All Forum Posts by: Chace Fraser

@Diandra Duncan you could shorten your inspection period to 2-5 days and say that buyer to request no repairs or credits for repairs unless required to meet the appraisal contingency.

@Andrew S. Welcome to the BP community. Just by joining you are taking the first step to financial freedom.

First off, you will need to decide on your ultimate goal for investing in real estate and then determine how you want to get involved/start. Do you want to be an agent, a buy and hold investor, flipper, wholesaler, etc... You need to figure out a plan on how you plan to attack one or more of those target areas. Next is just sitting down and following that plan to the best of your ability until you have reached your goal.

It's ok if your ultimate goal/plan changes, and it should really. As you experience, grow, and learn more, you'll have a better understanding of how things work and what ventures may be best suited for your personality and lifestyle preferences. However, try to keep on blinders when it comes to shiny object syndrome. Pick one strategy and start with that. After you’ve done a few deals of that type of strategy you can move on.

I think house hacking is a great way to get your feet wet in rental investing, especially if you can find a duplex or so and live in one half and rent out the other half. There is tons of information on the forums and various professionals on this site.

Best of luck and I look forward to hearing how it goes!

@Oscar Cardenas I haven't heard of that exemption. Can you please send me a link to the law? What do lenders think about that since they're the ones requiring the 60 days to move in?

@Matt Parker you are in sticky territory here and if you do anything wrong, and the tenant pushes back, you'll lose in court.

There are 4 loopholes to SB 608 on why you can terminate a tenant. Here's a link to an easy summary of SB 608 

1. The seller will need to serve 90 day no cause notice of eviction, and pay a relocation fee, before you close. And then, as mentioned above, you can close 35 days after that (to satisfy the VA requirement of moving in within 60 days of closing).

2. It doesn't matter if you're the new landlord; the tenants' rights are the tenants' rights. You can only raise the rents 7% + CIP

3. You can't "no cause evict" a tenant without a qualifying reason. Those 4 reasons are in the link provided.

Hi @Ellie Hanson, you have a high-quality problem :) And a few options. Like others have said, people are buying houses like crazy whether they vacant or tenant occupied. Inventories are CRAZY low right now and money is still cheap, now is probably the time to sell if you want to cash in. We don't know what the market is going to do in the future so you may think about "making hay while the sun is shining". 

I'm working with some investors now who are looking to buy an investment property to simply "store cash" so that it appreciates with the market instead of losing value. They haven't been successful because they aren't willing to go $80k over asking price... but they're close.

Have you thought of selling them with a 1031 exchange to get more cashflow and then retire or do you just want the cash? That's an easy question to write and I know there are likely a ton of little nuances that need to be taken into account in order for you to achieve your goals.

@Will Driscoll I second what @Ryan Iskierka says. That way you're using all the banks money, you'll get rid of PMI, and cash flow event more! Talk to the lender you used when you purchased the property to see if this is an option.

@Polyte Davis I'm curious what your thoughts are on why you'd entertain waiting? Are you trying to "time" the market? I'm with @Caleb Brown... use your VA loan to buy a SFR that you live in and rent out the rooms. Then buy another one in a year or two with an FHA loan and live in it and rent out rooms. Then refi out of your VA and use it again.

The government printed a bunch of money, and money is cheap (low interest rates). These two things combined will keep real estate moving up and, at worst (depending on the market), plateau. But owning property and utilizing the income, depreciation, equity build-up, appreciation and leverage is something you should likely do sooner rather than later.

@Alex Lesar you have lots of options... including an FHA loan. Let's think about numbers real quick...

ROI on Conventional 20 percent down ($36,000) for $275/month ($3,300/year) cash flow = 9.16 ROI

ROI on FHA 3.5 percent down ($6,300) for (complete guess) $150/month ($1,800/year) cash flow = 28.57 ROI

ROI on 0 Percent down for $125/month ($1,500/year) cash flow = INFINITI

A strategy you could implement might look like this: buy #1 with your VA, a year later #2 with FHA, a year later Refi #1 into conventional, buy #3 with VA, a year later Refi #2 into conventional, buy #4 FHA. And on and on and on. This would preserve capital and allow you to leverage. It may get challenging to have enough equity as fast as you like to refi into conventional loans and all of the properties would have to be your primary residence.

Also, don't let people tell you PMI is a bad thing. It's a great thing because it allows you to put less money down, use more of other peoples money, gives you a higher ROI, and it goes away after you have enough equity (just a few years of appreciation). Just don't be dumb and not have ample money in reserves (8-12 months of mortgage payments) for when $hit hits the fan and a global pandemic rolls around.

@Antony Munoz welcome! House hacking is an incredible way to ease your way into real estate investing while minimizing your living expenses. House hacking is a great strategy and works in any market. We're currently house hacking a duplex in SE PDX and our tenants are paying 70 percent of our mortgage payment. 

If you are using a low down payment option, it's not really realistic to expect to be cash flow positive while you’re house hacking and living in the property. However, if your house hack reduced your housing costs from $1,200 to $600 per month, would that not be a win? That would create an extra $600 per month of “cash flow” that you could save and invest in your next property. Keep in mind the property must cashflow after you move out for the deal to make sense (in most scenarios). When an investor is looking at being cash flow positive, they are typically putting down 20 percent or more. If you are in a high demand metro area, it's simply not realistic to expect to be cash flow positive if you are putting down 0-10%.

Now if that is all the capital you have, that is what it is. Is it better to keep renting than to buy? Typically it is better to buy. Better to build your own equity through the debt paydown, enjoy the tax benefits of ownership, and garner the equity of an appreciating asset. You just can't expect to cash flow on an initial purchase with a low down payment. Now with time and rent growth, what could be a negative cash flow property might very well become a cash flow king, but that takes patience.

Another way to increase cash flow would be renting out rooms in the unit you live in, either Airbnb or longer term.

And think of it this way too... if you house hack 3 properties, and then 1031 exchange them into larger properties you'll likely achieve finanial independence within 6-10 years.... just by house hacking.

Hit me up if you want to chat about different strategies to get started in the area and then how to responsibly grow your portfolio.

As an agent, I'm working with people who are house hacking and others who are looking to "store cash" in real estate so they can enjoy all the benefits of it instead of letting the money lose value by sitting in the bank. Others are selling their assets here and moving those funds to cash flow markets. I have a friend who is wholesaling (with the basic strategies you see everywhere; direct mail, bandit signs, etc). 

As an investor, we're looking to purchase our second house hack next year. 

Hit me up if you want to connect