All Forum Posts by: Jon Schwartz

Jon Schwartz has started 37 posts and replied 926 times.

Originally posted by @Eric Alvarez:

I currently have 8 months left serving overseas and looking to invest in a multifamily back in the states (SOUTHERN CALIFORNIA) to rent out while i live in. I want to utilize my VA loan. However, I believe I am required to live in the property for the first year if I utilize the VA loan. Any suggestions on how i could get started with this process while i am still overseas? Would it be possible to still utilize the VA loan for a property in the states while im overseas? Is there any way my parents could possibly back home could assist me with this? I'd love to hear everyone's tips and advice.

Eric, I don't know any VA loan loopholes, but I wouldn't sweat having to wait eight months. I'd save save save right now. I think multifamily prices are going to be a little lower in eight months. I'm no sage, but if it were my money, I'd wait.

Best!

Jon

0 Votes

Originally posted by @Matt Lawenda:

I am Vacation rental investor in CA, looking for some ideas on some other areas that we can invest $100K using a 1031 Exchange. Open to long term rental suggestions as well. Any ideas or thoughts would be a much appreciated. Thank you

Oh, hi Matt!

(Sorry, couldn't resist.)

For longterm rentals, I highly suggest checking out Inglewood down here in LA. With the 2028 Olympics on the horizon, a *lot* is going on there.

Best!

Jon

0 Votes

Originally posted by @Mike Franco:

@Alex Bekeza I'm in the san gabriel valley, so I was limiting my area to where I could drive occasionally.

So my area would span a 50 mile radius, from thousand oaks to san bernardino/riverside to orange county.

I'd be willing to increase that distance a bit to find deals though.

Where are CA outliers located?

Everywhere I look in socal, house values have skyrocketed and gross rents are in the single digit percents.

Mike, I've been following this thread to see what kind of answers you've been getting. I love this problem. How do we turn $1M cash and $1.5M of paid-off real estate into $7.5M in 30 years without any income? And your area of focus is where I focus my investing, too.

First, let's take a look at your assumptions: You want 10 houses at $500K ARV that will each be worth $750K ARV in 30 years. Since 1975, LA has averaged 6.7% appreciation each year. So going by the longterm average, those 10 houses would be worth more like $3.5M each in 30 years! If we assume a more conservative 4% appreciation, those 10 houses will be worth about $16M in 30 years. You could hit your $7.5M goal with just 5 houses.

But I don't think you should buy 5 houses. You should buy a 5-unit (or bigger) apartment complex. If the building is 5 units or more, it gets underwritten my the lender, not you! That means that the property's income has to quality for the loan, not yours. As you don't have income, this is a good thing for this situation!

The caveat is that you might have to make a larger down payment to ensure that the property's current income covers its debt obligation. You might be looking at a 40% down payment. Fortunately, you have cash on hand! $1M is 40% of $2.5M, so you could buy a pretty decent building.

Since your advantage here is time, you should target the most promising area you can find in Socal. Where will rents be the highest relative to where they are now in 10 or even 20 years. As the building's rents climb, so will the building's value, and you (or your heirs) will be able to refinance out equity for living or further investment.

I think coastal areas and LA suburbs are your best bet. I wouldn't buy a property on the coast for few of what climate change might do to the coast over the next 10-20 years, but I'd buy near the coast. They aren't making anymore coastal land! And as transportation modernizes over the next 10-20 years (hello, self-driven cars!), homes that were once a painful commute will become a much shorter drive. (Obviously, I think COVID-driven city flight is a temporary phenomenon.)

Anyway, I'd love to keep figuring this out with you!

Best,

Jon

0 Votes

Awesome, @Andy Orr!

You should also calculate how this investment will contribute to your net worth as your tenants pay down the loan principle! While you're paying $192/month to live in one of the units, how much principal is being paid down each month?

Great work!

Jon

0 Votes

Originally posted by @Jeff Pollock:

Hey Everyone, I'm really stoked to be under contract on a 3BR 1.5BA single family home in Lake Tahoe, CA and I'm trying to figure out what makes the most sense long-term. What really sold me on the house is a completely separate great room and half bath on one side of the ranch style home with a separate entrance. My plan with the house is to have it as my primary residence and house hack the next couple years until I can get into another property, and in the meantime increase the value of the property/get it to a place I can cash flow, likely with AirBnB given the location.

The question with the separate space is, do I create a nice master bedroom with full bath that connects to the rest of the house, or should I make the separate space into a whole separate in-law unit? In the interest of beginning with the end in mind, I would ideally hold onto it long term, have it cash flow, and always have a place to go in Lake Tahoe when I wanted to.

If I went the in-law route I feel it would be an easier quality of life to house hack with short term rentals, because I could essentially rent out either side of the house and always have a place to stay. The downside of this would be that the place itself would be less appealing to larger groups coming to Tahoe to vacation that would pay more per night for a 4BR 2BA with master bedroom. I also think that while the in-law provides more flexibility, the route with master bedroom and bath may increase the value of the property more than an in-law and give me more flexibility in terms of exit strategies. Maybe I can create the in-law for the short term and plan to be able to add a door to the main house if I need to open it up down the road to turn it into a master after I move out?

I haven't been able to find any solid analysis comparing these two or estimating ROI or costs to build associated with both, so any help would be very much appreciated!

Jeff,

It sounds like you have a good handle on what you need to consider in making this decision.

I'd suggest you compare the expected income of a 4/2 versus a 3/1 and 1/1 combo at: https://www.airdna.co/airbnb-calculator

I'd also look at how things are selling on the market now. What's a 4/2 sell for compared to a 3/1 with a 1/1 ADU?

Once you have a sense of how each option will perform in terms of cashflow and exit, then you can compare the costs associated with each option to derive an ROI.

Good luck!

Best,

Jon

0 Votes

Originally posted by @Niccolo Fazio:

Hello Everyone,

I am looking to break into the Real Estate game and trying to finance my first purchase.

For it, I am looking to house hack a 1 - 4 family building (duplex) here in Texas. Do I need to disclose to the lender that it is a Duplex? Each time I do they increase terms for the property. However, I am house hacking and looking to live in one side.

If it is a Single Family I'll only need 3.2% down, but if they know it is a Duplex they want 15% down on an FHA.

At that point, we would do a Conventional since we are 5% shy of losing insurance.

I understand the increase for an "investment" property - but wanted to see what strategies you all have used?

Niccolo, you should be totally truthful with your lender. Otherwise, you could be charged with mortgage fraud.

And more importantly, the lender is going to order an appraisal on the property. Your lender is going to know exactly what the property is -- so don't even try to mislead!

Good luck!

Jon

0 Votes

Originally posted by @Chris Webb:

Thanking about waiting to make our first turnkey purchase until the new year as the markets seems like it’s getting closer to a big change. Just not sure it would make a difference or not in the world of turnkey purchases. Advice or insight appreciated!

Perhaps consider the rental profile you'll be engaging. Is it likely your renter might be affected if no further stimulus is passed?

1 Vote

Originally posted by @Justin Lopez:

Any meet ups a newbie can attend and network in the Los Angeles County?

Justin,

For sure! Go to meetup.com and search "Los Angeles real estate." There are a boatload!

Best,

Jon

2 Votes

Originally posted by @Brandon Carlson:

Hi BP,

I'm an agent here in SoCal and own a SFR. I love the appreciation in California, she's done me well lol. Now, I'm looking for a cash-flow play.

I have a friend that lives in Bloomington, and he's been telling me to invest out there. From what he tells me, the area is upcoming, universities are near by, and cash-flow has upside.

Has anyone personally invested in Bloomington or work in the area as a realtor?

I would love to get insight.

Best,

Brandon,

Hey buddy!

I haven't invested in Bloomington, but I've looked at it closely! I rated all the MSAs in the country by metrics that correlate with rent growth, and Bloomington ranked #6 out of 382! Solid population growth, and importantly, very little new unit construction over the last decade.

Best,

Jon

2 Votes

Originally posted by @Travis Gregory:

Howdy BP community! My wife Michelle and I recently came across the BP website and some of the videos while researching real estate investing. Since we're not mega millionaire investors, the California market is mostly off the table for us so we decided to consider investing out of state. We are in our 40s with two incredible daughters, one of which has a very rare medical condition that constantly keeps us on our toes. We've been looking at REI as a long term way to make our family's future a little more stable and the ability to leave behind wealth and care for our daughters when we're gone. Looking forward to learning from the community and eventually finding the right property to invest in. Cheers!

Hi Travis! Welcome to the community.

I'm awfully sorry about your daughter's medical condition. We're in our late 30s with one daughter in fine health, and my heart goes out to parents helping their young ones through difficult circumstances.

Have you looked into househacking a duplex in your home market? We bought and moved into a duplex last year here in LA. If you can afford a large duplex (for example, a 3/2 on either side), the income from the other side really supercharges your principal paydown and appreciation. It's a fantastic longterm hold that builds significantly equity over time. It might also lower your monthly cost of living on net. And with an owner-occupied property, you can put as little as 3.5% down on an FHA loan. Lots of options!

Good luck!

Best,

Jon

1 Vote

← … 53 54 55 56 57 58 59 60 61 62 63 … →

All Forum Posts by: Jon Schwartz

Jon Schwartz has started 37 posts and replied 926 times.

Post: VA Loan? LONG DISTANCE INVESTING?

Post: What to do with $100K?

Post: getting started in BRRRR with $1M cash and $1M+ assets? leverage

Post: First Investment Property - House Hack in Reading, PA

Post: ROI on Master Suite or In-Law Unit in Vacation Destination?

Post: Financing your first Deal

Post: Should I postpone a turnkey purchase to see what the market does?

Post: Newbie looking for meetups

Post: Out of state investing - Bloomington Indiana

Post: Another new investor from California 😅...