All Forum Posts by: Lawrence Potts

Hello

Is it a good idea to use HELOC from existing duplex whose equity is 500k ,to purchase a 4 plex worth 1.5 mil and househack? Appreciate your inputs.

Thanks

Me and my girlfriend (probably wife by that point) are planning a move to Denver most likely in early 2025 and are interested in house hacking as a means to save income and build a rental portfolio. I'd like to have some sort of target down payment/price to have in mind while we save $$$. Our combined income would be about 200k if that helps (obviously who knows where interest rates will be by then as well). I guess a handful of questions for those that know the area:

- What are areas that would be attractive for 20 somethings like us to live that could also make sense numbers wise.

- Are there a lot of duplexes typically for sale or are most people house hacking with ADU's, basements, other strategies.

- What would be the ideal loan type? Is an FHA best in this type of situation?

- Coming from Southern CA I'm no stranger to high prices but how does Denver compare?

Thanks in advance!

Hello!

I have just finished remodeling my downstairs into a rental unit. I want to full furnish it for mid-short term rentals. How can I write that off? If possible. Thanks!

Hi Everyone,

I am looking into house hacking and I am hoping to get some advice. I want to give you guys all the facts first in order to get the best possible advice. My girlfriend and I are currently hoping to save $40-$50k in the next 12-15 months in order to start our real estate investing journeys. I am an accounting manager and she is a internal auditor, together we make ~$145k/year. We currently own a single-wide mobile home on an acre and a quarter of land and pay $850/mo in mortgage. We are looking to do an FHA or conventional 5% down loan in order to start our first house hack with a triplex or a quadplex, while hopefully renovating the property to add some value. The goal is to do this once a year, while continuously saving $40-$50k each year to have 1-2 deals done each year moving forward. Do you guys think I need to save that much each year? What advice would you give someone in our situation?

Additional info, I currently have $6k in consumer debt that I am thinking will be cleaned up in the next month. 

I am very excited to get some advice from this community and I hope to start our real estate investing journey very soon! 

Investment Info:

Single-family residence buy & hold investment in Las Vegas.

Purchase price: $426,000
Cash invested: $22,000

4th House Hack in Las Vegas

What made you interested in investing in this type of deal?

Add an additional room to increase cashflow on Househacking strategy. Great neighborhood next to school and wanted SW area.

How did you find this deal and how did you negotiate it?

MLS through Zillow/ Agent. Buyer's market to negotiate down under asking + seller credit included.

How did you finance this deal?

Own equity with the VA 5% down payment.

How did you add value to the deal?

Projects Phases:
I) Convert Loft to Room
II) Convert backyard to more modern landscaping
III) Install Water softener
V) Stainless Steel Appliances
VI) Convert to all LVP

What was the outcome?

Initial asking was $445,000. I was able to negotiate to $435,000+9k seller credit. Overall purchase summed up to be $426,000. Original interest rate at escrow was 6%. Decided to buy down to 5.5% with $3500 of my own equity. Cash flow still works, but would like to refinance to lower rate possibly.

Lessons learned? Challenges?

If the seller accepts the 1st initial offer, then I probably could have negotiated lower with better terms. Interest rates were the highest I have ever seen in my career at 6%. Was able to buy down to 5.5%. Still, numbers still worked to my favor will be able to househack and cover the entire mortgage to the property.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, I used the same real estate/ property manager/ investor friendly agent to coordinate this transaction as my previous investments.

I have always been interested in real estate and grew up watching my grandparents managing multiple rentals. I am not planning their exact path but something like it. Real estate has always intrigued me and feel like there is so much that can be accomplished with investing in a project, making it something, and then seeing the return for it. I have no experience in real estate or investing which means I know I have a lot to learn and multiple podcasts to watch before I can get going. I want to make sure I learn everything I can so that I make the best decisions possible throughout the process. I have worked most of my life as an administrative assistant and going to college for my associates in business administration which gives me the administrative background to be able to succeed in real estate. I am actually in Whatcom County so I would want to stay around here or even Skagit County. My goal is to invest in places that I can turn into short term vacation rentals, in a hotel, and eventually invest in rental storage units.  I am literally starting from the bottom of all of this and figuring out my steps so please, any advice, coaching, and support is very much welcomed! 

Hello everyone, I am a new investor who purchased my first rental property a year before this post. I purchased a upstairs/downstairs duplex for $125k. I rented out the upstairs for $800 a month, and occupy the downstairs. Since I have owned the property I have put a new roof on it ($18k), all new stainless steel appliances ($3k) and new landscaping ($2k) the driveway is suppose to be done for ($1.5k) here next month. That is about 25k in upgrades, and increased rents about 30 percent from previous owner. SO my question is, WHAT IS THE BEST EXIT STRATEGY. From reading the guidelines I see that I need 20-25% equity to refi. Which means it needs to appraise for 35k higher than I had just bought it for. How feasible is that? Should I refinance into a conventional loan OR should I refinance into a investment loan such as DSCR. Also when I go buy the second property, will FHA let me do a new loan with it being my 2nd mortgage... If anyone has input on this let me know, I am going to get ready to start the process but if you have experience in a similar situation I'd LOVE to hear it.

Thank you so much @Lawrence Potts for the great insight. Do you mind if I ask what is a "self-sufficiency test"? 
I will be sure to reach out to @Grant Schroeder for info about lenders in the San Antonio market. 

Thanks!

Hello pros.  Im a new pro member and I need some advice in order to start to be a real estate investor.  I bought a 2 bed 2.5 bath townhouse in 2018 when I was still single and now that I have a growing family with my partner and babies we have been watching bigger pockets vlogs and it inspired us to try to live out of our comfort zone.  I have a job that is enough to cover our mortgage and basics but we want to try house hacking or even short term rental.  The challenges to that right now is that there are limited multi family units in a decent location that ranges from 750-950k. We dont have 5% downpayment. We have not even applied for preapproval yet but we’re just brainstorming.  We’re thinking of selling this townhome to use the equity for a downpayment to move into a bigger home with adu or multifamily unit.  We are just unsure if now is the right time for that.  We are grateful just to get some ideas from the pros especially those pros in the local area. 

Hi all, I have a spare bedroom in the house that I live in. I first rented it out on airbnb. Had a few guests stay and then a possible guest said that she was relocating from germany to new jersey and was interested in renting through airbnb for a month while she was looking for a job and an apartment. She moved in Oct 2, 2022 and then after about 3 weeks she said that she wanted to rent the room for a few months, I said yes and we agreed on the rent thinking that it would be for a few months. She found a job but then she told me she was not working there anymore. 

Fast forward it is 7 months and she is still here paying rent on the 1st. I told her that I would like to fix up the room and rent it out again on airbnb. I don't know how to handle this issue. The good thing about airbnb is that on the listing I can turn the availability on and off when I get sick of sharing my house with strangers.

Any thoughts?