All Forum Posts by: Alan LeMay

Fortunately this isn't in Denver but up in the mountains. I agree a situation with an ADU would be lower risk. We are in a position where we could afford to pay for both my primary residence and this short term rental if things didn't work out. Construction in this area is just extremely expensive.

Good afternoon everyone! I would love it if people could give me some advice or poke some holes in the plan I have laid out for myself.

BACKGROUND

Under contract for 2 lots across the street from each other in Colorado with beautiful views for 130k total. I put 40k down for this, both lots are on the same loan. 

I have a house about an hour away that I owe 690k on and would probably appraise for between 880k and 940k. 

I have about 30k liquid after putting the cash down for the land. 

PLAN

I plan to take a HELOC out on my house and use that money to build a short term treehouse type rental on one of the lots. I've been in touch with a builder for this and expect the total price to come in around $500K. We then plan to either sell our house and get a VA construction loan on the other lot and build there or if things go really well with the short term rental keep the house and use the cashflow to build another short term rental on the other lot.

Our other idea is to start by getting a VA construction loan and building a house on one of the lots and then selling our house and building one cheap enough to keep a bit of the equity we currently have and using that to build the short term rental later.

Again I would love it if someone could poke holes in this. I've done a little research and have seen you can get up to 95% LTV on a HELOC but haven't talked to a lender about this yet.

Thank you!

Just figured I would give a little update to this post. 

We've been living in the MFH now for about 5 months and it's been pretty nice. The commute to work is an hour which sucks but the money is nice. We live in one unit and the 3 others are all occupied - one by a coworker who we gave discounted rent to. The mortgage/insurance and everything is $2400 a month and we currently collect $3000 per month in rent.

Some of the issues we've had were just poor renovations by previous owner. 2 of the HVAC units had no freon at all in the lines. 

I think overall we've had to pay about $2000 to repair everything that was bad. We also spent about 8K redoing the front/back yard and adding a fence. 

We are saving between $3K and $4K per month now and I'm itching to buy another property. One we don't HAVE to live in.

I mean it is pretty obvious what's happening here.

@Rick Pozos Thanks for the reply! We mainly want the cash so we can start doing deals that we don't have to owner occupy ASAP. But we also want to refinance so we can use that VA Loan to owner occupy another 4 plex @ 0% down next year or so and feel it isn't being used to the best benefit on that SFH.

First off I apologize for the lengthy post. This is my first post in this forum but I've been lurking for a long time and love this community.

Background info: Wife and I are both military making ~ $130K salary combined currently living in NJ.

Currently own one SFH in San Antonio, TX. Cash flows at ~ $200 monthly. We owe about $95K on principal and think the house could reasonably sell for $130-140K. This house was purchased with a VA loan(wife's entitlement) at 4.75% interest rate.

Closing on a 4 MFH in Philadelphia, PA this week. We will be owner occupying. Projected cash flow at full occupancy is ~$1800 monthly when we aren't living in it. We currently pay $2K monthly in rent so saving that while in this house will be huge. This house was purchased with my VA loan entitlement at 3.75% interest rate.

Our current plan is very rough but we're thinking of refinancing the house in Texas into a conventional loan so we can use my wife's VA loan again. We called a couple banks and were told we can't do a cash out refinance in Texas. We want to make sure we are using our VA loan entitlements as best as we can so goal is to buy another 4 unit property somewhere with wife's entitlement. If anyone has suggestions or advice on the best way to scale up from here we are all ears!

Thanks for your time!