All Forum Posts by: Michael K Gallagher

@Jason M. I'm having a similar debate and doing a similar analysis surrounding my wife's student loan debt. We had a pretty decent plan to pay it all off in the next 6 years, but I've been looking at accelerating that through some IRA money I have and can access under the CARES act. Similar debate in that is it better to pay off debt or invest and grow....for me I ran a couple scenarios and decided I'm going to pay off the debt. While in the short term it slightly diminishes my reserves and savings it also allows me to double my savings over the next two years after the student loans are gone. Some of those loans are similar to yours at 9%+.

I'd recommend the same thing to you especially going into an economy like we are.  I'd take smaller savings and reserves in return for no or very little debt.  That situation really gives you much more flexibility in tough times.   

I'd also encourage you to look at house hacking a duplex or other type of property if you have not already.  As an owner occupant getting into a house hack as your first income property is a huge plus!  and the options for financing are pretty endless.  We've been doing it the past two years and its been the best decision we ever made!

cheers!   

@Brittney WIlliams This is very concerning.....did they sight or give you any documentation on what these "new laws" are?  Curious if they are specific to that lender or if they are across the board?  

@Steven DAmbra If I understand correctly you are looking to purchase a property?  in other words you are the buyer?  Then in that case I'll just echo what has been said on here...that the cost of the agents for both buyers and sellers is taken out of the profits from the listing side.  So while there is no "direct cost" to you, I do think I understand where you are going that if only half the commission was involved theoretically your purchase price as the buyer could be lower, and the seller would walk away with the same amount of profit, and you pay less in the purchase price....again if I'm following your thought process correctly?  

So....in that case, again as I understand it, the only way to remove the agent costs would be to do an off market deal.  So perhaps get on a wholesaler buyer's list in the area you are looking for?  Or try to reach out to some flippers in that area, in my experience with flippers they are always looking for ways to increase their margins so its possible you could go to them and say you'd like to just deal with them directly...its quite likely they already have a relationship with an agent, but if you are coming to them without an agent I'm sure they'd be happy to cut the selling price to compensate...and it might give you a leg up on other buyers for the same property. 

However, as a couple others have mentioned on here, doing this out of state, where you don't have anyone "on the ground" does get a bit trickier, while not impossible, will just require much more work and due diligence on your end...so it just becomes a question of how much is your personal time worth.  

But good luck with however you decide to do it!  Hope you land a fantastic property!  

Hey @Shawn Phillips, I don't have a statistically calculated number, my agent @Rene Lanthron who found the duplex for me probably could be more helpful in that area if you are looking for actual data points, comps and statistical trends.

However, we watch the market pretty closely, and we are seeing some properties listed currently that are pushing the price per square foot way up!  Now if they sell for the list price or not we are yet to see... but just as an example, my duplex works out to just about $131/sf and their are several houses in the area that are trying to push the $165-$190 per sf mark.  Now these are single family's, so the appraisal is a bit different as I understand it.  But it does give some pretty substantial data and ammunition when going through an appraisal.

My speculation is because areas like Olde Town East, Bexley, and Franklin Park that immediately boarder the South of Main area are also appreciating quite rapidly, so we are getting that "trendy/hipster adjacent" push.  But it isn't so high yet that its unattainable price wise.  So its a pretty sweet little section of the east side of Columbus. 

1 random though regarding FHA... just be upfront with your lender about doing FHA and wanting to do a multi family, there were some pretty crazy hick-ups we came across with the underwriting and the zoning from the city and how its changed in these areas since the houses were built. So just know that FHA is a couple more hoops to jump through but if you stay on top of things and keep open communication with your lender they shouldn't derail things too much. And obviously every underwriter is different...so you might also just get a better more reasonable underwriter than I had...which I hope you do. but feel free to reach out if you want to talk more specifics or have any specific questions about the area/process.

Cheers!
  

@Shawn Phillips I'm currently doing an FHA Duplex house hack in Columbus OH. We are in South Of Main, bought it completely flipped and redone for $318K, we get $1250 rent for the other side, so my "share", if you want to call it that, of the mortgage is $650 a month, even with a $200 a month PMI, this still made my cost of living way less than the $1350 mortgage I was paying out in the burbs. So my point is, don't be put off by the PMI, if the numbers work for your situation go for it. You can always refi out to conventional later on.

We got an appraisal of $340K a year later, which was November 2019. So roughly a 7% appreciation in a year...seemed pretty decent to me.   

And another huge plus for Cbus at the moment is that most areas just outside of downtown that are "up and coming" are coming with 10 year full tax abatements...so we are talking like $900, maybe less, a year in property taxes.  So for me that again was a huge selling point as I was paying almost $4K a year in Dublin.    

looks amazing!. congrats on the house hack!

@Andre Fierro There's no use playing the "what if game" or the "BCD" game.  Somewhere in this experience you learned something, and will implement things to not let it happen again.  Concentrate on those learnings and best practices you picked up to get you through the frustration.   

As far as realtors I'll send you some info via PM as they don't let you post links in the forums.  But the Realtors name is Ray Brown, he is very investor friendly as he used to do condo development here in Columbus before re-locating down to FL.  He's done a couple live in flips, and town house developments so  I'm sure he'd be a good resource for you in FL.  

Hope you get that first deal sooner rather than later!

@Matthew Cassidy we bought it previously flipped, we were on a very tight timeline having already been in contract on our main residence... but from my understanding the 203K is a nice option for rehabs.  From what I know about them there are many more hurdles to jump through as a contractor and on the "approval" side of things, but the people who talk favorably about them usually mention that: "it's guaranteed money" for the contractor, so it tends to attract the best of the best from a quality standpoint but the work is a premium...again have never done it myself, just what I found when I was reading about them.   

@Matthew Cassidy When I went through my loan process with my duplex I was told that you have to put 20% down on a multi family to get conventional financing, you don't have an option for a 5% or lower down payment as an owner occupant unless its a Single Family. So we ended up going FHA. Now yes it's a higher monthly payment, and yes their will be PMI and the process is a bigger pain in the but, but FHA would let you only put 3.5% down, and would let you keep more cash for reserves and for repairs and improvements. And just my opinion, but especially in these times I'd rather have more cash handy if I can, only if the numbers make sense from a month to month standpoint though.
 

@Ryan Mainwaring congrats on the deal!  looks fantastic. We are in South of Main, just over 70 from from you, so very glad to see this happening in our backyard.  Do you have any idea of what you are trying to get for rent in the area?  I'm finding nicer fixed up properties in SOMA to be scarce so we are somewhat setting the rents ourselves at the moment. Would be curious to know what you are finding in your area.