All Forum Posts by: Matt K.

For my HELOC with Fremont bank there was no way to increase it other then closing it out and reapplying.

You're going to spend more money attempting to fight this then you're actually out.

The seller HAD a problem, it was fixed. No one going to pay for your cost to verify it was fixed... And you can't put a real dollar amount on the "tension" between you and the tenants. Lastly the high water bill is from the toilets, more so then the leak...and there's way to get that amount reduced once you show the repair....

Your time money and  energy fighting this could be better spent on something of value...

One thing to consider is what you want out of your standard of living...because you'd be living in one of the units. 

Generically speaking a duplex is going to feel more like a home .... potentially be a bit bigger living as well and more chance of private outdoor space.

The 4 plex is more likely to be an old Victorian split up...and some units could have a funky/cramped layout. The outdoor space is more likely to be taken up by off street parking.

You will likely want some funds set aside for repairs...deffered maintenance, old appliances, questionable previous construction....

I do love Alameda, lived there for a bit and some of the well done Victorians are amazing. You'll also have good tenant pool with the Coast Guard base over there... 

To the causal observer I think the biggest hurdle you're going to have selling or renting is demonstrating the value of the extra sqft.

I'm familiar with the area and probably the complex based on the description... and even though a studio vs 1 bd is quite obvious in person ... It might be hard to communicate that extra space in an ad.

Oakland has made it tough on landlords and they aren't viewed in the best of light no matter how well the property is managed. However it's not impossible, but screening is more important then ever and can still be done with in the boundaries of Oakland's unique requirements...

I tossed around the idea of doing this same thing.... wasn't worth the risk to pull the trigger and dump everything into something here in the bay.

Instead, I went and converted on my long term rentals in the Midwest to a STR. Still going through an extensive rehab (my choice) should be online next month. I was at a low price point so even if this fails as a STR I can transition back to LTR and be ok.

I avoided the traditional vacation markets simply because in my opinion they're oversaturated and too much competition. Much of wich has a much lower price point then me so if a race to the bottom occurs, I'm the first to lose since I'd likely of bought way higher.

That did pose a challenge though, it was MUCH harder to get a property manager specifically for STR market. I eventually found one, but I'm picky and prefer to self manage even out of state...just not possible with a str

If it's really a good deal, in theory you could still make something on it for passing it along to someone that can close it...

i don't personally run a lot of money through my network, but my referrals do. This allows me to stay ahead of things and continue to find opportunities but at same time pause till the finances are in order...

Quote from @Tyler Jorgensen:

Quote from @Matt K.:

Quote from @Erik Browning:

@Tyler Jorgensen this is exceptional. Active duty and veterans have a unique benefit of having the VA loan. The reason is, you can utilize what is called your "split entitlement."

What that means is that you can use up part of your VA loan entitlement, depart from that residence, and use up the remaining entitlement on a second home. Yes, you can have multiple VA loans as long as you meet the guideline requirements.

Active duty and veteran folks use the strategy to help build their portfolio while leveraging the 0% down ability. This strategy, coupled with conventional investing products (DSCR, private funding, etc), is a great way to start with little money and proving your ability to landlord.

The only thing about this is...it can be hard to get a VA loan accepted in a competitive market for various reasons some of which can be overcame but the hardest one is they are much more picky about the condition of the property.

Most properties that'd qualify for a VA loan would probably have a hard time cash flowing anything and potentially impact borrowing potential at next duty station...

By no means am I saying it won't work or can't work, but 1-2 years is likely a short timeline for a VA loan to make sense.

USDA rural property loan is another 0% down option that could also be used to compare against a VA loan if the property fits (I don't know the requirements off top of my head)

FHA 203k should also be considered, more flexibility... And still lower down payment.

But again, these type of loans while positive for the buyer carry extra risk and burden on the seller which needs to be considered when making an offer.

 I might need to clarify then. I have a few years left and I already have a home now. I am looking to see what I can do in two years time to prepare for the next step in my life. I want to be able to buy another house when I PCS in two years. I'm looking for productive suggestions for the next 2 years since I can't be buying anything now.

Figure out a plan to maximize the asset you already have... 
You could....
rent it out...by room even if there's a bunch of geo bachelors and it's near base

borrow against it, probably a HELOC as a cash out refi would likely have worse rates then what you already have....

sell it, look up 121 exclusion that's worth up to 250k single/500k married in tax free gains... That's for primary, there's also a 1031 if it was/is a rental....

you could also improve it to help with the rent or sale....

2 years is a short time frame but also long at the same time...you have a ton of options, fine tune your goal(s), make it SMART (Google the acronym if needed), and then fine tune the next moves that take advantage of what you have and what you want.

Theres a million things that work and don't work, the list gets smaller and smaller the more specific you can be....and then the plan comes together and stands out above the noise.

Quote from @Erik Browning:

@Tyler Jorgensen this is exceptional. Active duty and veterans have a unique benefit of having the VA loan. The reason is, you can utilize what is called your "split entitlement."

What that means is that you can use up part of your VA loan entitlement, depart from that residence, and use up the remaining entitlement on a second home. Yes, you can have multiple VA loans as long as you meet the guideline requirements.

Active duty and veteran folks use the strategy to help build their portfolio while leveraging the 0% down ability. This strategy, coupled with conventional investing products (DSCR, private funding, etc), is a great way to start with little money and proving your ability to landlord.

The only thing about this is...it can be hard to get a VA loan accepted in a competitive market for various reasons some of which can be overcame but the hardest one is they are much more picky about the condition of the property.

Most properties that'd qualify for a VA loan would probably have a hard time cash flowing anything and potentially impact borrowing potential at next duty station...

By no means am I saying it won't work or can't work, but 1-2 years is likely a short timeline for a VA loan to make sense.

USDA rural property loan is another 0% down option that could also be used to compare against a VA loan if the property fits (I don't know the requirements off top of my head)

FHA 203k should also be considered, more flexibility... And still lower down payment.

But again, these type of loans while positive for the buyer carry extra risk and burden on the seller which needs to be considered when making an offer.

Quote from @Erick De casas:

Hey everyone! My name is Erick De Casas and like a lot of you (or all of you) i plan on investing in Real Estate in the future. Im in the California Bay Area but will most likely buy out of state to start. My goal is to do a few BRRRR's and a few short term rentals. Ive set a goal of spending 5 hours a week as of now to study different markets and analyze deals. I'm definitely looking to finding a mentor in my area. Im an electrician at the moment with 11 years of experience and I have a lot of friends in different trades, if you ever need help with anything electrical and don't mind showing me how you analyze deals id love to help! Thanks for all the value you all bring.

Erick

 I'll teach you everything thing I've learned if you help me update my ugly can lights lol

But on a more serious note, you got a huge advantage being in a trade and friends of others in different trades. The money side of stuff is different, but not that much different. You will have a better ability to see problems and fixes then most...and that'd give you an edge over a lot of your competition.

I would look at it differently....

Paint, look at it by room or similar...a 1bd/1ba going to be about the same cost, because they are all about the same size... Same with 2bd and 3bd etc...I wouldn't go down to a sqft for this rather a ballpark based on bed/bath count....

Flooring, definitely use price per sqft. 10bucks a sqft is healthy estimate that would leave you a ton of options and cover install /prep. If you did it yourself you could cut that down to half or lower...

Kitchens, get a base idea...those can go a million different directions, but most probably need appliances and countertops which are simple enough to estimate.

Bathrooms, same thing...paint and floor go long ways...maybe update lighting and hardware... inexpensive and way less then a new bathroom.

Misc stuff like blinds/lights...just know what that stuff should cost and then ball park it...

Most stuff on MLS needs simple updates like mentioned above to get it rent ready vs a full on rehab....

Then if you can get an offer accepted you can fine tune it once you get a counter, again once you get it accepted and inspection done... That's where the magic happens, because then you can really take the time to dial in the numbers.