All Forum Posts by: Tyrek Brown

I'm not sure where you are exactly in the process, but the borrowers I have spoken with in the past worked with Easy Street Capital. They also used PadSplit to list their properties. 

Hey Abigail,

Based on what you said and your market, you should have a lot of equity in the property. Getting a HELOC is a great idea to get you started.

With the HELOC funds, you can look into purchasing another property. I would advise looking for turnkey properties or ones that do not need a large amount of rehab done to them. The others will keep you up at night!

The thing about flipping right now is that it really does requires knowledge of the market and to be confident with your numbers. Find a realtor or appraiser that is super knowledgeable of the market, a contractor that won't flake out on you, and a lender that will make sure you aren't in over your head, and you'll be on your way to getting started.

What are your goals? Are you looking for an active real estate career or something more passive? 

I'll be honest with you. STRs are a lot more work right now in this market.

With that said, once you are settled into an AirBnb you can get into a kind of rhythm and they can be fairly passive. However, that isn't really an option with rehabbing. 

You'll have to deal with construction teams, mishaps, no-shows, additional work needing to be completed, property not appraising high enough or selling fast enough, etc. You will definitely go to bed with more restless nights from rehabbing then AirBnb. However, your opportunity for growth will be higher. 

At the end of the day, it depends on your goals. Evaluate the market, see what is needed, and go from there! I would definitely say if you plan on continuing to work, you should probably steer more towards the 3-plex than rehabbing. BRRRR will be almost a full-time job when you first start due to the lack of a team.

I know that the LIREIA is in the area but I haven't attended one of their meetings before and I'm not sure how active they are. Sorry.

In regard to house hacking, that is always a great idea if your plan is to stay local and reserve money with a lower down payment. You'll save on your monthly payment and get experience with being a landlord. You should look for properties with a basement or mother-in-law suite if you aren't comfortable with the idea of living with others. 

I've always been advised to avoid investing in the tri-state area due to prices and limited inventory but do what is best for you. However, if the property is truly an investment property, I feel it would make more sense to take the time to find a solid PM and invest out of state. 

Hey @John Quintanilla

The only number that seems off right now is the income, which should be around $4,000. 

I will say off the bat, it can be a little tough for numbers to work in NY in my experience. With the numbers you've inputted the property would have negative cashflow with a 20% down payment. However, with a 25% down payment the income would be close to the amount of the mortgage payment plus expenses every month. 

Hi Nathan, 

No, you will have to live in the property for at least a year if you go the FHA or low down-payment conventional loan route.

If you were to ignore that rule above, you would be committing mortgage fraud and your mortgage company will have the option to default you (you would owe the full amount of the mortgage) if they find out that you moved out. 

Also, something important to note is that if you live in the home 2 out of 5 years before you decide to sell the property, you will be exempt from paying sales tax (up to $250,000 if you're single) when you sell. These years don't need to be consecutive. You can live in the property year one, rent it out for 3 years, and move back in year 5 and still receive the sales tax exclusion when you go to sell the property. 

I would argue that if it's a multi-family unit, at the very least you should be able to have your mortgage payment cut in half by house-hacking which is still a sweet deal. 

Congratulations on the first property!

Just like with anything in life, the full picture is definitely not always peaches and cream.

Let this first property be a stepping stone and an opportunity of growth. Network with more professionals (lenders, realtors, contractors, etc.) and find people that you can trust that have your best interest in mind. 

Real estate is a big ocean, and I think it's not fair to yourself to generalize the entire business off of one experience. You may find people that you really connect with. 

Best of luck with everything and Happy Holidays!

Nice! Did you refinance the properties?

@Buck Dabill - To add on to Cory's comment,

I don't think a DSCR lender is the best choice in this scenario, unless you were to raise rents. The LTV you need would most likely be 70% after you payoff the current loan, pay closing costs, and get the $50,000 cash out. However, rates are between high 7s to high 8s for DSCR lenders right now. This means that your monthly payment would be higher than your rent, which is pretty tough for DSCR lenders.

I know a couple DSCR lenders that go under 1.000 DSCR, but the max LTV is 65%. If you plan on refinancing a couple properties though...it could possibly make sense to do it if you need the funds.