All Forum Posts by: Tommy Loretz

@Alfredo Navarrette, I am currently house hacking with an SFR that includes a separate entrance studio. The studio is operating as a medium-term rental, and we have had a lot of success with Furnished Finder. With a young child, sharing rooms in the primary residence was not an option but this allows us to have a safe and secure home while also improving our financial position.

@Dustin Peters I am very interested in adding an ADU but am also weighing the options of selling once it has been our primary residence for 2+ years and the market (hopefully) picks back up. Have you seen any increase in resale value with the addition of an ADU?

@Doug Spence 5.0% flat but I spent about $8,000 to buy down points. The monthly savings will be greater than what I paid down in approximately 20 payments so it made sense to me with a 2-year plus hold period.

It's David Greene's loan brokerage so they were pretty knowledgeable about different investment scenarios.

Investment Info:

Single-family residence other investment in Walnut Creek.

Purchase price: $1,199,000

We are using the property as a primary residence house hack. It was originally listed for $1,399,000 but we secured it for $1,199,000.Our appraisal came in at $1,352,000. The top level consists of a three-bedroom plus a full bathroom (used as the primary residence) and a studio with a full bathroom that was previously used as an art space. We furnished the space and added a fence to provide a private yard for the studio. We have been generating $2,000 a month through Furnished Finder.

What made you interested in investing in this type of deal?

We always intended to begin our investment journey with a house hack and this property delivered. We were originally planning to buy a fourplex but when my wife and I found out she was pregnant, we prioritized a single-family in a safe neighborhood that still provided house-hacking potential.

How did you find this deal and how did you negotiate it?

The property was listed on the MLS. We waited until the price dropped by $200,000 before making an offer. I represented us as the selling broker.

How did you finance this deal?

We used a 0% down VA Loan brokered through the One Brokerage. I used the commission from representing us to fund the closing costs.

How did you add value to the deal?

We are planning to renovate the property after living here for 2+ years and then sell it. We will then repeat the process.

What was the outcome?

N/A

Lessons learned? Challenges?

Systems are how you build a business. Also, Furnished Finder is an amazing resource.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I would recommend myself as the real estate broker (lol) and Braydin and Nolte Mehnert at the One Brokerage as our lenders.

@John Brooks

My first purchase in the Bay Area will be a 3 or 4 unit building that I can house-hack (live in 1 unit and rent out the others). I, as well as most of BP, view this as the best of both worlds; Building your own equity while also starting out with investment management.

@Chad Vineyard - I would think normal depends on the market and asset. A 200 unit building is obviously going to have a different fee structure than a single family rental.

@Robert Withers - Check our IPX 1031. They’re intermediaries for the exchange portion and should be able to offer some advice for free.

@Robert Withers

I think you would be better served speaking with an attorney than a CPA.

I’ve lived in San Francisco for a while and am planning to house hack a small multi-family. Although COVID-19 has had a large impact on the commercial market and impacted residential rental rates, SF is still a desirable core market and should bounce back over the long term. I’m confident that the current struggles will also create some opportunities for creative investment.

@Al D.

Thank you, Al. Fortunately or unfortunately I am thinking about this hypothetically at the moment and more so from the perspective of opening a net fee property management company. Although I would not want to include the loan/interest payments in the NOI calculation similar to calculating CAP rates.