All Forum Posts by: Alejandro Garcia

@Jared Rine Hey Jared! I do not have another property under contract it was just me hoping to move quickly after my current refinance out of the FHA loan. And the 3rd party was a loan officer from another lender who reached out to me but I brought it up to my current lender and they agreed.

Hi!

I am in the middle of a refinance where I was planning to refinance from my FHA loan to a conventional loan on my Los Angeles duplex! Over the year since I have purchased the property I have managed to get the appraised value from $570K to 775K, a lot due to the normal market but a lot of sweat equity too. My desire was to refinance out of the FHA loan into a conventional primary loan and then move on to the next property using the FHA loan again but was advised by a 3rd party that it might be hard to get another property if I list my current one as my primary residence. If I use an investor loan the interest rate would go up and I will most likely have to keep 25% down which affects how much I can pull out.

So I am currently stuck on what to do, stick to the conventional primary loan or get it as an investment loan? I was hoping to get another property by the end of this year and it would be within 20 mile radius of my current property. Any thoughts or ideas would be much appreciated.

Thanks in advance!

I think this is an easy problem especially if you are still new to real estate investing as I am. Set your criteria and practice sticking to it. You can take risks once you have more properties to soften the blow if anything goes wrong in any of the others. You have a income criteria and a occupancy limit so make sure to stick to them. I was in a similar position earlier this year with my duplex and it took me more than a month to find a tenant but the tenant I have found earns good money, is always on time or early with payments and causes no problems. If I gave in to the family of 6 who wanted my 2 bedroom I probably would have had a much harder time. Good Luck!

Hey @Shefali Golvelker, I am not a professional but I thought I add my opinion anyways. Like anything it would really depend on the numbers if renting out your current house would cover the mortgage and other expenses such as Capex, repairs, vacancies, and leave enough for some cash flow that would be great! Not only would you get the cash flow but you could have someone pay off your mortgage. But the other side of it would be looking at what you will be able to buy. Rent is up but also prices are up so would you be paying more in housing expenses if you bought a new house? Would houses in East Long Beach work as rentals, as in an exit strategy in case you move again?

Thank you @Rick Albert and @Jon Schwartz for your input. I was thinking a cash for keys/buy out would be the only reliable option. Might need to look for a property slightly smaller so I would be able to pay for the time the units would be unoccupied if it does end up working out. 

And I like the idea of asking for the property vacant, would allow for the seller to do the cash for keys and deal with that stress rather than do it myself. Is there any downside to doing it that way other than just having a potential deal fall through if the tenants refuse to take the deal?

Hey Cody!

If I were you I would look into your area before you do anything out of state. San Diego is a expensive area to buy but I was able to get a duplex in Los Angeles last year with as little as $20K down so I feel you can find something similar in your area. Maybe look into a duplex or single family and rent it out rooms to other college students. Anything you choose will require some of your time so it might be hard to juggle things at first but I think the time you put in would be worth it rather trying to put it all on a "Turnkey" company.

But maybe save a little more and spend some more time studying and running deal analysis until you are comfortable with what is a good deal. 

Hi I am currently looking for a second property in the Los Angeles area to House Hack! I purchased a duplex last year and have since renovated, placed a tenant and looking to refinance soon and do it all again. I am looking for a bit of a larger challenge for this next property so I have been looking at 4-plexes but the houses I've been liking (based on price, location, condition) have been occupied with tenants pay way below market price!

An example of this would be a 4 plex with 4 2-bedroom units with units being rented for $800-1100 when the area could be getting $1700-2000 (a upgrade will probably be necessary). 

I assume I can get one unit vacant so I can occupy as an owner occupant but was wondering what I could do about the other units! Raising rents slowly over the years will take too long so any advise for people with experience with this would be much appreciated!

Thanks in advance!

@Seth Borman Might be a dumb question but what is DBS?

Hi I just closed on my first deal, a duplex in South Los Angeles, and excited to get started renovating it but some of the things I have in mind might require permits so I was wondering if anyone had experience with the process and could provide some guidance.

More about the property, the front unit is a 3 bed 2 bath bungalow style house built in 1925 so the layout is outdated. One of the bathrooms is a jack and jill bathroom which I want to change. Close the current doors and open a new one from the living room into the bathroom instead of the entrances coming from the bedrooms. I also want to open up the wall between the kitchen and living room which is a load bearing wall and is my largest concern for permits and time for the job.

The back house is a similiar issue but is a 1 bed 1 bath with an extra room (no closet so not considered a room). Same thing with the jack and jill bathroom and kitchen wall. I want to add a closet to the extra room so I can rent it as a 2 bedroom but it is already small so plan was to take up some of the kitchen space to build a closet and then just add a door in between.

I assume the load bearing wall projects will require permits but I am not sure about the bathroom remodels or the closet. Does anyone have experience with such jobs, specifically getting permits in the Los Angeles area? 

P.S. I plan on doing most if not all myself with the help of my father who is very skilled. He has done such jobs but he never had to do permitting. 

Mechanical Engineer full-time and REI is my hobby but want to switch that around someday.