All Forum Posts by: Emil Pinlac

Hey @Chris Hester 

I would imagine that this strategy has the potential to get complicated.

As Nina said above, I guess the first step would be to check with the city to make sure you can do it in that district/area/neighborhood. But then after that, you would need to buy a single-family home and work with a realtor and ask them to help you look for properties that have the potential to be converted to a duplex - which can be challenging, because their inherent structures themselves might not be suited for what you're trying to do (especially if you're trying to add a bathroom or separate heating, or plumbing units. 

I think you're better off finding a SFR with a big backyard or ample garage space, and consider just building an attached or detached ADU instead.

@Kenneth Garrett very interesting. Thank you so much for your insight and advice, man. 

Has anyone successfully utilized this strategy? 

I'm talking about going 50/50 on a MFH deal with a friend (or two) with all of you living in one of the units, while you rent out the other unit to a tenant, 

or

going for equal splits on a SFH while house-hacking some of the other rooms to renters?

We currently rent-hack a place where we have been for the last 4 years, and it has served as our house transitioning from college to our career-level jobs, and we've been paying very generously low rent (sub $300 each). But now we are considering just getting our own place, with the intent of building equity AND (hopefully) selling at a profit anywhere 5, 10, or 15 years down the line. But the ultimate goal would be to put our money toward purchasing an asset that would actually belong to us, and to create passive income while we build our careers. 

Is this a good move? I understand that going into business with friends could be a challenge.. but I figure that could be best mitigated with a strong contract(?) and our current 4-year living together history. 

What are the community's thoughts? 

Hey @Ruben Correa

Honestly, I would save... but that's primarily because I err on more of the "less-risk/conservative" side. I think @Joe Villeneuve has a great point above where the decision to buy or save right now does technically depend on the deal itself, and your own financial situation/real estate goals - however, for me from a purely "market condition" standpoint - I say to wait and just save. 

The economy moving forward is currently uncertain. We don't know how the Pandemic is going to affect things in the short-term, and that can be reflected in a drop in home values and a potential foreclosure crisis. ... I know the argument against that, is that property values are currently rising, and the federal interest rates are super low. But for me, I do believe that the fed rates will continue to stay low for the next 2-3 years, and I feel like by then, we'd have a better idea of how things in the Real Estate market will land at that point. 

Hope this helps!! 

Hey @Kenneth Garrett

Thanks man! Yeah, I figured it might've been too easy to just rely on the RedFin map for comparable values of properties nearby.. hah. 

So, just to quickly summarize - the best way to get good comps, is to look for other properties that have JUST recently sold? NOT at other properties that are in the same neighborhood that AREN'T selling? 

Hey @John Williams! 

First of all - congrats on crushing the game with the purchase of a couple of properties! I'm honestly hoping to get to your level in the next few years with my own real estate investing journey. 

To your current challenge - could you be more specific as to what you mean by asset-based loans? Did you mean like taking out 401(k), IRA, or other retirement account loans? Or something else?

For me, I think my biggest challenge IS just playing the waiting game. haha. I got the real estate bug just this past March - but I have been really trying to nail down my entrance strategy into RE while saving as much as I can and learning as much as I can in the meantime. I've set a goal for myself to really begin to purchase in the next 1.5 - 2 years., to ensure I can still (hopefully) get some of these low-interest rates and to save as much for a downpayment and reserves. 

It's so tempting to just jump the gun and buy now, however, it just wouldn't make sense.. especially with the uncertainty of the current pandemic and my lack of any huge emergency savings. 

Would anyone be able to give me any actionable advise, or insight on how else to verify/analyze comps in certain neighborhoods?

Currently, I've just been doing deal analyses using RedFin or Trulia on whatever comes to market, and I have just been using their resources - namely RedFin's map (as shown in the picture), where it shows me how much the other properties are valued around the house for sale. As you can see in the picture - the house for sale is at $251k, however surrounding houses are anywhere between 214k and 321k, which puts it at a pretty good price for negotiation and/or forced appreciation if I fixed it up. 

Is this an accurate way of looking at comparables? Are these numbers from RedFin even accurate? Aside from contacting other REA familiar with that area, or property managers - are there any other websites that can either verify RedFin's numbers or give more specific information regarding neighborhood property values?

Hey! @Gitit Hefetz, 

Another colleague on BP recommended I check out this website, when I too, asked about ADUs (Accessory Dwelling Units): https://maxablespace.com/

Like what DJ said above - because of the housing shortage, the government has been a lot more lenient and has actually been pushing for the creation of these detached or attached ADUs in properties. I think the one caveat to doing them right now though (from what I've read), is that there aren't very many appraisers who know how to properly value them once they are built yet.

I'm sure that'll change in the few upcoming years. I definitely plan on building one myself in my future SFH, so I'm making sure that I'll have backyard space to do it.

@DJ Dawson

Yeah, I think the priority for me, is to focus on purchasing a property here in Sacramento first, while doing some form of house-hack - even if it means coming out of pocket sub-$500 per month. And to clarify - I'd only be okay with being negative cash flow AS LONG AS it cash flows once I rent out the entire house/units over the long-term. Do you think that is a viable strategy? 

And then my thought is that once I have a couple properties under my belt that are properly cash-flowing, then I can consider other strategies like OOS investing, or finding a good syndication deal, or even jumping into bigger, better properties at a higher price clip. 

@DJ Dawson 

Nice! What neighborhood in Sacramento? Hopefully I can replicate your success sometime soon down the line. I feel like you bought at a pretty good time too; 2 years ago from what is currently a situation that could either go bad very soon, or can continue trending upwards for housing prices. haha. 

I'm kind of at a similar crossroads though. I do/did initially want to get started in the small, multi-family space for my first real estate investment, however, I'm beginning to see that it's an ultra-competitive submarket here in Sacramento. I'm considering maybe going for a house-hack of a single-family home, and renting it out per room. Would you be willing to share your experiences with that? Are you taking the masters and they take the smaller rooms? Or vice versa? Are your tenants receptive to living with the home-owner?