All Forum Posts by: Mike S.

@Weston Harding Thanks for the reply!! 

I did very little to my current place (minor structural issue in the attic repaired/certified by a structural engineer after purchase), but would definitely be willing to do some cosmetic rehab on the next one. 

I'll connect with @Michael Facchini regarding financing, but I'm glad to hear you think it's possible. 

Hi Dave, 

The one rented unit is renting for $2200/month right now and mine should do the same once I move out. The low interest rate and no PMI on the VA loan definitely helps.

Hi everyone!

I'm about 7 months into my first house hack in Chicago and it's going great! It's only a duplex, so I'm not quite living for free, but I will cash flow about $250/door once I move and rent out my unit. I'm obviously excited about how well this went and was hoping to continue buying a new house hack every year, while holding and renting the others. 

My big issue now is financing! I bought my current duplex for $600k and I am starting to really get to know the area. I was hoping to continue to buy properties at that price point or higher, but I'm not sure that will be possible without a large (~25%) down payment. I bought the current property with a VA loan and about 7.5% down. Unless I sell that, I can't use the VA loan again, so the other low-down-payment option I considered was FHA. I didn't realize until recently that FHA loans in my area are capped at $565k for a 3-unit and $703k for a 4-unit. Unless I move out of the city or to a more dangerous area, it will be extremely hard to find a property for those prices (especially one that meets FHA standards).

I'm starting to call local banks in search of portfolio loans, since I've heard rumors of local bank loans with 5% or 10% down and no PMI. I'd like to keep my down payment to $50k or less, but might be able to swing $80k with contributions from friends/family. I'm currently looking at properties in the $500k - $850k range, but those at the lower end wouldn't qualify for FHA (maybe a 203k). With the current property still at about 92% LTV, I'm worried that trying to essentially double my debt will scare off most lenders.

I know there are a ton of people in the BP community who built their real estate businesses like this. How did you make the jump from your first house hack to your second? Any tips on getting low-down-payment financing? Am I being unreasonable trying to stay at or above the $600k price point? I would hate to have to slow my momentum just to fund a down payment. 

Thanks for the help!

Mike

Thanks so much for the help, everyone! I'm little surprised by the unanimously positive feedback. Is there anything you would completely stay away from in Detroit right now? 

Also, we have a couple friends who live out there, but no one we could use for property management. Have any of you worked with property managers who stood out as better than others?

Thanks again!

Hi everyone!

I've listened to almost all of the podcasts and learned a ton from the site, which is why I get an uneasy feeling about my friend planning to invest in Detroit. He plans to buy single family homes for around 30k with cash, put up to 10k into rehabbing them and then thinks they'll rent for roughly $900/month. He said he's run the numbers and they will easily cash flow several hundred per month. He'll continue to live out of state and work with a property management company. Betting on appreciation is generally a bad idea, but if the properties are actually cash flowing, is there another reason to stay away? 

He and I both bought multi-family house hacks recently, so we're excited about continuing to invest, but I know there have been several pro tips about why doing this exact strategy can cause problems. Any advice I can pass along to him would be great. Or if you think I should start working with him, I'd love to hear about that, too! 

Thanks, 

Mike