All Forum Posts by: Paul Camuto

Hi Joe, I should've replied by saying I've been skimming the BP on house hacking and listened to a couple of pod cast as well. In most scenarios people seem to make the decision to purchase a multifamily by living in one of the units the first year. In my case I'm still living in my single family that I paid $410,000 for (at 2.75% interest rate and recently refinanced with no cash out due to a divorce). At best, maybe I could convert my basement to make it more renter friendly (it doesn't have a kitchen)... but other than that, how can I use the house hack strategy in my situation? I'm stuck without a lot of cash and I'm wonder if I would have to move out altogether or sell and start over?

If not illegal where you are, and if it has its own access, converting a basement to a dwelling unit is a great place to start without having to move. It has to have ingress/egress to be safe - windows and doors that someone can get out of in an emergency - and of course operable plumbing, heating and air, and a way of blocking off access to your primary, but many people have done this; it's especially common in cold, urban areas where basements are full-size owing to deep footers necessary to build homes and space is at a premium. Depending on your space levels you can create just a studio - where everything is in one room - or, better yet, a 1/2 br with a single space kitchen/living/dining. Installing a kitchenette is easy if you've got access to plumbing.

I love this idea and have been considering it, but I need to look up the laws! The basement is approx. 1200 square feet (1 bedroom) with a large living area. The closet in the bedroom is not deep, but I could have a contractor take a look. The bedroom has a short window and so does the main area, and there's a normal size sliding glass door that exits to the back of the house. Unfortunately beyond the sliding glass door is a stairwell with about 12 steps leading to the (grass) in the backyard, therefore I would have to install pavers for a pathway leading to the driveway alongside the house.

Most important of all -- If the basement idea were to work out, wouldn't I still have an issue obtaining financing for my next property (a multifamily)? I would still be living in my primary home, and I would imagine that I'd have to come up with the whole 20% down on a Conventional loan, correct? Fha requires that you occupy the home I believe. Thanks!

Do not rent out the home you in live. Been there done that. Not worth it for quality of life. Even if there are separate entrances etc. Stay away. You want to be a landlord or investor. Do it right and get your own property dedicated to renting.

0 Votes

Columbia, Maryland

Why are you saying begin in multi-family? How about you begin by purchasing one unit? A single family home, condo, townhome? You have 100K equity. Get a line of credit to use for the down payment. Don't make it harder than it has to be.

0 Votes

Columbia, Maryland

There is so much hypothetical in your statements. What have the actual sold properties and sold rentals gone for? Base your decision on what is actually happening not what you think is going to happen.

0 Votes

Southeast NC, North Carolina

Sounds like the area you rented in equals the quality of tenants that you are getting. No property should be vacant in this market. Sounds like you are being too selective and have a personal emotional tie to the rehab. Most rental properties will rent without extensive work being done. Next time only rehab if you are looking to sell, that way it doesn't matter what happens to the property.

0 Votes

Colorado Springs, Colorado

Quote from @Dakota Cochran:

so basically I’m new to real estate and I’m looking at a property , the guy wants cash only and if I don’t have the funds and don’t want a partner that leaves hard money lending, right? So I think I have a basic understanding but what’s the fine print? How do i find a hard money lender, what’s a good interest rate, any major things to watch for or anything I need to know to protect myself?

Thanks a million!

Please do not get into real estate using a hard money lender for your first property. If you cannot get a conventional loan for your first property you are setting yourself up for failure. Can it be done yes, should it be? Probably not. Protect yourself by saving first then buying.

2 Votes

Tampa, Florida

Forget the appraisals for your offer. Comps (what homes have sold for are all that matter). That is market price. Is this an investment or your primary home?

0 Votes

Los Angeles County, California

Quote from @Mike Eichler:

I've been involved in Real Estate for a year now. I jumped right in with a Short term rental management

company (Liberty City Living). Throughout my time it was very fun to watch the company grow from a mere

60 units in Philadelphia managed, to over 200 managed in multiple markets just a year later. Ever since I was

in high school learning about Investing and real estate and finance via Youtube, BP, books, podcasts, etc.

I knew that real estate would be my game to play. One strange thing occurred though, In my mind, Long term

renting would totally be what I got into, via Househacking a duplex or something of that nature, but when I

started to get involved with property management of Short term rentals, my perspective changed dramatically.

My entire plan of Long Term renting would go straight out the window and now I was only after STR properties.

Here are some of the major reasons why I like STR much better than Long Term Renting:

Guests PAY FIRST, before getting info about how to get to the place and how to get in they must pay first, so there

is no worry about a tenant paying on time.

Bad tenants are gone after the reservation, so it makes rowdy guest reservations quick and then they are gone

Tenants sometimes damage items whether it's long or short, but with STR, you are able to chargeback guests and

get compensation for damaged or broken items at your place, so there isn't much worry there.

The rental income is typically much more than Longer-term renting as I have seen, you can expect a 2-3x increase

in cash flow for Short term rental properties compared to Long Term

When you offload the work to a Property management company, there is nothing to worry about as an owner you

are simply able to collect a check each month and that's it.

- Mike Eichler

What are your thoughts on these, are there any I missed?

Everything has its pros and cons and really can't be generalized. STR have their headaches as well and typically can't provide the same cash flow as LTR. If you found your niche good for you. Others should keep their eyes open to opportunities that work for them.

2 Votes

It is never too late. 56 is still young. You have the capital to put to work. What would you get to cash flow for individual unit in your area? See the #'s on what you would need. You can also look at private non-traded real estate like BREIT from Blackstone. You look like you are an accredited investor and there are other non-accredited options.

1 Vote

New York City, New York

Quote from @Anthony Michael:

We've all seen the fear mongering that's being pushed by a lot of media outlets and influences. My question is are their thoughts justified in the current housing market. Due to Bigger Pockets being very diverse one would assume that someone's market is having a downturn of home sales right ? I'm in Fort Lauderdale and stuff is still flying off the shelve. Even where my fix and flip company is in Clearwater, it's the same story there. Is Florida the outlier where a housing market correction can't happen? How's your market doing where you operate ? This is purely speculative post no suggestion anything is or will happen in the market just looking for opinions and to see what others have to share!

Everything is flying off the shelves as you call it in every market. No one knows for sure what will happen. If the #'s make sense and work in the current environment then buy. If they don't then hold and wait it out.

2 Votes

Fort Lauderdale, Florida

Quote from @Sheena R Roth:

We are under contract on a side by side duplex near our hometown in Ohio. We just found out that we are inheriting the sweetest 80 year old tenant who has lived in the place for 20 years.

Market rent is $950+. This little lady is paying $475… there’s no way we can afford to pay market price on the purchase and keep her rent anywhere close to that low. We basically have to get her to $750 to break even on her unit but she can’t afford to pay that much on her SS income.

She has no computer or skills to use one. I can’t bear the thought of raising her rent and leaving her to try and figure out her options by herself so I’m trying to line up some options to bring to her.

The most obvious choice would be to find herself a roommate.

The only other option I’ve found is Section 8. However, I’ve been told that it could take years for us to get the both her and home into Section 8 program. They also mentioned that since she has a place to live right now she would be placed low on the waiting list.

I struck out on the Agency Center on Aging. United Way, and misc charities in our area.

Any other ideas for possible rent assistance specific to senior citizens?

Why would you even buy the place with knowing the issue at hand and then not wanting to deal with it. All of this should have been worked out prior to going under contract.

2 Votes

All Forum Posts by: Paul Camuto

Paul Camuto has started 12 posts and replied 170 times.

Post: Stuck in my primary house! How Can I Purchase my 1st Multifamily?

Post: Stuck in my primary house! How Can I Purchase my 1st Multifamily?

Post: Running the numbers again on my vacant property... Still Confused

Post: Which option would you choose?

Post: Please explain a Hard money lender

Post: Are Houses Actually Appraising for These Prices?

Post: Why I like STR much more than Long-Term Renting

Post: Struggling To Find The Path To Passive Income

Post: The Market Crash 🤔 or lack thereof ?

Post: Sweet 80 year old tenant can’t afford rent