renting one room seemed too controlling to be sane, considering that if this worked as we wanted, there were like 200 other nearly identical situations with lots with homes in that neighborhood that we would have just wanted to rinse and repeat that strategy.

@Sho Firecomm No shade man, but you have me so confused... how are you "really wanting to throw myself in the process of buying a home and go through the live and flip process" on a house that you say doesn't need any work? What's there to flip or rehab?

Related to your question... I think you're too much at risk with a house with no (known to us) opportunities to rapidly increase it's value to cover an LTV spread when it comes time to refinance out of that hard money, so you're either going to bleed slowly to death on paying interest to hard money that you can't get out of, because you can't get anyone to refi, or you're going to end up having to hustle extremely (read this as take on another job or two) to pay that thing down until you're in that range to refinance. Your only saving grace in this scenario is if appreciation in your area is going up insanely fast, like 20% a year or something. Cheap money > Easy Money

@Trent Egenlauf Not sure what your current stash is, but on this list are 7 currently banks offering rates matching or exceeding current inflation rates, but with different minimum balances.

https://www.bankrate.com/banking/savings/best-high-yield-interests-savings-accounts/

Just a simple request. Boolean search.

Being able to use operators like AND/OR/etc... 

@Trent Egenlauf sounds like you're looking for pretty low risk and a short time frame, so just keep it simple and liquid in case you just find a stellar deal along the year. Find some high yield CD's or savings to just offset the eat from inflation, it's not sexy, but beats traditional savings rates. Shouldn't be hard to find something around 2%, which is slightly above current inflation, which is probably going to stay pretty flat around 1.8-1.9 this year. Fed is still being delicate in their methods to balance everything out, and I'm pretty sure their waiting to see where elections 2020 goes before they make any big moves.

Use small bits of money to economize where you can as well. I could easily state that my kitchen knives and crock-pot have achieved a nearly incalculably high internal rate of return.

@Bryan Devitt One of my gifts... taking topics and grinding them down to seemingly absurd analogies off the top of my head, that after being spewed out, actually make sense.

@Trent Egenlauf really depends on your appetite for risk and desired returns while going through your accumulation. Additionally will depend on how available you want it to be. 

Tough to help someone decide what kind of pizza to order when we have no perspective on what characteristics you think a good pizza has.

@Hiren Patani If there is no public sewage utility hookup (with enough capacity to cover the number fixtures you will have on the land), then my personal vote is that the septic system is the largest hurdle to clear in the process of developing the land for a mobile. Sizing and placement of the septic could have an effect on where you're able to build on the property and what the minimum size property (and property width) would be required.

An example scenario might be that permits require the septic to be a certain distance from the property edges, as well as the water well, so based on that, you may end up finding that the size and or shape of your property may limit the size of the septic and/or where it is placed, thus the number of fixtures you can run off it, which in turn will limit the number of units you can run, as well as where buildings and well can be placed.

@Zack Aboona It's pretty common here in Houston area for apartments to do a small lease arbitrage for units that have washer dryer hookups. So they lease-to-own for, let's say, $25 a month, a full washer and dryer set, and then turn around and make a lease addendum for the apartment for an appliance rental, where the tenant is paying something like $40 per month to use the appliances. This would allow you to sort out the need with the current tenant, and still have ownership of the items. If this prompts the tenant to want to stay longer, then they will effectively have paid for the unit over time, and you'll have an upgraded space for the future tenants that should demand a little more rent. If this tenant bails too soon, you have the optionality to wrap the cost in to the next tenants rent, or end the lease and re-install your old equipment. On your lease renewal, simplify the arrangement and just add that cost to base rent if desired.

It's effectively really similar in structure to most real estate deals... leverage credit to obtain something, and then charge more for it's use than it costs to obtain it, set aside a percentage for repairs and maintenance, and pocket the net.