After owning real estate in Spain for several years, i decided to sell my portfolio and come to the US to start my real estate investing journey here.
I have been reading and listening to many books and podcasts as possible, in order to get as much information on the US real estate market as I could. However, I am not quite sure where to start or with which specific strategy..
I found my interest in the BRRRR-strategy and multifamily deals. I have a budget of a couple of hundreds thousands.. What would you advice to start with?
- Multi family with conventional loans?
- Multi Family Cash payment?
- Multi Family BRRRR
- Start smaller and start with single family or duplexes, etc?
- Single family BRRRR
I am currently living in the Netherlands, so I would need to build a very solid and trustworty team. I also assume that househacking is out of order?
I want to get the most out of my budget, as this is a one time shot.
Thanks in Advance!
@PJ Boxel Welcome to our market!
Ideally, one of the best markets to be in right now is Medical and Warehouse NNN on the commercial side, but the budgetary requirements for that are going to be more substantial.
Your lending options change based on the number of doors in the states. Single-family loans work for all 1-4 unit properties here. Once you have 5+ doors the loan will be classified as a commercial loan with higher interest and shorter amortization rates.
For that reason, I'd aim for a 1-4 unit play. Interest rates are not favorable now, so if you come across a deal you can run cash, do it. You can always pull equity as needed by refinancing after a 6-month seasoning.
House hacking isn't out of order, but it depends on how you use it. My wife and I have two duplexes next to each other in Alaska. One of the 4 units is ours, but we Air BnB it when we're not there and one side of the rent pays for the whole building. This setup allows us to get paid to take vacations to Alaska.
I'd recommend starting with small, low-risk projects until you get a good crew in place stateside for your renovations and management. Then take on the riskier/bigger projects later once the trust has been built. Best to not risk it all on an unproven horse, so-to-say.
PJ Boxel - thanks for your post and congrats on your real estate success in Spain. A few questions to help focus my response:
1. When do you plan to move to the US and have you decided on a location?
2. How active do you want to be involved in your US Real Estate Investments?
3. What types of properties did you own in Spain?
@PJ Boxel Welcome to our market!
Ideally, one of the best markets to be in right now is Medical and Warehouse NNN on the commercial side, but the budgetary requirements for that are going to be more substantial.
Your lending options change based on the number of doors in the states. Single-family loans work for all 1-4 unit properties here. Once you have 5+ doors the loan will be classified as a commercial loan with higher interest and shorter amortization rates.
For that reason, I'd aim for a 1-4 unit play. Interest rates are not favorable now, so if you come across a deal you can run cash, do it. You can always pull equity as needed by refinancing after a 6-month seasoning.
House hacking isn't out of order, but it depends on how you use it. My wife and I have two duplexes next to each other in Alaska. One of the 4 units is ours, but we Air BnB it when we're not there and one side of the rent pays for the whole building. This setup allows us to get paid to take vacations to Alaska.
I'd recommend starting with small, low-risk projects until you get a good crew in place stateside for your renovations and management. Then take on the riskier/bigger projects later once the trust has been built. Best to not risk it all on an unproven horse, so-to-say.
PJ Boxel - thanks for your post and congrats on your real estate success in Spain. A few questions to help focus my response:
1. When do you plan to move to the US and have you decided on a location?
2. How active do you want to be involved in your US Real Estate Investments?
3. What types of properties did you own in Spain?
Hi Harold,
Thank you for your reply! I appreciate it!
1. I am planning to start my real estate journey in the US within the next 6 months.
2. As for now, I am very active in my current real estate in Spain, but I am also planning for property management (if that's what you mean). I am living in the Netherlands, so it will be a long-distanced real estate investments.
3. I did own single family homes and I am planning on buying multi family in the US!
@PJ Boxel Welcome to our market!
Ideally, one of the best markets to be in right now is Medical and Warehouse NNN on the commercial side, but the budgetary requirements for that are going to be more substantial.
Your lending options change based on the number of doors in the states. Single-family loans work for all 1-4 unit properties here. Once you have 5+ doors the loan will be classified as a commercial loan with higher interest and shorter amortization rates.
For that reason, I'd aim for a 1-4 unit play. Interest rates are not favorable now, so if you come across a deal you can run cash, do it. You can always pull equity as needed by refinancing after a 6-month seasoning.
House hacking isn't out of order, but it depends on how you use it. My wife and I have two duplexes next to each other in Alaska. One of the 4 units is ours, but we Air BnB it when we're not there and one side of the rent pays for the whole building. This setup allows us to get paid to take vacations to Alaska.
I'd recommend starting with small, low-risk projects until you get a good crew in place stateside for your renovations and management. Then take on the riskier/bigger projects later once the trust has been built. Best to not risk it all on an unproven horse, so-to-say.
Hi Chris,
Thank you very much for taking the time to comment on my post!
For now, I am not sure whether I am interested in the commercial side of real estate in the US. I always found it interesting, but I wanted to start with (small) multi family units!
So if I understand correctly, starting with 1-4 doors is the most interesting due to flexible/better rates? From 5 or more, the loans will be seen as commercial with higher payments of interest?
I read a lot of the 6 months seasoning. But it's still not very clear to me. I have the capability to buy cash if needed and refinance later when the rates are better. For now, obtaining a financing against 6,5% interest is not interesting for me. The only issue is that I would be stacking a lot of equity in a multi family and I need to wait to retrieve it back when the financing options are better.
That sounds amazing ! Are you able to househack your property in Alaska, even when you are not living there? For me, it sounds unrealistic as I am living in the Netherlands right now.
Thank you so much for your advice!
PJ Boxel - thanks for the additional information. I agree with Chris Evans that having the right team in place will be critical, as well as the age of the property. I owned a 2 Unit Building in Grosse Point MI and still own a 2 Unit Building in Brooklyn NY. My challenge has been retaining reliable teams for repairs and maintenance. The Brooklyn property was built in 1920 and has steam heat. I've had several plumbers do work over the years and I still have issues.
It is challenging to find a Property Manager for smaller multi-families in my neighborhood in Brooklyn. Also, one of the advantages of investing in larger multi-family properties is the ability to have a full-time on-site maintenance person.
Since you have a couple of hundreds thousands in cash and desire a long-distanced real estate investment, have you considered partnering with someone who is doing larger multi-family deals and already has an established Property Management Team?
Another option is to partner with someone who is building new homes. Depending on the location, you can be in and out of those deals with profit in less than a year.
Also, when you ask about house-hacking without living in the property, are you talking about renting by rooms?