All Forum Posts by: Axel Norvell

@Ronald Fontenot Jr consider using creative financing to get into deals instead of conventional mortgages. I would never recommend buying a deal with negative cashflow. Betting entirely on future appreciation is not a great strategy in my opinion.

With rates and prices being high right now, numbers will just not work with conventional loans - especially on single family investments. There's several strategies you could employ to find a deal. Here's 2 creative ways to buy a property without using a conventional loan:

1. Subject To - Taking over the seller's existing loan at a lower interest rate

2. Seller Finance - Having the seller finance the deal using terms that cashflow

Feel free to connect with me and reach out and I can go into more detail, happy to help wherever I can

@Carlos Valencia - do you know of any lenders in Houston that would offer HELOCs?

I'm in a similar situation where I have a lot of equity tied up, but cannot refinance because I'm locked into sub 3% rates

What interest rate are you locked in at? If it's around 3% as Matthew suggested, that's gold right now. You could run the numbers on an AirBnB, or find a professional to stay long term and see if the rents cashflow.

If rental numbers don't cashflow, you could consider selling your condo as a wrap. You basically keep your 3% interest rate and sell it to someone else at 4-5% interest where they pay you the interest instead of the bank.

Feel free to connect and DM me if you need more ideas or help

Welcome! I actually house hacked in Houston myself by buying a triplex and living in the main house.

There's plenty of duplex/triplexes in decent areas if you look hard enough.

What I did when I bought mine was set up an automatic email from Zillow, filtered to the areas and property types I was looking for. Then I consistently looked at every property I got an alert for. I also had a realtor send me automatic emails with the same criteria from the MLS.

If you ever need help or advice feel free to connect with me and shoot me a DM, always happy to help wherever I can

@Nina De La Cruz - I ended up passing on the deal I mentioned in my initial post. While the cashflow would of been good, the headaches of dealing with a lot of people in a single living space wasn't appealing for me.

Instead I ended up buying a triplex and house hacking it. Saved up the saved income from house hacking and bought a 2nd property which I made a duplex and have rented on AirBnB + long term lease.

I now have 3 properties with 8 units with a mix of long term, short term and AirBnBs. I'm planning this year to scale up and get into apartments as the numbers just work better with larger properties, and there's less headache managing separate houses with 1-4 tenants each.

More info would be needed to determine, but based on the limited info it doesn't seem like too great of a deal.

You're taking on a 1 year note and hoping you can hit appraisal within that timeframe. If that doesn't happen, you will default and lose the property.

I would negotiate for a longer term and lower down payment. At 20% down and 6% interest, you might as well just go and get a conventional fixed 30-year...then at least you're locked into your numbers for 30 years and can be 100% confident of your numbers on close, instead of 1 year from now where the economy is changing rapidly.

If you're trying to fix up the property before refinance, see if the seller can offer you better terms to do that, put a safety net in the contract if it does not appraise for what you and the seller might expect.

Some other questions you should try to answer:
- What is the ARV (after repair value) - keep in mind most lenders will only loan up to 80% of the appraised value.
- What are the current rents and fair market rents?
- What are all the other expenses beyond your expected mortgage payment (Insurance, Taxes, Vacancy %, Property Management, Repairs/CapEx)
- What is your cashflow (Rents - Expenses)
- How much of your cash will you put into this deal? (down payment, closing costs, tax/insurance prepayments, rehab costs)
- What is your cash on cash return? 

 @Eliott Elias that would be great! Feel free to DM me their contact info, or share it in the thread here

Can anyone recommend any good local Houston lending companies, credit unions or banks that could finance a garage ADU project? I think would need a long-term loan (15 - 30 yr) for around $200k to achieve what I'm trying to do.

Garage Apartment Addition:
- I have an existing 700 sqft garage that needs a new roof
- I want to add a 2nd story with 2 x 350 sqft studio units including kitchen, bed and bath
- or add 1 x 700 sqft unit (whichever the city will allow...)

BONUS (if money left over):
- landscaping
- new driveway
- new fence
- pool remodel

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For this I want to leverage roughly $300k of equity I have built into the property. I want to avoid cash-out refinancing because I'm locked into a 2.99% rate for 30 years and I do not want to double my existing mortgage payment just to borrow $200k.

Has anyone done a project similar to this and can give any advice on how they financed the project?

With 2 additional units I would add roughly $3k / month in additional income for the property with minimum increase in expenses. $3k / month is based on what my other 350 sqft units in the area are currently achieving.

Thanks!

We never conveyed the actual utilities cost to the renter. We just set the rent high enough that would cover the utilities, and just added "all bills paid" to the listing.

Yeah so if you have two units equal in size, I'd just do:

1 Unit Rental Rate: Typical rental rate (without utilities) + 50% of all utility cost (internet, electric, gas, water).

If you're interested in having someone take over the property and letting them sublease it, send me a PM - I might be interested if the terms work. We rented several houses in the Heights for many years.

I have a similar property, and my parent's have rental many like this in the Heights.

The biggest issue is shared utilities. I typically include the utilities in the rent price as splitting the utilities every month across multiple tenants is a hassle. If you have the water and electric split between the units that's even better.

As for the mail, I've always done a shared mailbox without any issues. If the tenants know it's a multi-family situation they are usually fine with it.

Depending on your location in the Heights, you can expect to fetch quite a bit on rent. We were renting literally a single bedroom with a bathroom, no kitchen, in the Heights for $1k month, and that was this 1940's quality interior.