All Forum Posts by: Khalid Haynes
Khalid Haynes has started 3 posts and replied 19 times.
Quote from @Hamp Lee III:
House hack using the Neighborhood Assistance Corporation of America (NACA) loan program.
NACA was formed in 1988 and provides an affordable option for potential first-time buyers:
✅ No down payment
✅ No closing costs or fees
✅ No mortgage insurance
✅ No consideration of credit score
✅ Below market fixed interest rate
There are several requirements to be eligible, starting with attending one of their workshops.
I wish you all the best.
This sounds interesting I'm going to look into this myself. I'm looking to house hack.
Post: Multifamily Upfront Reserves
- Posts 19
- Votes 11
I'm planning to buy multifam to house hack in the future. I'm curious about having upfront reserves ready. I want to mitigate risk by building a reserves cushion to have ready at the start of the investment and doing this will help me confidently scale.
I've been doing reading and like the idea of having 3-6 reserves saved upfront that would cover possible vacancy.
However, what about having Capex, maintenance repairs, renovation reserves (getting the home rent ready) reserves before buying upfront? Are investors really saving for these four factors all before buying? What are thoughts on creating a safety net before property one and then two?
Post: Why house hacking a 2-4 Unit Property is the best first investment
- Posts 19
- Votes 11
Hi thanks for the post. Could you take about reserves.. should you have reserves saved up before going into the house hack? I'm looking to do a multifamily house hack as I prefer to not live in the same unit as tenant.
Quote from @Rick Albert:
I don't see the value in paying it off early. How old are your kids? Maybe it makes sense to have it paid off by the time they are 18, 21, 30+?
You are better off putting the extra money towards additional properties. Through leverage, your buying power increases. If you can buy an extra 3-4 properties and have the tenants pay the mortgage, isn't that a better generational wealth transfer than giving them just one or two properties? This is especially true if you have careers that can support you. If you can have three properties getting you to the $1,000/month today, can you imagine what kind of cash flow it will be in 10, 15, or 30 years.
Through leverage and partnerships, I have a house with ADU, triplex, and fourplex. Over the next few months I plan on acquiring 1-3 more properties. Will they cash flow a lot today? Nope. But by the time I have kids and they are grown, we will be set for life. That leveraging power is why real estate creates so much wealth.
I'm not saying get into debt for the sake of it. I'm saying buy smart and use other people's money when possible.
And second one isn’t here yet. I do like the thought of having it paid off by 21 or even age 30 for them. I hear your point about maintaining buying power. I don’t want things to blow up in my face where tenants aren’t paying (even with good screening things could happen) so I have to think through solutions.
I’m in a space where I have to break through the fear mindset. What is the safety net like for you for those three properties? Did you have reserves saved up before buying each one? Did you save the reserves with your own money or was it a refinance or cash out (maybe from the first property) then use some of that as reserves for the second one? I’m wrapping my head around this atm.
Thanks this is helpful. I have to think about how to cover myself with owning more than one property at a time and being able to afford all things (mortgage, capex,repairs, vacancy, repair, renovations, etc). What If something goes wrong with all of the properties at once.
It’s kind of overwhelming the thought of it but I understand the logic. I think I’ll have to do a deep dive on cash reserves. I see your point of how paying off one is essentially putting all eggs in one basket. @Kevin So
@Kevin Sobiloundefined
Quote from @Ben Trageser:
@Khalid Haynes as someone in the NJ area, it is very hard to find something that cashflows greatly. If you do, there will be a lot of interest. DM me if you are interested in talking about towns and reccomendations. Happy to help in any way I can
Quote from @Account Closed:
Quote from @Khalid Haynes:
Quote from @Account Closed:
Realistically, it is highly unlike you will find your first deal cash flowing $12,000 annually. I don't fully know your financial goals/situation, but paying off a home in 10 years has few benefits when you think of the other REI opportunities you could pursue with those funds. All your negative cash flow will be upfront at once, when you could space it out over years and still walk away with cash flow every month. At only 28, you have plenty of time to pay these mortgages and still leave them for your children. Paying off mortgages is more of an exit plan for an REI's portfolio, just my opinion.
The biggest risk you cited above in this forum was vacancy, which is still a possibility if the home is paid off. All the risks of renting to tenants still exist whether your down payment is 5, 10, 20, 50, 100%.
Quote from @Ryan Thomson:
@Khalid Haynes if your goal is scaling and growing your net worth I may suggest that paying off the properties first will significantly slow down your ability to scale.
I've scaled to 5 house hacks in 5 years in Colorado Springs. If I had tried to pay off the first one I would still be sitting at one home.
I like the goals, but the path to get there may be easier reached by not focusing on paying ofthe mortgage more quickly. Paying off the mortgage quickly also really hurts your ROI and your ROE.
Fair enough how does it work if there’s ever a period when a tenant is not able to pay rent how to do you cover yourself? Maybe i I get a better understanding of that my mindset will shift.
Quote from @Account Closed:
Realistically, it is highly unlike you will find your first deal cash flowing $12,000 annually. I don't fully know your financial goals/situation, but paying off a home in 10 years has few benefits when you think of the other REI opportunities you could pursue with those funds. All your negative cash flow will be upfront at once, when you could space it out over years and still walk away with cash flow every month. At only 28, you have plenty of time to pay these mortgages and still leave them for your children. Paying off mortgages is more of an exit plan for an REI's portfolio, just my opinion.
Quote from @Jaron Walling:
@Khalid Haynes Life is not predictable like you described.
The majority of investors will tell you to aim for a "target" and keep shooting at it. You're going to miss a few times but keep inching forward. This is why you buy real estate and wait. Don't wait to buy real estate. You also said you want to buy in 3-4 years... why? Do everything you can today to shorten that time frame. Go all "Dave Ramsey beans and rice" or something similar your family can handle. The longer you wait the more opportunities pass you by. You'll buy a leased out duplex because a FSBO sign in yard catches your eye. You'll sell something when the value and increased and rents have not. You'll become a landlord and hate it.
Life is full of surprises just like investing.