All Forum Posts by: Jon McCarron

@Devon Moore Hi Devon,

I am currently doing a house hack with a 2-family in Beverly. Bought 2 years ago, Did rehab and value add. 

In general, 2 family buildings are tough to cash flow in our area.  I have a 3 family in Salem, where the numbers work much better.

As for a strategy, I think it has been said, but could you get a Heloc on your current property and use that money towards your next purchase.  For me personally, My girlfriend and I are currently working on that process now. We are going to keep our 2 family, and house hack again, this time a 3 or 4 family, and put 5-10% down. That way all expenses should be covered. I believe this will turbo charge savings, and goals of building a rental portfolio. Could that strategy work for you? Or something similar?

To bring it back, I don't thinking selling your properties at this early stage with the strategy of buy and hold will help your growth.

Also, another reason for buy and hold. We had a bank appraisal on the Beverly 2 family. It appraised for 140k over what we paid for it in 2018 (I don't have my rehab numbers in front of me, but we didn't spend close to that spread). The Salem 3-family was appraised a couple years ago for a refinance. Bought for $340k, appraised at $565k. Very light rehab. Sometimes it okay to sit on a property for a while.

Hope that helps with the perspective!

@Gregory Coppola And he isn’t paying the bills. Haha. I would do it for that amount of savings/increased cash flow. Especially, on a house hack

@Gregory Coppola I would say, it could make sense. Closing costs are rolled into the loan, and you’re still saving $200? Seems decent enough to me. Plus when you move out, the rent from your unit should be making you money. Have you shopped around to other lenders? They may see it differently.

Is the refi going from an FHA to a conventional loan? If you plan to do another house hack in the future using the low down payment strategy, then it could make sense to do so. Are you comfortable sharing any more details?

Hi James, I work in the Salem market as a realtor and also own in Salem. I could help with a valuation for your condo and what it might rent for. If the rental amount doesn't cover your monthly costs, it will cost you money each month, which will be a hinderance on your other investing opportunities. Let me know, happy to help! Jon

This thread moved too fast for me. I don't even know where I am in the response anymore, but here it goes. I don't know the laws in Pennsylvania; in Massachusetts, we cannot collect a security deposit amount above 1 month's rent. Maybe Penn is different, be sure to check the state laws.

The  divorcee tenant does not seem like someone I would rent to based on the information. Seems like the alimony is a major part of the income and that is not necessarily guaranteed.

Even though she seems nice and has agreed to pay a year upfront, you never know how that will turn out. I had a tenant agree to 4 months up front, I declined her offer and said that I would collect monthly. She eventually broke her lease. I have had a tenant who had bad credit, she stated that her credit was damaged due to hospital debt. I accepted her based on past landlords recommendations and they seemed like nice people. I had late rent for months. They have since turned around, but the story they tell isn't the one you get. I recently had a tenant break a lease, and they were amazing on paper (mid 7's credit, 3x income, steady past, etc., and always paid me on time) hey broke the lease because of life changes (new job, and moved in with fiance. I would always lean towards how they look on paper. You never know in this business.

The second tenant on paper looks better, try to get that applicant.

Nicely done! I am Raveis now in the Marblehead office (also, a newer agent). Sounds like you are going to do great things with the company and for yourself. Remember to pick up some properties of your own along the way. Good Luck!  

Don't worry about what they think. anyone who tells you that you can't do something, f' 'em. You don't need that in your life. Set your goals, have the courage to see them through. It's scary to start out, but you got to do it. In 10 years (or whenever you hit your goals), I bet these nay-sayers will say "oh, you were smart to do that. Wish I thought to do that." 

Do your research and follow through. You got this!

@Dawn Anastasi Thank you for your response. I agree with your points of trusting the team you are assembling. I am definitely planning on contacting and vetting many real estate professionals in that area, and really get a feel for how they conduct their business.

Thanks again for responding, have a nice weekend!

@Account Closed Thank you for your reply. I understand increased expenses (management, travel costs, etc.)Please let me know if I am missing any other "out of state" costs. Could you explain how more risk is involved? This is why I am posing this question to this community to get all angles and aspects of out of state investing. I am okay with looking foolish here in the beginning stages on this site (no money involved yet, and great insight from those who have done this before). Please, let me know what I should be thinking about "risk" wise. As I had stated previously, I plan on taking the next 5 months to do research and make connections with professionals in the area. Please let me know how you might approach.

Thank you for any input.