All Forum Posts by: Alfredo Rodriguez

House hacking it's a great way to get you starting thinking as an investor while acquiring an asset, buying real estate. Buying a home that have an ADU,or extra rooms that could be convert in a mother-in- law suite, or the ability to built an ADU, mother-in-law space could be awesome. It can allow you to live in a better zip code than you want to live or allow you to have more options. This additional rental income that you will get by renting out this extra space to a friend, family, co-worker or a completely stranger could be a life changing situation for many. The way in real estate to become financial independent is when the cash flow of your assets pays your current standard of living. Where do you want to live ? What do you want to drive ?

“How you want to live can help you built your portfolio based on who you are and where are you going.”

There is a new program that I recently came through that I love. This program will allow you to buy a residential home owner occupied with only 1 percent as a down payment. These programs work for people where their salary can not be more than 80 % of the median income. Here in Tampa Bay, Hillsborough county, Pinellas County and Hernando county these median income required are $72,500 dollars max salary allowed to qualify. Must check for each individual area as it may change. Also this is based on a 97% LTV and the 2 percent they are giving you back will be add to your loan up to a total max sum of $4000 dollars.

PURCHASE PRICE EX 200k x 3% DP - 2% ($4000dollars) = total Down payment need it of $2,000 dollars . Closing cost are not included it. CLosing cost can be negotiate.  

This programs works awesome for certain areas here such as: New Port Richey, Port Richey, Lakeland,  where you can still find houses with prices still in the 300’s here in Florida. The right buyer can get a home with little money as closing cost can be negotiate as well and start building wealth. Conventional guideline Freddie Mac and Fannie Mae max amount of money allowed than you can get from a seller is 3 percent on a conventional loan. This is a conventional loan program and minimum credit require is 640 plus. However, been conventional product you will have to pass DU or LPA approval. This means than Freddie or Fannie will have to like it lol. As they are the one who are going to buy it so it must meet their guidelines.  If everything lines up it’s crazy how you can get a property with less than $5,000 dollars down. This will start you building wealth for your future. You have to live in it, homeowner occupied property but after 1 year you can rent it. You can buy another home and/or rent this asset you now own.

House hacking it also a  great way to test your abilities to see how well you can deal with property management. You may decide to manage your properties or find a great property manager than may do this for you. When you rent a portion of your property now you have a tenant to deal with. Depending whether you choose to rent space  long term or a short term. You must decide which makes more sense for you based on design and lay out of your property. As you know there are platform that will allow you to rent part of your home or a room for a minimum set time, and price. Please check with cities and municipalities to be aware of rental restrictions. They have establish minimum nights allow to rent. Some varies from 7days, to 30 days, to not restricted.  

“As long as you find a way for this asset to get paid off every month you are building wealth specially if someone else it’s paying for it.” 

What has been your experience with house-hacking ?

Hi Jorge 

In my experience here in the Tampa Bay Area usually it just come down to comps in the area. Even in a purchasing agreement or a refi, a good appraisal will only take in consideration those property which he decided that are good comps or not. For me as a real estate broker a good comp it's a home with similar characteristics such as as your subject home.Those are most likely as you are aware year built 10+-, similar square feet 100 to 200 sqft -+, distances from subject property must likely will be a 1 mile or less, the closer the comp the stronger. Is as they like to see what's happening in the neighborhood, type of construction, usually not crossing any major river or intersection, type of finishes, remodel or not remodel,etc. But as we can give our BPO or CMA recommended listing price it still our opinion of value. So, an appraisal is just that. An opinion of value of the subject. Two people can often use the same comps and come out with an slightly different opinion of value. I had appraisals come as lower as 30k and also some come higher than 30k, while helping others buying or selling real estate. It's an art. Even in both cases comps were there to support such value but the appraisal it's always going to consider their own opinion of value. They represent the lender and want to make sure lender is not overpaying for the property. We also had dispute many of low appraisals. Many time the appraiser may consider your comps if he is a person of good character and recognize that he could have use better comps. As more often, they just stick with their original opinion of value of said subject.

My experience has been that every transaction is different and you must do your best in overcome any objection that may come with every transaction. We feel extremely please when we can make everyones dream become a reality. As long as we can get to the closing table with agreeable terms. Everything can happen in a real estate transaction and an appraisal it’s usually an issue we are recently dealing with quite often as sellers wants to sell real high and buyers wants to buy the lowest possible. So I love the fact to have a third party saying this is it, lol. Always when win, win situations are created for everyone the transaction has fully closed! It’s always a great way to serve others in this huge industry of real estate and learn from other people and our own experience .

What has been your experience ?

Hi Rhea 

Are you doing the rehab and then resell it or are you wholesaling it as is ?

If you want to wholesale this property as is let me know I have a few investors in the area that may be interested! 

When it comes to rehabbing budget it all depends on your scope of work. Only estimating $45 dollars per square feet will not be accurate since it all depends on the finishes as well and the type of rehabbing you have ahead. Try to get at least 3 quotes from different contractors (contractor bids)this will give you an idea of rehab cost in the area. Must 1958 houses have cast iron pipes and wire is outdated. Make sure plumbing and electrical are as you said fine because most of this older properties unless it has been already update they aren’t fine and cost of rehab can be tremendously including permitting and time . I’m local and my office it’s in Carrollwood Tampa. So if you need any assistance i can definitely help.

I currently have a 4 plex unit near bucs stadium in Tampa FL. In this 4plex 3 of the units are rented through STR (Airbnb, VRBO) the four unit I have it rented to a tenant with a 1 year lease. 3 units- STR bringing 2100-2400 a month as gross income with 85 %-92% occupancy rate. Net income is around 1800 per unit. The one year lease tenant it's paying $1600 per month regular rent share based on condition of this property. All for units are fully remodel.

I currently have a loan @ 7.5 percent 30 yrs amortized with a 3 year ballon. Crushing some number been conservative I believe I can sell this 4 plex for easily 800k. I don’t want to sell it however i currently own a note for 475k. So maybe cash out refi and recoup some of the cash I have on this deal. Initial acquisition was $650,000 dollars. We invest 25 percent down and have spend around 20k per unit in rehab. Thought…

Is there a way that a lender will consider my STR income based on what it's bringing and help me get a DSCR loan in the property ?

@Joe Villeneuve I have been thinking a lot about on day maybe selling my airbnb business. I currently own 7 properties and all of them will be airbnb or STR pretty soon. Right now 4 of them are already bringing income and are title to an LLC. Is there a way to know the value of such business and sell it eventually including the real estate. Numbers has been awesome as far as occupancy rate and income so far ?

Not sure since STR is not always take in consideration with lenders how to approach this. Off course I will still have to finish my remaining 3 units and renting them as well or should I keep them … many thoughts lol

You can find a lender that can still give you up to 70-75 percent of the market value and give you whatever equity you have back. Now your new monthly payment will be higher that what your currently mortgage is since interest rate may be potently doble of what you currently getting. So if you like to keep this properties and get some money back you have to find a way to make this homes cash flow a little stronger. You can do it through Airbnb, or any type of STR platform. Even a midterm rental furnished. This way when you cash out you can get 40-50 k maybe per unit and use this to invest in your next deal. Make sure your getting returns on your current houses that will pay out this new mortgage and cash flow some extra income. There are many ways you can continue investing based on your situation.

You can find a lender that can still give you up to 70-75 percent of the market value and give you whatever equity you have back. Now your new monthly payment will be higher that what your currently mortgage is since interest rate may be potently doble of what you currently getting. So if you like to keep this properties and get some money back you have to find a way to make this homes cash flow a little stronger. You can do it through Airbnb, or any type of STR platform. Even a midterm rental furnished. This way when you cash out you can get 40-50 k maybe per unit and use this to invest in your next deal. Make sure your getting returns on your current houses that will pay out this new mortgage and cash flow some extra income. There are many ways you can continue investing based on your situation.

There is always deals to find if you search on mls on marketor off market with Wholeseler. I have seen a few of them and would love to connect. However finding the deal shouldn’t be as difficult as making the numbers works depending on your exit strategy.

 Hello Jonathan,

I would love to get more information regarding any product that can help me getting refi. What's the best way to connect with you or your team? Thanks 

Recently bought this fourplex (4 units) well locate in Tampa Bay near the stadium. All units consist of a 2 bedroom and 1 bathroom. Full living room, small dining room space and a full-size kitchen. Property is in need of a few cosmetics repairs as well as an installation of a central HVAC unit. Previous owner kept it in good overall standard however it needs to be updated to make it looks awesome again, based on industry Airbnb standards. We would install laminated floors throughout it. New kitchen cabinet, updating light fixture and plumbing fixture, new tile, new bathtub, freshly texture and paint. With beautiful tile work in bath, new bathroom cabinet. Hardwood kitchen cabinet, and new granite countertops. New light features and plumbing features. 
After all rehabs set and done in 4 units, we will have used of our money around 20k per unit since they are small around 80k rehab budget plus around 200k acquisition. 

We bought this 4 plex and have a substantial amount of cash in this deal which implies a lower monthly payment. Each unit has 2 bedroom and one bath. Also, a full kitchen with access to a small private back yard or patio. In this area Airbnb will get at least 100 dollars per night maintaining a 95 percent occupancy rate based on similar properties in the area. This portfolio can contribute of a potential monthly income of around 10k. My question on this post is?

Currently monthly payment is P.I.T.I around 4k a month on a 7.5 % fix interest rate for 3 year, after 3 year immediate pay off or refi balloon rate non-QM loan or private money. No pre-payment penalties looking to refi right after the rehab period. 

Should I find a way to cash out and get at least 200k invested back to reinvest (liquidity) or keep the convenience of a lower monthly payment when I refi?