All Forum Posts by: Robert Reynolds

 Congrats on getting your real estate license. I got mine last December and it's been a blast helping others fulfill their goals and dreams. Please hit me up for any advice. 

As far as house-hacking or buying out of state, I would 100% house hack. Like you said, you will get back a lot of your downpayment with your commission. I am assuming you are going to put down 3.5% on an FHA loan. You definitely won't cashflow, but you will be controlling a large asset using 96.5% of the banks money and you get 100% of the appreciation. I always tell new investors to not worry about cash flowing, especially if you are doing 3.5% down. In LA/OC you will get 5-10% appreciation year over year and that will greatly outweigh any cashflow you will get out of state. For example if you buy a duplex for $800,000 and you put down 3.5% ($28,000), if it appreciates 5%, that's $40,000 a year. You will also pay down your principal at a rate of about $900 a month ($10,000 a year). So after one year you've built about $50,000 in wealth. That would talk a long time to build in Cleveland. Then you can eventually refinance into a conventional loan and with higher rates in the future, you will eventually cash flow, and you can tap into that equity to help build your portfolio.

Goal is to quit my current job in 2 years to focus on Family and selling real estate. To do this I would like to buy several STR properties and to continue to build up my real estate business.

I am currently building one. My advice is to build one as large as possible. I am building a 2 story, 2 bed/1.5 bath ADU right now. I wish I could recommend my contractor but he's been horrible. If you want to check mine out sometime I can show you around or send you a walkthrough video. We are about 1 month from finishing.... hopefully. I live in Westchester and can't wait for it to be finished.

 HI, @Kara Lorenzana, 

It is definitely possible with your income, especially if you are looking to house hack. Those areas in the San Fernando Valley have good areas and not so good areas, and just like most of LA, it often will vary by street. If you want to send me some of the properties you are looking at I can let you know. My other job besides being an agent on So Cal The David Greene Team, is that I am an LAPD officer and I used to work the Van Nuys area. I can let you know which areas are better than others. 

Depending on if you are putting 3.5% down for an FHA or 10-20% down for conventional lending, doing a HELOC may be difficult after just 2-3 years.

 I agree with Charles. Speak with an investor friendly agent and let them run you through several scenarios. However if you already have a property in mind, talk with an attorney and they can help guide you on that. I don't know you particular circumstance, but I definitely understand the benefits of subject to, but there are some down sides you may want to be wary of. 

Hi Ethan, 

I bought my first home at 24 years old, it was a house hack in the San Fernando Valley. I rented out my spare two bedrooms to my friends and basically owned a house and paid about $300 myself towards the mortgage. It was a great way to buy a home when I was young and ok with having roommates and I recommend doing to same to all young investors looking to get their first property. Start with a low down payment (3.5% FHA or 5% conventional), rent out spare room and even garage space, and live for virtually free. While doing that fix it up with some sweat equity, creating that forced appreciation, and buy your next. Keep repeating that and you will be financially stable in no time.

I sold that and bought my current home in Westchester. Wish I kept that one as it has appreciated a ton since selling, but I needed the funds in my mind to buy my current house. At that time I wasn't a BP listener and if I had something like BP back then I would have taking a heloc out or cash out refi and used that money to buy my next house. I am currently building an ADU on my primary and just bought my first investment property in Joshua Tree, that will soon be live on AIRBNB and all other STR platforms. Building the ADU may have been a mistake because I could have used that capital and bought several other investment properties at the time, but I won't know for sure for the next few years. I am excited for the STR and think that's the best way to buy an investment property right now.

Get a short term rental and hire a property manager. Buy one that’s already up and running and fully furnished with a team in place. It’s like buying a business that’s already operating and can be pretty passive. 

Totally, understand. Do you currently have a primary residence? If so, have you ran the numbers on it to see if it would work as a rental? If it is, you could then look to buy another primary residence using a FHA loan or 5%-20% conventional loan.

What are your thoughts of looking into short term rentals? Let's connect and I'd love to learn more about your present circumstance and how we get you to where you want to go. 

Hi @Diara Campbell, 

I would recommend starting out with a condo, and house hacking it. They have a cheaper barrier to entry, can get a solid 3 bedroom condo for $400-600k in Los Angeles. Multi-Family will start at around $750k in Los Angeles, and it's also difficult finding a property with vacant units in move in ready condition. With a condo, you will have little cap ex, and other maintenance issues, as that will often be covered by an HOA.

As far as investing with low-no money down, I would recommend the FHA loan at 3.5% down payment and then try to have the seller cover your closing costs.

Hi @Bryan Kelly,

It's very hard to hit the 1% rule in SoCal. You can with STR, a good rule of thumb there is 15% sale price should equal Gross Revenue. That's attainable in the Joshua Tree and Palm Springs area. In Los Angeles, I always recommend house hacking and live in flips. My belief is that LA appreciation over time will make you more wealthy than cashflow in cheaper markets.