All Forum Posts by: Joe P.

Why wouldn't it be? The HELOC would be the only lien position and you have as much equity as the market can bear. If your doing well cashflow wise and see an opportunity to maintain that, whilst turning your equity into a BRRRR opportunity, then wonderful.

Congrats, a house hack is a great idea. Hope everything works out.

On the driveway situation, is it repeat offenders or different people every time? Are they close neighbors or unknown whereabouts? Do you have any signage up to indicate its a private driveway and blocking/parking will be towed?

A few thoughts:

1. You're treating this as a BRRRR with a refinance after 6 months. But to do that successfully (that is, in my opinion, break-even or better on your initial investment with a cash-out refi, e.g. you put in 100k cash for purchase and rehab, and you can cash out 100k), you are missing the mark here. You're going to spend thousands on loan costs just to spend thousands on more loan costs in 6 months? Makes no sense to me. If you were getting an initial mortgage at 150k for example, and then cash-out refi at 250k loan, ok, maybe...but this isn't a true BRRRR.

2. Your $108 per month vacancy is way, way, way too low. You should plan for 1 month of rent as vacancy, so $3600 a year. Most units take investors about a month to turn over. Some can do it better/quicker, fantastic, good for them, that means more cash in your pocket. But you should absolutely account for something different.

3. 5% for repairs and CAPEX is probably too low over the course of time. You're spending money to rehab this unit early on, which is great, so 2k for maintenance and 2k for CAPEX seems right if everything is new/serviced/clean. But those percentages will likely need to go up over time.

4. As an investor, there is likely little chance you get a loan for 4% unless its your primary residence. If this is your first deal, and you have a perfect credit score, maybe I could see a 4.5%? But unless you've verified these numbers with a mortgage company, its probably not realistic.

All in all, I'd re-run once you firm up some of these numbers. Don't forget ancillary costs, e.g. city costs (permits, inspections, licenses, etc.), other utilities you may have to front when units are vacant or being rehabbed, HOLDING costs, which is to say money you need to spend when you have no income coming in, e.g. during rehab, and you should always, always, always, account for property management.

Your time will become sucked up in trying to rehab, rent, and manage this property. What's that worth to you? A deal that has $100 cash flow per month with no management fee to me, is a 0-sum game. You want to be an investor, do you ALSO want to be a landlord and manager? Did you get into investing to get passive income, or did you get into it for a second job? That's the difference in being an investor and a landlord. I did it for the former, so I have someone managing for me. Consider it.

I just responded on Quora to another person lamenting about the expenses of his properties. His numbers were...essentially buying SFH for 30k and renting out for $600. Complaining about everything, how much things cost...

DUH! A roof on a 30k house probably has the same cost basis as a 100k house. A rental-grade fridge from Lowe's is $600, doesn't matter if your rent is $600 or $1000, you pay the same price.

Each unit appears to be renting out for $550 a month? A 2 bedroom for $550 a month?

I love the house hacking idea, but you're moving into a place with subsidized tenants, likely a class "C" area, and you're going to self manage? Welcome to nightmare land. Are you handy? Do you have experience managing properties/tenants?

As an investor, we make money when we buy. This deal appears to be a market value property with low rents, high expenses, and a lot of headaches. No wonder the seller is selling -- he's getting out of this headache. Unless the units can be rehabbed to rent for +$800 a month, what's the actual deal here?

See if you can find a duplex way under market value that you can rent out one unit, and live in the other. Start small. Don't bite off more than you can chew on your first deal. Get your feet wet on the operations of a property before you do a major deal.

Most important thing missing? ARV. What's the ARV of this property?

No one said the article is bunk. If you read it, there's nothing bunk about it. It's providing the statistics of the number of new leases.

Just re-did my personal residence; it was originally a 10% down 30-year conventional around 4%. I refinanced into a 20 year (shaving off 4 years of payments), removed PMI, rate is 3.125%, "flipped the script" on principal and interest payments, and overall my payment went down $80 per month. Very happy with it, perhaps folks are doing better, but my mortgage guy has been great.

I wanted to refi my investment property (currently a 30 year @ 5.625%, 25% down, about 2 years in) but my guy said that well is not as abundant. I also have about ~75k in principal balance so the flame isn't worth the candle for those folks, probably.

@Matthew Fermino welcome, congratulations, you're one of the incredibly lucky or smart folks who invested in Boston and realized some great appreciation thanks to the influx of business and citizens. What area of Boston is your place in?

I would only sell your property if its truly a DOG for you -- a dog being negative cash flow (costing you money), not appreciating properly, needing an influx of cash to survive, etc. If none of those conditions are hit, I'd consider keeping it and possibly looking to HELOC to purchase turnkey or BRRRR properties elsewhere (for me, I'd prefer the latter to repay the HELOC loan when needed).

It'll be difficult to time a peak and recession market, but if you're able to make the numbers work it would be a good idea. Personally, I'm a little leery on the economy right now and how that will microeconomically affect me, e.g. equity in my home reduces due to a drop in values, the historic pricing and value we are getting on borrowing money dries up, etc., but a deal's a deal. Run the numbers in best case and worst case and see if it plays out for you.

I'm HELOCing my primary home (small amount) to fund a rehab across the river from Philadelphia, and hope to cash out refi to make myself whole in 6 months or keep utilizing the funds for more properties until I reach a desired point.

Yeah, seems fair. New cabinets for that size kitchen would probably be about 5k+ installed.

Did you even read the bill? If AOC actually wanted to do that, which she doesn't, and hasn't eluded to, then it would be in the bill. It would obviously be struck down immediately, but there's not even a mention of that. Don't make up stories, especially on those that don't have an actual piece of legislature behind.

I certainly don't agree with the majority of the bill, but its this nonsense I read from folks that really stirs me up. You don't like her policies? Fine. Vote for someone else. But don't make up lies, man.