All Forum Posts by: Alex Hoang

@James Hamling and @Russell Brazil Thanks for the perspective and the the corgi memes! I am fairly new to the game and its nice to know in the long run this probably doesn't matter. Not sweating it too much but in my acquisition phase, I'm just trying to optimize and understand if I am talking to the right lenders. 

@Chris Mason Hello to a fellow Oaklander, and thanks for the info that was really really helpful and explains alot of what I have been seeing

@Randy P. my rate is 4.875 without points, if you find something better please pm me your contact!

Ive been shopping around for lenders for conventional fanny/freddy loans for investment properties. 

I've talked to 3 national banks, and 3 local to my markets (currently memphis and OKC)

But the rates seem higher than what I was expecting given that the federal interest rate is practically 0. I'm getting quoted 4.5-5% for 30year fixed for traditional financing for SFR and .25% on average higher for small MF.

Before this, it seems like it was 3.5-4.25%

Is anyone else having this experience? Is it cause I am a new investor?

If not, does anyone have a lender they can recommend?

I am from Ca...

I'm waiting for another bid to come in. 

The general problem with this property is that it is a 3 story unit, where the 2nd and 3rd floor is a unit. and the 1st is its own. This requires a new HVAC for the first floor and mini split system for the 2nd and 3rd floors. 

I'll def talk with other other HVAC companies. 

But this company says "all our landlords use this method" And I have never heard of it before. Was just curious of what others have done and if other people have used it. From your opinions it seems definitely more costly over time... especially if I hold it for long. 

Hey BP,

In the middle of a rehab on my first BRRRR.

Duplex is about 3000sqft and has ducts to first and second floors, but not to 3rd, and needs to heating and cooling options for entire duplex. 

Option 1: pay around 20K to install new HVAC/minisplit system.

Option 2:  pay for heating and cooling as a service which is about $350 a month without installation fees for 10 year contract, they do all needed repairs and service a year included, write it off as a service. when I sell pass the cost/contract off to the next buyer. details at: https://www.knochelmann.com/advantage-program/heating-air-conditioning

Has anyone had anyone used something like option 2 and what are your opinions?

Thanks

hmmm the goal is to make the 2nd and 3rd unit into a single unit. The 3rd unit/floor consist of 2 rooms that are divided by the stairs that you come up to the floor on. One room is a kitchenette with bathroom, the other is a bedroom. 

My original plan is to remove the kitchenette and make it 2 bedrooms up stairs. combine the 2nd floor which has a living room area and a kitchen. 

I'm not sure exactly how I can consider the attic its own unit without leaving the kitchenette in then I lose a bedroom. 

Hopefully that makes sense. Have any ideas?

If you have the time and want to see, I'm more than happy to send you a video of the walk through. 

So far from what I understand is that if I modify it to any other more conforming duplex or SFH, then I can never go back.

But what you are saying is that I either keep it a triplex or convert it to a fully conforming SFH. Correct?

Hello BP,

I currently have triplex under contract in Covington, Northern Kentucky. It a 3 story building (the top floor is the attic) where each floor is its own 1B1B unit. I am planning out my rehab but turning a triplex into a duplex is more complicated than I thought. Let me explain:

Background: At one point, this was clearly a single family home and was converted into a triplex and registered as one. It has been grandfathered in and currently is allowed to be an operating, non-conforming triplex. It is a full gut rehab. I plan to BRRR it. I estimate that I can rent the first 2 units at $650 each, and the 3rd at $500. Estimated Cash flow $650 after refinance. If I convert into a duplex, it would consist of one large 1B1B and one 3B2B with estimated cash flow of $550-650

Why I want to change into a duplex? maybe SFH? 1) triplexes are rarer in this area and are hard to find good comps. the comps are all over the place. Duplexes have more reliable comps and I can more predictably refinance. SFH probably have the best comps and arguably more equity but comes at a cost of lower cash flow and few doors. 2) the top floor is an "economy 1B1B" as was an attic and is less appealing. 3) the whole building does not have HVAC and to bring to modern standards, 3 HVACs sounds $$$. 4) Don't have to remodel a 3rd kitchen.

Problems of changing to a duplex? 1) since this was grandfathered in as a non conforming duplex, I will have to make a change of use. This puts me in a grey zone of code where I am "more conforming" and have to make several but not all adjustments to bring to code i.e. put egress from 2nd unit, put smoke detectors everywhere. The city is pretty vague and I run into the problem of having a lot more rehab after inspection 2) I will have to submit new permits for approval for the conversion 3) I lose one more door and possibly more cash flow, but the 3B2B will be more appealing to long-term tenants.

Has anyone ever done this and ran into any problems? Is this worth the hassle? Should my contractor be aware of all the codes necessary for the change? should I just keep it a triplex? or Just convert it to an SFH. I would love to hear your thoughts.

Thank you in advanced,

Hello BP!

My wife and I are new investors and are looking to buy our first property.

We want to make sure that we set up a good foundation to start our journey.

We are trying to decide if we need to start with a business entity or not? and if so which one?

From what we understand we should have a separate business bank account for our rental income. 

But do we form a partnership between the two of us to set up this business account? or an LLC or an S corp?

Can we just open a business as two sole proprietors and never set up an actual business entity between us to start?

Eventually if we want to have a LLC for liability protection can we then transfer the titles to an LLC? Will this cause problems with mortgage companies?

Hope some great minds won't mind giving great advice!

Thanks in advanced,

Alex