All Forum Posts by: Austin Negron

@Jonathan Bombaci Hi Jon. I appreciate the reply and insight. You bring up some good points. My main point was that the most realistic investment is a 2-family and this provides more flexibility because of all the reasons you just mentioned. I wouldn’t say it’s exactly common to find properties that easily pass self sufficiency. If I am mistaken, please send them to me and I am happy to give you a referral fee 🤣

I think it depends on investors timeline as well. If they’re looking to get their first property over say, a 6 month span, then that would provide more opportunities to find the best situation which would be a 3/4 unit. But if someone is adamant about getting into a property within say 2 months, it may be more *realistic* to look at 2 families. Thoughts? Agree?

Come one come all! Come ask your questions. Let's make some money. 

The biggest question in the real estate industry right now is if the market is going to crash in 2021.

My personal prediction is that there will probably be a correction (especially in the Boston market as we will probably see a shift to a buyer's market) that will cause property values to decline but I wouldn't go as far as to say that the market is going to crash.

I think the stock market would crash before the real estate market.

Here's an article with some other people's opinion and insights:

https://www.mashvisor.com/blog...

What are your thoughts & predictions?

The average salary for a software engineer in Boston is $117,000.

Let's say $86,000 after taxes.



And let's say you're currently paying $2,000/mo in rent - $24,000 down the drain/year.

SWE's are positioned very well to get pre-approved - job security, good income, and assuming good credit.

You can use an FHA loan which is 3.5% down.

This is one aspect of leverage in real estate because now you can afford, let's say, an $800,000 property with only putting down $28,000.

And say this is a 2-family property, where your tenant is paying you rent every month. This rent goes directly to paying off your mortgage.

Now, let's say the left over payment on the mortgage and all other expenses is $2,000/mo.

Now you are in the same situation as renting, expect now this monthly payment is contributing to the equity in this $800,000 property that you acquired for $28,0000, not to mention that your tenant is also helping you contribute to this equity as well. And you reap the benefits of appreciation on the backend (no pun intended) of the deal.

Another key advantage is that you are not locked into this location for the rest of your life...you only have to live here for one year, and then can rent out it out for the rest of your life.

Hope this helps!

And we haven't even talked about depreciation yet...

Hi Lien. This is a good addition. In your opinion what are the pros & cons of MCL compared to traditional FHA? I haven't worked with MCL before so interested to hear your insight.

I'm a strong believer that a house-hack is one of the first steps to wealth and financial freedom.

However, this one rule is overlooked and constantly kills deals before they even happen:

The self-sufficiency test.

I talked about how we can leverage an FHA loan to put 3.5% down on a home.

And a small multifamily property is the ideal situation. This would mean properties that have 2-4 units.

However, there is this quirky rule that applies only to 3&4 unit properties - it must pass the self-sufficiency test.

In order to do this, you'll need to prove that 75% of the rental income you’re likely to receive will exceed the full monthly mortgage payment.

For example, if the monthly mortgage payment is $3,000, this means the property must produce at least $4000/mo in rent ($4,000 x 75% = $3,000).

In short, it basically means that the income brought in from rent will cover the mortgage.

However, in a market like Boston, this isn't a common situation because property values are high & the cash brought in from rent rarely meets this requirement.

This means that the most realistic outcome is to purchase a 2-family property for one's first house-hack because SS doesn't apply which allows for more flexibility for getting your first property.

Hope this helps!

#househack

@Jonathan Hyatt hi Jonathon. Christian Jack & I have been hosting a monthly meet up down in Kingston. We’re hosting the next one in January. Stay tuned!

3 Ways Struggling Realtors Can Improve:

1. Lead Gen Strategy:
Paying someone to run digital ads for you is not effective. Potential clients don’t want to see your ads pop-up. This market is saturated & everyone is doing it. Organic outreach is key for fostering genuine, lasting relationships.

2. Being sales-y (sale-sy?):
Buying a house is stressful enough, the last thing clients need is for a pushy agent to pressure them into buying a home or ‘convince’ them to work with you. If they want to work with you, they will.

3. Understanding the numbers:
Whether dealing with investors or home-buyers, buying real estate is an investment. It is imperative to have a general understanding of the economic output of the homes you suggest for them to take a look at. 

DM me if you want to chat about some creative strategies that have helped me so far.

Real estate can be overwhelming.

These are generally the first 3 steps for preparing to buy a home:

1. Check your credit score. The better your credit, the lower the interest rate on your mortgage. The interest rate you pay on your home can drastically affect the numbers behind the investment.

2. Get a pre-approval letter. This just means calling a mortgage company (or a few!) and they will give you a gauge on how much you can afford. This will also show sellers that you are serious about purchasing a property.

3. Find a good realtor. There are a lot of good agents, but there are also a lot of bad ones. It's imperative to have an agent you like, trust and can rely on. You will be working with them a lot so you'll want to have a good relationship with them and be confident they prioritize what's best for you as opposed to what's best for them.

Hope this helps!