All Forum Posts by: Aileen Yu

This Is my plan.

Found out today that you cannot use an FHA loan for your second property unless it is at least 100 miles away from your current primary residence. This means you'll need to put closer to 10-20% down using a conventional loan. If you were planning on using the equity in one property to fund the down on the next property, you'll need to build the equity in the home first as most lenders will only lend up to 80% (mine was just lowered to 75% due to covid) of the LTV this means... if you have $30k in the home and $70k in loans with the value of your home being $100k. You could only cash out refinance $5k (if this is incorrect please let me know BP). My loan officer did also allude to a primary residence being intended for 1-2 years and I know there are tax implications if you don't have the home as a primary residence for 2 out of 5 years of the ownership. I am in search of finding out if that means if I use it as my primary for only one year, but keep it for 6 years, will I have to take a hit on taxes. If anyone knows please let me know! Good luck Jason and happy house hacking!

No professional background, but I would identify the reason people are concerned to commit to the spot and mitigate from there. I negotiated a leasing agreement for a friend and the leasing company were very firm on all the components of the contract (no tenant improvement provided, no change to nnn) but were willing to be flexible on free rent with rent + extra rent to essentially try to get back as much money possible across the whole 5 year lease rather than up front (in order to get more free rent we upped our offer for 3 years to 5). Our reasoning for wanting the extra time is because the location is great, friend wanted the soot, but didnt know how long it would take to build out the store due to covids impact on availability of appliances and labor. I also thought I saw a cap on nnn increase but not sure if that was negotiated in by my friend from the previous lease or if it provided by the landlord. I would consider it unethical if you do expect the taxes to increase to the point the business would no longer be successful, but shouldn't tax reflect how productive that location should be, thus par for the course if it gets raised? 
 

Hi BP!

I read through a few forums with this question but missing the actual list items to consider. I've already passed my exam and now wondering if I want to follow through with hanging it somewhere. 

My thoughts is I'm already going to do the same steps an agent would need to do: become an expert in the area, driving for dollars/getting your name out there, finding network of people (contractors, inspectors, agents, lenders, etc). I want every single one of my friends to become investors (except most will not be as aggressive as I am) why not be in a position to help them professionally? My only hesitation is that it comes with an estimated $2000 investment/year and I don't think there's any throw away knowledge from becoming an agent that won't help me as an investor?

Could anyone identify the actual restrictions or limitations that are put on you as a realtor that might limit you as an investor? What access becomes available to you as a licensed realtor that helps you as an investor? Or even better, counter my thoughts with a way to still accomplish the goal in another way that I'm not aware of? 

Cons:

- Limitations on # of cold calls (not verified but saw it on a forum post). This is potential issue for me as I plan on going for off market deals as my area is very expensive and MLS deals won't be worth it. Also sounds like you can be a wholesaler without a license so maybe I can still sell without paying dues?

- Limit on # of transaction?

- Are there other restriction that a brokerage might put on you?

- Property management requirements are little more strict but even passing the test, I'm still unclear on what that restriction is outside of not discriminating when advertising.

Pros:

- It sounds like I already need to have the knowledge of a real estate agent in order to evaluate properties, might as well have the option to sell and make extra money. (If I make one sale every 3 years (for myself or others) I would still come out positive).

- I get to be in more situations where I come in contact with other people I need for my investing team (contractors, inspectors, specialist, lenders, etc)., idk, maybe I won't? Are there other opportunties outside having a license that will let me have this type of regular access to these types of opportunities? As a realtor I know you can get paid to do an open house or inspection by other agents so can still make money without having clients.

- Tax deductions. As a real estate agent I know you can expense miles on the car, marketing material, memberships, etc. I don't know if you're actually able to do this as an investor but perhaps starting out the deductions won't matter that much?

- I already want to eat, sleep, and breathe real estate, and fairly low barrier to entry, why not try it out and try to make it a full time thing?

- More opportunities to find partners? This might not be true? I have no clue.

Most of my ideas on the key things I'm hearing on the podcast that will make me successful which is 1.hustling for deals this is going to be hard work that you need to put in anyway. 2 Building my network. I figure if I'm going to have to do this anyway as an investor, why not double up and build another income generating channel through selling real estate, but then again I don't know 100% of what a real estate agent does. Unfortunately, most of my experiences has been me looking on Redfin, asking to see it then eventually buying one. They filled out the paperwork, and met me to see the house, helped me find a lender (which was actually awesome and I want to be able to have this type of lender on hand if not several!).

This is not my finest literary work but I've drafted this 2394083 times and I just need to get this out there.

Thank you in advance and happy new year!!! 

I'm a newbie from Lynnwood looking for house hack or BRRR by Mid May 2021. Any specific groups or meet ups anyone can recommend so I can start getting connected? I'm a planner so really want to understand what I need to do to accelerate my goals of reaching 24 doors in 6 years to maybe 2 or 3 years. Thanks in advance!

I'm in the same place! In general it seems like the goal is to use as little of your own money as possible. Do you have other forms of financing you plan on pursuing for your next venture? If you put 20% down it might be good for cashflow but will it help you on your next deal? I personally don't have the confidence yet to bank on getting private financing so I've planned on putting as little down as possible and saving my cash so I can put the min down on the next property and refinance the investment property value (not sure if this is viable yet as it sounds like the unit I will be living in has to show rental income before I buy the next one? Following another BP thread on this to see possible solutions).

I'd also ask your lender on what the refinancing options are on either loan. The initial loan doesn't seem as important than the refinance where you want to be able to use your own property to bankroll your next deal.

Good luck and please share any info you find outside this thread!

@ Scott Mac, thank you for those details! I like to plan ahead for such events. Didn't even know who I would/should call for the body. I'm guessing the sheriff's came with ambulance to take the body? Are there any costs associated with a deceased tenant?