All Forum Posts by: Jon Schwartz

Hi I’m looking to move out of Southern California and looking to house hack or purchase a home where the market is increasing. I’m looking to rent my home In San Diego. I’m planning my next career move and want to invest while doing it. Any good markets right now for house hacking?

Hi everybody.  I'm in Santa Clarita, CA... northern Los Angeles County.  My wife and I are in our forties, have established careers with steady incomes, and in our second purchased home.  We're currently in the process of refinancing our house with a $150,000 cash out.  Our goal is to use around 2/3 of that for a rental down payment, and a third for repairs and improvements.  It would be amazing to find something within half an hour of here, for convenience and to hopefully self-manage the property.  Though it sure seems nearly impossible to find deals where the numbers work within our budget.  To be fair, we haven't gotten the pre-approval yet (hopefully within the next week), so our realtor and we haven't gone too hard.  We have a realtor and mortgage broker, but will still need connections with inspectors and contractors.  At the same time, we also consider long-distance investing, where we can get more for our money.  There's so much to sift through and consider!

Thanks Bigger Pockets and community!

Brett Durfee

So I talked to a friend that is a lender. I know that now would be a great time to Re-Fi because the rates are super low and the market is high. I closed on a house hack using a conventional loan in March 2020 with a rate of 3.625%. I could potential lower the rate to around 2.75%. This would decrease my mortgage payment and increase my return from tenants. 

What are the pros/cons of re-fi right after you purchased your first home? 

Thanks,

Ashton

"Please this is all right-wing propaganda put up by pro-Trumpers with no basis in fact"

- Gavin Newsome

Poor Gavin, he doesn't realize the top 1% pay a disproportionate amount of taxes in Cali.  

Meaning it doesn't take too many 1%ers leaving to shoot a king-size hole in your budget which means passing even more taxes on those stuck in Cali. 

Thank you Bigger Pockets community, my name is Michael Pison. I am an Occupational Therapy Assistant and my goal is to create cashflow  through rental properties here in LA county and possibly Nevada and Arizona. I am at the very early stage building up my income/tax history as well as saving up capital for that first down payment. In the mean time, I'd enjoy any conversation on experiences with rental properties here in this area. Thank you for your welcome. 

To set the stage, I'm self employed with an over 800 credit score. Between my wife and I, our only loan is for our car. We have about $60k saved up in just a couple years and a $100k in a committed gift from family towards the down payment of a house. We have the option to use a VA loan/FHA loan to finance a property. My goal has been to use the gift of $100k as a down payment but to still use a VA loan (allowing us to secure a lower down payment with out PMI or MIP), paging only the mortgage funding fee on the financed amount. We live in Los Angeles, which, as many have acknowledged on BP, is an expensive market.

We've been analyzing deals on 2-4 unit buildings for a few months and think we have identified areas and specific properties that would make great opportunities for a house hack. We think a house hack would provide us the opportunity to live In one unit and rent the others, while paying the same price we're paying now to rent, or a few hundred dollars more, after expenses, Capex, repairs, vacancy (still well inside what's comfortable for us) to get into our own place and start building equity. I believe we'll even be able to cash flow at the end of year one if we can refinance and move out to another multi-family.

the problem we’re running into is financing.  I have not been able to find a lender who understands how self employment income looks and who is willing to take the time to understand.  The first lenders we approached saw lower income on my business  tax return but didn’t take the time to understand that this looks like lower income and high expenses when in reality, My expenses include a salary (to myself), legitimate pre-tax dollar expenses that a W2 employee would pay with post tax dollars (portion of my home rent, cell phone,

, etc.), etc.

What’s funny is that, when I discussed my numbers on the phone initially, I was up front about the nuances of how my income looked vs my after tax take home, and with my proposed lenders in both cases (rocket mortgage) and a local broker, both thought we would be good candidates for a loan, and started quoting us low mortgage rates like 2.3%-2.6%.  But, when they saw the 1120s, the private broker started dodging my calls and Rocket mortgage’s rep got rude and told me I had no income so I couldn’t qualify. Then proceeded to make me feel dumb for trying to buy a multi million dollar property with so little money.

I guess my questions are multi pronged: 

1. are there specific types of lenders who work with self employed income and will let me take advantage of a VA or FHA loan? Or is it probably not possible with a traditional lender?

2. Is there a better way to showcase my income to make me more attractive to a traditional lender or better explain to them my situation?

3. Am I SOL? Do I just have to wait till I can save more and restructure how I pay myself to show more W2 income as opposed to using the tax advantages of my corporation?

I feel like my wife and I put in a ton of work/time in the last three months to try to make this a reality, to get out of the rat race of renting in LA, and to be pragmatic about finding places where the numbers would work. I’ve found places I want to make offers on and I’m now a bit stuck, without the financing in place. Any advice is greatly appreciated.

I'm looking to see if anyone is hosting any networking events or meetups of any kind in Los Angeles. Please comment or message me if you know of any starting up soon.

I need some advise biggerpockets community! I have been learning about REI for 2 years now. I've read countless books and 100s of hours of podcasts. The number 1 reason guests have said people don't get started is because they don't do their first deal. I am ready for this and I wanted to post my thoughts incase some of you see any flaws but I feel my plan is pretty solid.

I am living in Everett, WA and I am planning on being here another year before I move to Boise, ID (I want to find a different job, maybe sales or RE and be close to family) I am living in a travel trailer where total expenses are $1800 for space rent, payments on truck and trailer, and insurance ($800 in principle). A particular duplex i am looking at is $350k and could rent for $2800 before fixing (just am example of house prices, pretty high). If I live in one of the units, I could be saving close to $1000 a month, even if the other units don't completely cover the mortgage.

I am looking at fixer upper multifamilys that I can get an FHA loan to house hack. My wife and I can manage it ourselves. I work four days a week and I am always looking for projects to do on my time off. I make $140k a year as a foreman for a utility for 3 years and saving $4k+ a month so I can handle unexpected events. I have $40k cash, $30k stocks, $30k 401k/Roth IRA, $10k in principle on my truck and trailer. I have a paid off car to keep.

I plan on holding the property for a year and then selling it when/if we move. My concern I heard on the podcast is that it's not ideal to FHA a house hack. That would be my only concern. I am also a newbie and am thinking maybe a cheaper house in my hometown in Eastern Oregon might be safer because I have a lot of connections and family but its 6 hours away.

I would love if anyone could tear this apart or tell me how this will not work but I think it is a pretty solid plan.