All Forum Posts by: Jason Nguyen

Investment Info:

Townhouse buy & hold investment.

Purchase price: $440,000
Cash invested: $105,000

Medium-term Rental

You don’t always have to buy a house to house hack. You can always rent an entire house from a landlord and ask them if you can sublet the rooms out to an individual tenant. Live mortgage free first and then save up for a bigger down payment amount while improving your W2. 

If you want more cash flow, trim down the number of units and stay afloat with 100% equity on all the properties with highest appreciation rate. No mortgage means more cash flow, less units mean less expenses and less management. Let the appreciation ride up your portfolio while enjoying all the cash flow that you got. 

I will hold strong in 2023 and 2024. It’s the best time to accumulate any property on market right now. 

When interest rates go up 1%, property value will need to adjust -10% in order for the buyer to qualify for the same amount of loan or same monthly payment. Example, a $500k loan with 5% interest rate has the same if not exactly the same payment as a $450k loan with 6% interest rate. We’re seeing CPI dropping back to 7.7% from 8.2%. This is an indicator that interest rate will drop significantly once inflation is cooling down. I’ll hold strong in 2023/2024 while accumulating more properties at a cheaper prices and refinance once interest rates drop back down. At that time, I’ll probably see a huge equity gain because people will start buying homes again due to low interest rates and home prices will continue to appreciate.

Personally, I’d pick up a Quadruplex in an upcoming neighborhood, simply because it has more doors. Say, Unit D moves out you still have Unit B and C paying rent while you occupying in Unit A. Whereas, say a Duplex, if Unit B moves out while you’re living in Unit A then you’ll probably have to pay rent for the entire building while looking for a tenant. Single family home is even worst unless you rent it out as room rental, but that can be uncomfortable. 

That is just one thing. You also have the ability to do short-term rental on one unit to boost cash flow and long-term rental on the others to keep the monthly mortgage afloat. Many things you can do with the Quadruplex.

Congrats on y’all first move!! House hacking is always the way to go right after college. I introduced house hacking to pretty much all of my clients and they’re living mortgage free. We usually target a townhouse with 4 bedrooms and a basement that can be turned into an in-law suite. Depends on the area, but most areas in the Fairfax county can be rented for much higher than the surrounding counties. Master bedroom can be rented for $1000-$1200, two small bedrooms that share the same bath can be rented for $800/each, the basement in-law suite can be rented for up to $1600-$1800. The owner lives in one of the room and manage all the tenants.  

It’s good that you’re starting investing! However, I still see a lot of miscalculation in your profit estimate math. 

A few questions for you:

1. Are you going to hire a realtor to help you sell this property once finished? That’s 5%-6% commission fee.

2. What are the holding costs? Insurance, utilities, etc?

3. Is there capital gain tax that you need to pay in the state where the home is being renovated?

4. Consider city tax, county tax, etc when selling the home also. 

5. Any seller subsidy you’re offering to the buyer during this market? Interest rate is at its peak right now and buyers are coming in low and asking for ridiculous number of seller subsidy.

Once all these or maybe even more are taking into consideration, then the final number will be your profit. You can obviously do a 50/50 split. 

It's the same in Northern Virginia, and people became more creative by renting rooms out instead of entire home. Usually, people would purchase a townhouse (because it's cheaper than single-family home) that has 3 bedrooms upstairs and a basement that can be turned into an in-law suite. I'm not sure how the Seattle market room rental looks like, but here people rent their master bedroom out for $1200/month, the 2 small bedrooms that share a bath for $800/month each and the whole basement in-law suite can be rented for $1800/month. 

That's $4600 in rental income. Depends on your mortgage payment, $4600 in rental income usually leave the landlord some cash flow while riding the market appreciation. Airbnb is also an option.

Usually lenders want to finance the property under your name if you are going with Fannie Mae and Freddie Mac loan or conventional loan as people usually called. However, you can quit claim deed to your LLC once closing on the property. There are DSCR loan programs out there where lenders lend directly to the LLC without going through your personal profile, but the interest rate is a bit higher due to more risk lenders are taking.

While renovating a home in Atlanta (East Point City to be exact), we found two sinkholes that are causing by the stormwater drainage pipe that is leaking under the neighbor's driveway. It has been releasing rain water from the entire neighborhood and causing two massive sinkholes that are spreading under his driveway, to his yard, and all the way to my property and has damaged the foundation of my house. The neighbor doesn't seem to care if his home is at risk of collapsing or my house will be collapsing soon. I sent this over to the city, and they said that the pipe is within private property, and they are not responsible for it. The neighbor has refused to fix it, and my house is at risk of collapsing within months. What should I do now? I cannot send the crew in to fix the pipe since it's under his driveway. Any help will be very appreciated.