All Forum Posts by: Jon Li

Thanks @Jared Viernes! Definitely agree that it's "happy wife, happy life." I have discussed w/ my wife and thankfully she's open either way. She does love the home but can see the benefit in having an extra source of passive income. I'm also torn since my wife and kids love the house, I do wonder if we'll come across another "dream house" a few years from now, though of course seeing an extra check each month from a couple rentals will help with my patience ;) 

What would you do if you were in this situation?

Hi, I just got out of active-duty and am considering moving to Reno to buy/live in either a SFH (renting out part of it) vs. a multi-family (duplex or quadplex). I would really appreciate any thoughts or advice as I am learning a lot about REI and would hate to make a bad decision on our family's home purchase:

• SFH: ~$750K, would require additional ~$90K downpayment on top of the VA Loan (given ~420K limit for 0 down)
  • Positive: Wife/kids love the home; am sure I could Airbnb the in-law suite to help pay mortgage, in great area
  • Negative: Need to use $90K downpayment/opportunity cost of having money locked up; home prices have peaked in area and may be due for correction

• Duplex/Multi-family: ~$300K
  • Positive: I don't need downpayment, can use downpayment funds to buy another investment property, income from other unit(s) would help cover mortgage (though not totally)
  • Negative: Apt/duplex life isn't as appealing, though could do it a few more years and save up to buy dream home in next down-turn, just ok area (though kids are young so schools don't matter yet)

The emotional decision would have us jump at the house as again my wife/kids love the house has a nice yard w/ playpen, safe area, and we'd love to settle down after the constant moves but I would hate to be in a financial bind in a couple years if there is any downturn in the economy, especially if I have the chance to have additional side income by investing the downpayment funds instead as well.

Any advice?

Thanks Adam appreciate the honest feedback!

To answer your questions:

1) My first question is how the rent is only going to be 1500 if you are currently paying 2600 I'm rent. If that's the case why would you not be in a place that should only 1500 right now? Just a finance question to start the process.

--> Not sure where the 1500 in rent you mention is from. I do think I could raise rents from 5500 by 1500 to 7000 total.

2) I actually just separated from the military, so I plan to live there at least for the next few years, but I can see why adding in the property mgmt fee would help with analysis. 

I will definitely take a look at the docs on the site; thanks again!!

Hi, I'm relatively new to REI and am considering purchasing a quadplex in SF which I would occupy. It isn't cash flowing, but I wonder if it's a good opportunity given that:

1)  I'm paying $2600 rent each month anyway

2) I could use my VA loan for a 0 down payment purchase of a ~$1.25M quadplex in SF

3) Area is up-and coming w/ new Whole Foods, etc; chance for appreciation

4) Long-term tenants in high demand area, no concern of vacancy

5) The units are below-market rent (could likely increase at least $1500 total)

Would greatly appreciate any feedback (please note, numbers below are approximate). I wonder if I should factor in mortgage interest tax deduction as well though perhaps too small to matter. Another part of me thinks I should wait a bit and continue renting until the market cools down to use my VA loan, though who knows when that will be...

Thank you for the awesome responses! This is a SFH near Norcross, and the rent is around market average (though about $200 below what Zillow's Zestimate is). I feel like I'd need to raise it at least $300 though to get a decent cash on cash return. I also refinanced it recently to a lower interest rate (but foolishly didn't do a cash-out refinance as I didn't really know that was a good option--this was pre-bigger pockets).

Yes, I'm trying to avoid the realtor fees/repairs by selling to the current tenant, though believe I could avoid taxes by doing a 1031 exchange. 

If I sell, given the appreciation and what I have left on my mortgage, I think I should be able to make ~$100K (before 6% commission, 6K repairs, etc). 

What I want to do with my life? Be able to live off of passive income like so many of you have successfully done and spend time with family, continue Army life in reserves, and fishing :) 

Hi, I'm a newbie investor who's just discovered the awesome world of Biggerpockets. 

I currently have amazing tenants in Atlanta (for 8+ years), though after doing actual calculations of my cash on cash return (thanks to Bigger pockets), I realize that my cash flow is far too low (only netting ~$100/month). SO, I've decided to sell while the market is still relatively hot, though I'm finding that 1) I hate to lose these great tenants 2) I'd likely need to make some repairs to the home (~$6K worth) 3) Tenants have 3 kids in school 4) Would be willing to hold longer if I can improve cash flow 5) I wonder if I've missed the "hottest" selling month for Atlanta in May 

The tenant is interested in purchasing as well, though currently does not have enough down-payment for purchase. 

I've done some initial research, and it looks like I could:

1. Offer lease to own option: Though I would need to raise monthly rent at least $300 to ensure my cash flow is improved and am not sure how to factor in purchase price (for potential appreciation/depreciation)
2. Offer wrap mortgage? I still have $120K left on the mortgage, and this sounds complex
3. Just list and sell to another buyer? Seems like the "simplest" option (though costly in terms of realtor fees/repairs, etc)
4. Any other options?

A few facts:

1. Purchase price: ~$200K
2. Current Appraisal: ~$250K
3. Hope to sell Range: $245-280K
4. Mortgage left: ~$120,000
5. Currently on month-to-month lease

BP Pros, what would you do? My main goal is to improve cash flow/get at least some money to use towards down payment on other properties, though I would love the chance to help out these young tenants as well. 

Please let me know asap as I need to act quickly :)