All Forum Posts by: Mimi H.

I'm agreeing with everyone here and I'll add a few more points:

• if you need us to validate your decision to quit your job, you're probably not there yet
• if people start asking you why you're still working when you're flush in cash, you're probably there

I don't know why this is the case, but I've found it to be true several times in my life.

One flip and $55k cushion is probably not enough to get you through 2 bad years, or maybe even one, especially if you are not flying solo. Let's face it, maybe you can live on ramen every night but you might not want to subject your significant other (and possibly kid(s)) to the same fate if you could avoid it. Don't forget about things that the employer may be taking care of now - health insurance, possible matching $401k - if your partner's employer doesn't have this, add another several hundred per month.

So simple math wise, $5k/month * 12 months => $60k, that's post tax btw. + possible health insurance.

One flip isn't enough to give a sense of the reliability of your contractor. What if he throws out his back? What's your B plan?

@Andrew Michael already brought up excellent points on financing @Jay DeCima makes a great point on finding a mentor, never underestimate the power of groups, no matter how small.

Do you see yourself flipping "full time"? If yes, do you think that this will make you happy? Are you looking to own a business or are you prepared for the business to own you? re: @Jeff Wallace's excellent point.

Minimally, prior to upping and leaving, it's worthwhile to consider why you're unhappy so you don't jump from a bad situation to a worse situation. I know that if the job sucks, it's tempting to jump but depending on your age and industry, it can be a challenge to get back in if you need to. You may want to play with cutting costs to see just how lean you + fam can live without driving each other nuts and plot out the escape route.

It's not that it can't be done. It can, I'd just say that you can also expect that it will be minimally 3x harder than your day job and 5x more frustrating until you can get into a rhythm. Unless you can throw tons of money at the problem, but if that's the case, you'd have a team of contractors and more leverage.

@Samantha Smalpage Foreign investors in the US market get a fairly large % of their earnings 'held back' for taxation. This is the case for foreign investors into any market. As an example, foreign investors in the BC market are now subject to a 15% taxation upon purchase as well as a hold back of 25% of the income for taxation and a higher percentage tax on the income than locals.

You may want to find someone who's well versed in foreign taxation with property rentals (I'm presuming you're looking at rentals when you'd mentioned investments). In the US, those would be people who are Enrolled Agents with a specialty in foreign tax. CPAs are more generalists whereas EAs are more specialists.

Good luck!

ROI will really depend on the cost basis. It sounds like the property was acquired some years ago. If that was the case and your purchase price was lower than today (highly likely since the market has gone up significantly in the past 3 years) then it might be worth it.

Again, you'd want to have a good idea of what you are wanting out of this in the first place. Do you want cashflow? Do you want to be a landlord? Do you want the cash out to invest in something else (maybe real estate)? Do you have another place to live if you were to sell? Is your place in a condition that would qualify for a mortgage for a buyer (if not, you're narrowing your audience)? Would you be willing to part with it for $150k less to not have to a) come up with $100k to fix it for sale b) not have to deal with living through a costly reno. Obviously the numbers are fictional - but the point being that putting yourself through a reno will cost in the way of time, money, and a softening market. However, if you list it without renovations, you can expect less. There are tradeoffs to everything.

It's really not a cut and dry answer since a lot of the deciding variables are missing. If you'd like to share some of that (or have a think about it and then share) we can better help.

I've found consistently that everyone's situation is vastly different. I had a friend who would ask me almost bimonthly why I didn't just sell one of my other properties which would "get me into" a "great home" here in Mountain View. He isn't even a realtor! :D He went big, bought in Palo Alto, and it's appreciated very nicely. I didn't want to give up my existing foothold in other areas to buy in here. Everyone's situation is different. There are a lot of levers to consider and the good news is, there are lots of people on BP (and outside of BP) that can help.

Everyone's had some excellent points so far. It'll depend largely on your motivation as well. The market has been flattening and there are some signs that it may dip going forward due to higher interest rates. Here's a great wsj article about that:

http://www.wsj.com/articles/mortgage-lenders-strug...

Rates have gone up across the board. The WSJ has a great article about that here:

http://www.wsj.com/articles/mortgage-lenders-strug...

Do keep in mind that in most markets, if you're financing a condo vs a sfh, you're looking at an additional 0.75% on top of the standard rates due to higher risk for condos.

It's been pretty unnatural for rates to have been so low for so long and even today's rate (a few days after Thanksgiving 2016) it's still hovering around 4.125%. While it may not seem like a big shift from where it was a few months back (mid to high 3s) in expensive markets, it can really price people out quickly if they happen to be on that upper edge.

I'm in The Bay Area, CA and it's been interesting to see the effect on availability, the days on market for properties. Wages simply have not been keeping up with the appreciation in the housing market.

Thank you so much @Arlen Chou ! Super helpful, as always :)

Cool coverage! I happen to love CBNC.  Curious, has anyone house hacked with no money down and having the mortgage in your name only? I might be in this kind of situation but absolutely inexperienced and could use some guidance!

What if we don't have any interest in condo-izing it? we're both looking into living there for a handful of years and then turning it into a rental.

I may have an opportunity to purchase a fourplex with a partner (non-romantic). What we'd like to do is the following:

I make this a point because he will occupy one of the units and I will occupy the other. He's not interested in "running" a rental and wants to pay for his portion in cash, which helps from a mortgage perspective. I'd be the primary on the mortgage and own the rentals. Does anyone have any experience with this and can offer advice? aka, gotchas, etc?

Thanks!

Yep, as @Patrick Liska may have alluded, most lenders are really not tuned in to knowing how to work with people with 1099 income. Some would go as far as to suggest that you shut down all of your 1099 income and go get a W2 job (I actually had someone suggest that once). Find a lender who understands 1099 income from the start otherwise it'll be an uphill battle. Hopefully your past 2 years of 1040s are tidy and you are fairly tidy with your bookkeeping, etc. You accountant should be able to run a P&L for you so it supports the case that you have a real business and that it's not just a write off for a hobby.