All Forum Posts by: Michael K Gallagher

If you are not into house hacking, or doing a multi unit where you live in one unit and rent the rest, then I would second what @Mark Sewell has suggested.  Look for a property for yourself, but look for it through the eyes of it being a rental one day.  So maybe look for one that isn't re-done yet that you can get for cheap and remodel slowly over a couple years to better suit what you'd want it to be as a rental.  Things like a double master, or two rooms with en-suites would be huge draws once you rent it out.  Parking is another big one I look for, making sure their is ample off street parking, even if there is no garage, that again can always be added.  Doing it this way is fantastic because if you can see past some ugly finishes, you may even just be able to sell it in 2 years for a nice tax free profit to go move on and do some more investing.  Or obviously cash out refis are always an option that is great with forced appreciation.  

Personally I love looking at houses even flipped ones that have been on the market a while....obviously if they are a flipper they could be getting desperate to get out from under it, and if you make an offer that works for your needs, even if its way under asking you never know they may take it.

good luck!

@Brandon Phillips congrats!  I'm in a similar situation with my duplex that I'm hacking at the moment.  I have a couple limitations in that last year I decided to start my own consulting company so my wife's income is the only income that counts for us at the moment, oh and the rental income obviously.  So our current strategy is pretty specific.  We are looking for a single family home, so that we can get an owner occupied loan with 5% down.  We have a very specific area of town that we are looking in where we know a huge corporate headquarters is currently being built.  So our strategy is find a SF that we'd like to live in for about 2 years, rent both sides of our duplex, and then hopefully the single family we find either already has a double master, or buy one that we could add a double master.  That way when the headquarters is complete in 2022 we will be in a position to rent that out hopefully to some young professionals and get a premium for it since it is designed to be roommate friendly.  

I've had a couple more Duplexes come my way but the financing is really the sticking point for me at the moment.  I will probably end up leveraging the equity in both this and our next property however for the third one.  Probably not the fastest strategy for growth but it works for our personal goals.   

@Timothy Chi This is obviously something to probably confirm with your Lender, but from my experience doing an FHA loan, as long as you were not planning to short term rent the place out, you should be fine. The only issue I've had is that now I have an FHA loan I cannot get another FHA loan, without refinancing it to conventional first. But as far as traveling for work I don't think you would have any issue. It sounds like on paper that would be your residence, and that's all that matters.

@Chris Lounsbury I like the idea of a Tennant orientation letter.  I'm doing a more informal orientation but I like the idea of a property manual or something of the sorts.  

My longest time to close was our current duplex, nothing even close to what you are talking about but probably about 75 days from contract to close on and FHA loan. The major issue was that the first lender we used had an underwriter that saw the time from previously closed (aka when the flipper bought it) to the time we were purchasing it, and ordered two inspections because apparently that is a rule on the FHA side when dealing with properties that have changed hands in under a certain amount of time. Well the second inspection found two ridiculously small issues, one being the water heater didn't have whatever that drain pipe is on it on the overflow valve...but basically a 15 dollar part at home depot if that. And thought there was something wrong with the back steps even though they were cast concrete. So managed to get all that settled and then the underwriter still wouldn't close the deal because the zoning in this area has changed and the city could not guarantee that we would be able to rebuild "exactly the same" in a case of a total loss....the city was very reasonable and said there is a process in place but that they couldn't guarantee that the process would still be in place in the future...totally logical from my standpoint.

So we finally had to change lenders on about day 60, and their underwriter took a look at all our information and said that the timeline that triggered the 2nd inspection was in fact outside the time to require that second inspection.  Because there was a 3-4 day delay from when we submitted the contract to when the seller signed the contract thats the real date they needed and that fell just outside the window.  So they got it closed in 10 days lol!

Totally crazy but totally worth it.     

@Adrian Adams Welcome! I live/have a house hack in the South of Main area.  If you have any specific questions about the area or what its like on the ground here I'm happy to offer any insights.  @Zeke Liston already posted too, but he's also a great reference for the SoMa area.

Cheers!  

@Zach Hall interesting question....My wife and I recently came up with and started to implement a plan to aggressively pay down our debt, aka her student loans, so that come Q1 2021 we would be entirely debt free other than our current duplex we are house hacking. However, I have recently learned, through not being able to jump on a deal that was brought to me, that my financial preparation is certainly lacking. So my slight shift I'd say is away from acquisitions at the moment, and over to preparation. I'm planning to have more specific conversations with people in my existing network that have expressed interest in REI, and see if there are any financial partnerships to be made there. I'm also looking to investigate any loan packages that are out there to allow me to do what I am trying to do with a personal portfolio. For me personally I find that I work better when searching for deals if I have a specific type of financing in mind that would fit that opportunity. Just makes me feel a little more comfortable with it from the beginning. So for the next 6-8 months my plan has shifted to debt pay down, and education surrounding finance options.

@Cordell M. I know this is an old post, but I am currently in the middle of the Pumpkin Plan and picked it up based on your above post.  So far I love it!  I'm actually looking at it mostly through the eye of my consulting business...and how to grow that.  So far all I can keep thinking is that my clients that I work with need to read this book...they certainly fall into the trap of "sell to anyone" and "any client is a good client" they are a CBD skin care company and have spread themselves super thin between Ecomm sales, wholesale customers, and then within wholesale they have umpteen clients from Ulta all the way down to a local face mask bar.  

Really loving the focus and discipline it provides and I'm really looking forward to trying to implement the pumpkin plan not only in my business but in my client's businesses as well.

Cheers, 

Michael

@Mikael Winkler We have not seen any issue with tenants paying...luckily both our tenants work in medical and are considered essential, so again we managed to be fairly insulated from that issue.  

I don't see a substantial "crash" happening in my area of Columbus OH for a couple of reasons.  1) We are not an expensive market to begin with.  Therefore the cost of housing is not as large of a percentage of people's income as in say SF or NYC.  2) We are a huge manufacturing and logistics hub.  So while some industries like food/dining/Auto might see a short term draw back, other industries like logistics, data centers, higher education perhaps will be there to expand and pick up the slack.  3) As an investor with a property that rents for about or under average for the area, while I might see a little bit of turnover due to people's changing circumstances here in the coming months, I expect we will see what we did back in 08 and that people who go into foreclosure will still need a place to live and will turn to renting at about my rent level. 

So my opinion is that yes I can see there being a draw back, but I think it will be localized to several specific markets, most likely the coasts where we are already seeing a negative population growth.  But I also echo what many others on here have said, trying to time the market is a gamblers game.  If its a good deal you should be doing the numbers to account for situations like this, and therefore it's a good deal in any market.