All Forum Posts by: Aaron K.

You can't borrow at 100% equity so you still need to build up a new down payment every time, and I think repairs, vacancy and management are going to be a bit more than you are expecting at the moment

Cheapest around here that still has a bit of quality would be up in the mountains, yeah it is a commute down everyday but it is much cheaper than the rest of the IE, if that isn't an option then be patient, wait continue to save and your strike zone will expand over time.

@Allen Scoging ok if this is in SoCal this is probably pretty deep into the LA metro and nope, lots of people spend lots of money and do very little to zero math on these things.  Not everyone buys with borrowed money so while with 20% down it doesn't cash flow if someone buys cash, they get a 3% return on their money or so which is about 5x even the good banks at the moment with a chance for appreciation, so in their mind it is worth it.  It all depends on perspective, a lot of people also buy properties like that and instead of paying $3k in rent get to pay slightly less in mortgage payment after accounting for the rent they collect, all the while building equity, which if your alternative is renting and building zero equity is a pretty decent financial decision.  Multifamily in SoCal and in particular anything in the coastal counties is not just for investors like it is in most other parts of the country, lots of owner occupants.

Can't say anything as we have no clue where this is.  Based on the price alone I'm going to guess Bay Area CA, vacancy probably a bit too high as is insurance and perhaps even repairs.  The other thing to consider is if this property is currently rent controlled and what the market rent should be, if rents are under market an almost guaranteed increase to bring them up to market is appealing to some folks.  If in CA there is also prop 13 to consider as your property taxes will not rise as quickly as the value of the house.  Also not everyone who buys a duplex is an investor, some people buy them to live in and reduce their living costs without ever planning to do a house hack or crunching the numbers thoroughly.  @Allen Scoging

@Sherelle Montague this is going to sound counterintuitive but don't just follow the money.  What I mean by that is you will be living there at least for a while so it should be somewhere you can at least tolerate living and that you feel safe, which can be difficult to do from afar.  Many places that look good on paper actually end up having higher turnover, less appreciation, more vacancy etc. in the long run.  I'd narrow your search to a couple of metro areas and fly out to get a feel for the areas before making any offers because you will be living there and as I said before some things are hard to judge from afar.

@Akshat Nanda what are your concerns here?  The tenants are likely on a de facto month to month lease, which you should get tenant estoppel for.  You would then write new leases when you close, it is definitely a speed bump but if the property is otherwise a good deal I wouldn't abandon it for that reason.

@Julian Rivera most of what you find around here is going to already be fixed up when it comes to HUD and the intention is for them to sell to owner occupants that meet certain income requirements.

@Robert Faragalla house hacking is certainly an option, just make sure to level set your expectations you aren't going to cash flow if you live in one of the units, but you are likely to save yourself some money vs renting from someone else.

@Julian Rivera yeah with $11k you probably need a partner or to wait and save up more, probably the latter if you plan to invest in SoCal SFRs in Moreno Valley start around $300k, and that doesn't get you much.

@Evan Nix with supply so tight in most areas of the country you should have no trouble listing on the MLS you probably get more selling each side individually. Only way you might have trouble is if you over-improved for the area, which if you did there isn't a way to fix at this point anyway.