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All Forum Posts by: Lawrence Dy

Lawrence Dy has started 0 posts and replied 40 times.

Post: First time home buyers looking to house hack?

Lawrence DyPosted
  • Real Estate Agent
  • San Diego, CA
  • Posts 41
  • Votes 30

Hi Tom, you'll want to consult with a strong lender/mortgage broker in your area that can evaluate your loan and financing options. Sounds like you are interested in being what's called a "non-occupant co-borrower". There's also the option of "gifting" funds to your son for their purchase in which case there can be parameters around doing so, such as a certain amount of days for the funds to season. A good lender will be able to walk you through all your options. Best of luck!

Post: converting 4plex to 5 units, what does this change

Lawrence DyPosted
  • Real Estate Agent
  • San Diego, CA
  • Posts 41
  • Votes 30

Hi Trevor, you may want to be mindful of your overall investment strategy because once you convert to 5 units, your financing options may change. Also, the property's salability/liquidity may change as well since it will probably no longer qualify for residential lending (4 units or less). Typically, adding an extra unit is an advantage, but you'll have to do a thorough analysis of the numbers as well as the market for 5 unit properties if you have any intent on selling in the future. When crunching the numbers, you may want to explore alternative value add strategies that may be a better allocation of resources depending on your market and property makeup (i.e. adding bedrooms, adding garages, other capital improvements, etc.) 

Hope this helps!

Post: New tenant paying low rent wants a garage door opener

Lawrence DyPosted
  • Real Estate Agent
  • San Diego, CA
  • Posts 41
  • Votes 30

@Ryan Cleary I agree completely with @John Underwood

His exact phrasing could actually be used to address a multitude of tenant issues. 

Post: How to buy your first duplex in San Diego, CA with FHA loan!

Lawrence DyPosted
  • Real Estate Agent
  • San Diego, CA
  • Posts 41
  • Votes 30

@Stelios Andong 

Yes, it is common to see negative cash flow on a house hack when purchasing with FHA, 3.5% down payment, but that doesn't make it a bad investment. The key to minimizing the negative cash flow for an FHA house hack is to identify properties with unlocked potential or are undervalued in some aspect. This will typically require some work on your part to add value and unlock this potential (i.e. renovations, additions, exploring more profitable rental strategies, etc.)

Don't be deterred by the short term negative cash flow and be mindful of the long-term potential and your long-term investment strategy. With some work and planning, you can eventually create appreciation and refi out of your FHA loan to eventually achieve better cash flow. One of my clients, who I helped purchase a duplex with FHA just last year, is already in the process of refinancing to a conventional loan as we speak. So it is very possible.

Hope this helps!

Post: House With Foundation Issues

Lawrence DyPosted
  • Real Estate Agent
  • San Diego, CA
  • Posts 41
  • Votes 30

Here in California we see foundation issues all the time, especially because of earthquakes and soil movement. I agree with @Will Fraser that it's not necessarily a reason panic; however, it does mean you may want to exert extra effort in your due diligence in all facets of the foundation and previous repair. You'll really want to examine the warranty from the previous company and any aspects that may void the warranty. You'll want to examine the details of the previous work completed and the issues that were addressed. Also, you may want to have an actual structural engineer or soils engineer examine areas of concern depending on the scope of work from the last repair. These can be costly inspections so you'll also want to make sure that the deal is strong enough to want to inherit these potential risks and costs. 

Post: Best way to increase rent by $300 per month & keep tenant?

Lawrence DyPosted
  • Real Estate Agent
  • San Diego, CA
  • Posts 41
  • Votes 30

I agree with the above recommendations. If you are confident you have a superior property and are still below market rents even after increasing, you should just go for it. I always like to add a human element to it and have a candid conversation with the tenant why you are raising their rent and how they are still getting a good deal. I know others may disagree with this approach, but I find that it can help maintain goodwill when done correctly. If they can't afford it, they'll leave and then you can raise rents to market rates. If they can afford it and stay, they'll appreciate your conversation with them. Best of luck!

Post: Can I pay with a mortgage instead of cash?

Lawrence DyPosted
  • Real Estate Agent
  • San Diego, CA
  • Posts 41
  • Votes 30

I completely agree with @Joseph A Gonzales, just keep submitting offers. It's all a numbers game. If you don't currently have the funds ready to offer all cash, don't wait. Just offer according to your financial capabilities. You may be surprised to find out that the cash offers don't always win. Just be aggressive and creative when offering and just keep submitting offers until you get accepted. Best of luck!

Post: How much profit makes a Flip worth it

Lawrence DyPosted
  • Real Estate Agent
  • San Diego, CA
  • Posts 41
  • Votes 30

Hi Nicolas, from what I understand from your post you stated that you will not have any financial risk in this deal other than your time and effort due to OPM, correct? I would assess this deal not just on the financial side for you, but also on the relationships and experience you may gain from this. If you feel like there is experience to gain that adds value to you on top of the money, I think this is definitely worth it assuming you have the time/energy/availability to do it. Also, if these investor partners have (or will have) future deals that can equate to even larger opportunities in the future, it may be worth pursuing just to strengthen that relationship.

Another thing to consider is opportunity cost. Do you have other opportunities coming up that would require your time/effort that would be stronger than this opportunity? If so, you may want to pass on this to free yourself up for something bigger. 

Just my 2 cents. Hope this helps!

Post: Incoming dental student - hopeful investor

Lawrence DyPosted
  • Real Estate Agent
  • San Diego, CA
  • Posts 41
  • Votes 30

Hi Ethan, I actually have a friend that did something similar while going to school at the Mayo clinic and it worked out well for him. It sounds like you have a lot of great resources around you to help you make a smart decision locally. 

I think all the advice that @Grace Wang was very solid and I would just add that you just really make sure to really do your homework and evaluate all worst-case scenarios before making the leap since you are still a student. As they say "protect the downside and the upside will take care of itself." 

Also, if you intend to rent rooms to friends and classmates, you may want to start networking and accumulating potential roommates prior to closing so you can hit the ground running. This will also give you an opportunity to see how much they would be willing to pay in rent so you can better do your calculations. Best of luck!

Post: Newbie from San Diego, looking to invest in Las Vegas/Yuma, AZ

Lawrence DyPosted
  • Real Estate Agent
  • San Diego, CA
  • Posts 41
  • Votes 30

Hi Daniel, I would actually encourage you to explore the idea of househacking a 2-4 unit property here in San Diego. You can look into the possibility of refinancing out of your current VA loan to conventional, renting out your current condo, and buying a 2-4 unit property with VA. Alternatively, if DTI is an issue for you to keep your property and purchase another, you can explore the idea of selling your condo to purchase a 2-4 unit property to househack. You probably have some appreciation on your condo and you can use the net proceeds to renovate/improve the 2-4 unit property that you househack. Also, there are usually some nice 2-4 opportunities that arise in North County where you are if you prefer to stay in the area.

You just really need to sit down and crunch the numbers on all the scenarios to see what makes the most sense for you. You'll also want to think long term and decide which strategy will help you accomplish your long term financial goals. Happy to help if you want to chat about all this in more detail.