All Forum Posts by: Brad Jacobson

Hey @Mike Finn,

HELOCs are interesting in the sense that the lending standards are very local.  They're much more local than traditional nationwide refi standards. Each credit union will have a different process so I'd encourage you to keep poking around and see if there is an available line of credit with more normal rates.  

Your HELOC won't likely unlock more than 80% LTV of funds so you could consider selling one of the two properties. If I'm guessing right, you have a good chunk more equity than just 20% so unlocking all of it may not be a bad decision. I sold two of my eight properties last year to unlock more capital and get my foot in the door for bigger purchases.

Good luck!

Hey @Kristin Riker,

This might sound contrary to other great responses but I'm not completely opposed to purchasing deals that lack cashflow when you're first getting started.  You have to plant seeds somehow. 

But due to the lack of cashflow on this one, will have to consider a purchase like this as an expense.  Like Rich Dad Poor Dad teaches, buy assets (adding money to your budget), not liabilities (taking money from your budget).  The numbers you've shown here are going to be a liability.

What concerns me the most here is that your downpayment of $165,000.  That large sum of money could be used in much more effective ways.  You could buy, with all cash, one or two simple properties in a rental market like Memphis.  That would give you something like $1,500/month in cashflow. 

A cashflow neutral property like this should only be acquired for cheap so your cash-on-cash return can still be something.   I'd encourage you to use that $165,000 another way that will yield faster and less speculative returns. 

Good luck!

Don't forget that a good house hack doesn't always have to be a legally zoned multifamily property.  

Many cities allow "accessory dwelling units" in residentially zoned single family houses. ADU is just the fancy word for mother-in-law apartment. This will open up your options tremendously when looking for a good house hack.

Personally, my wife and I live in a single family home but our city allows "ADUs" so we simply bought a home with a separate entrance and second kitchen and rent out that space.  The house wasn't listed in any special way, we didn't pay a premium for a multifamily, and we got a great deal on it.

Good luck!

I can provide insight into the Utah market - Utah saw wild appreciation over the past three years.  The median house price doubled or more.

However, Utah is seeing a rather significant correction.  The majority of listings have received a price drop and some of the buyer's I'm working with are getting homes for much lower than they could have a few months ago.  Recently I had a pair of buyers win houses $80,000 and $110,000 under the original list price.

I would expect that if rates continue to rise past 6% that prices will continue to correct.  However, there's still plenty of demand so I don't see anything more significant happening than the price corrections we've seen over the past six months.

Personally, with rates around 5.5% and prices dropping 10-20%, I think it's a great time to buy.  Better than any other time we've had in the past 12 months probably.

Good luck!

Hey Nicolas,

The golden nugget I've learned recently is the concept of "Who Not How."  If you're interested in doing self-storage, you'll need to find someone who either owns self-storage units or who has built them before.  

Find someone doing that in your market, take them to lunch, ask them specifically what they need to move their business forward, and then go solve that problem for them.  It will likely require you go find a deal, or private money, or something like that for them but if you do it, you'll break down the walls that are keeping you from doing your first facility!

Good luck!

I agree with the lack of direct impact but it's really interesting how all markets tie together.  Having bonds drop further would definitely further worsen investor sentiment here.

I do think another direct impact could be overall market sentiment.  I know the US's housing crash of 2008 sent shockwaves through the entire world's economies.  We'll have to wait and see if China's housing market can have a similar impact or not.  

Hi BP Community,

For discussion purposes only - 

News of the large bank failures and pending bankruptcy of the major real estate developers in China is looking serious.   

If these massive developers do file bankruptcy and greatly disrupt the Chinese real estate market, what effect, if any, do you think this will have on our real estate market?

Hey Cameron!

That's so cool.  We need to connect.  I house hacked in Layton for a few years, made that house a rental, moved into another house-hack/ forever home in North Ogden, and after sitting on the Layton house for another two years, sold it for a really nice tax-free profit.  

There are definitely good options you've proposed. Keeping the property as a rental will work if you can get zoning to comply with the ADU or I'm sure there's still plenty of good options of places to put the big, tax-free proceeds you can get from the sale.

I also help run NUREIA (Northern Utah Real Estate Investors Association) and you should totally get involved with our monthly meetings in Ogden as well.

I'll DM you! 

Thanks,

Brad

There should be a huge demand around that Norte Dame college area so it's very likely your rent is either way too high or the marketing avenues you've used aren't effective.

I usually market my rentals through the Facebook Marketplace and Rentler so if you haven't used those resources yet, I'd recommend them.

I also fully agree with @Shane Kelly and @James Wise that if you want to do this for a longer stretch of time, find buddies you like and make the house hack fun.  I rented rooms out to my cousin and two good friends for over two years, had a blast, and lived for free.

Good luck!
 

If the addendum, signed by all parties, enforces settlement by a certain date, then yes, the contract should be legally enforceable.  

Legally, enforcing a contract is a pain since you'll need to get a real estate attorney involved so it's likely much easier to just wait it out until they comply.  

That's pretty bizarre though so I'd like to see what others comment.  If you're licensed, what has your broker said about the situation?  Has the buyer's title proposed any solutions?