All Forum Posts by: Bradley Sriro

@Zachary Perrin I would recommend doing a live in flip. While the market is out of control across much of the country, there are still always deals to be had. As you are already aware, it will just take more effort to find them. If looking for homes on the MLS, I would suggest having an agent run a search for homes with at least 45 days on the market. This way you are dealing with homes whose buzz or lack thereof has already passed and you are likely not dealing with a ton of competition like you will with some of the other "pretty" homes.

If you can successfully locate a deal that you will live in, you will be able to get into it using an FHA mortgage with 3.5% down or maybe a 5% conventional loan if the seller won't accept an FHA buyer. This should allow you to use more of your capital toward the rehab. If you are handy at all and willing to put in some sweat equity, this may also be accretive to your bottom line. The benefit to going this route is that you are not under the gun for paying back a hard money lender and you also have a place to live while completing renovations. One of the biggest benefits with this strategy are the tax benefits... With the current IRS home sale exclusion from capital gains, if you live in the home for 2 years and have a capital gain from the sale of this home, you may qualify to exclude up to $250,000 of that gain from your income if you are single, or up to $500,000 of that gain if you file a joint return with your spouse ( IRS Topic 701 - Sale of Your Home ). While not as quick as a standard flip, this strategy can be a very powerful way to create substantial and possibly tax free gains. 

The other option as someone else mentioned would be house hacking. Although there may not be a large inventory of multi-family in San Antonio, you can also house hack a single family... assuming you are personally ok with it. Ideally you would want to find a single family home that has an in-laws quarters, a guest house, or an ADU (Accessory Dwelling Unit). If you are single, you can live in the smaller unit and rent out the main home or vice versa if you have a family already and need more space. The same tax benefits related to capital gains would apply with the sale of this home also as long as you live in it for 2 years. You can still of course look for a property like this that would be a value-add proposition. This way you can force some appreciation and maybe unlock some equity to play around with with by tapping it with a HELOC.

It sounds like you are pretty determined... with that being said, there are quite a few options out there for you. In the meantime, just keep educating yourself and try to find an investor friendly agent in your local market that is willing to work with you. I hope this helps... All the best!

Hey @Andrew Masky, welcome to BP! If you are planning on living in the unit initially, you have a few financing options. If you are looking for a studio or 1 bedroom, you will likely have to go the condo route. With condos, unless they are Fannie Mae approved, you will have to put down 25% (or do a first mortgage of 10% down with a 2nd mortgage for the additional 15%). If they are Fannie Mae approved however, you can get away with an FHA or Conventional mortgage.

If you decide on a 2 bedroom, you may be able to find a nice townhouse with a budget of $400k. With a townhouse (lot & block), you will have no problem using an FHA or Conventional loan and the down payment requirements are much less... With the FHA option you can do as little as 3.5% down, and conventional 5%.

Your ability to get into something is dependent on a few different variables though. While you can do as little as 3.5% down with FHA or 5% with conventional, in the current market environment that may prove very difficult. From what I am seeing right now, sellers are avoiding offers with low down payments and opting for buyers with larger down payments or who are paying all cash. It is a difficult time to be a first time buyer now unless you are able to put together a very solid offer with a very strong down payment. Depending on your situation, this may or may not be an issue.

With regards to renting the property out after 1 year, it is very unlikely that you will be able to cash flow the unit with a tenant on a standard 12 month lease. If you go into a condo, this is especially true because they often have substantial monthly association fees which ultimately take away from your bottom line. Short term rentals such as AirBnB are an option to generate a higher return; however, you have to be very careful to make sure that STR's are allowed in the building, community and/or municipality.

I hope this helps! 

@Remy Contreiras here is a link for some resources that I think would help you. The digital flash cards are really good. But any of the options would be useful. There is a small cost involved but I think it would be worth the investment to make sure you pass. 

State of Florida RE Exam Prep

Hope this helps.

@Firas Rabbat as @Carlos Rovira mentioned, the Miami market is very difficult to cash flow... especially when it comes to single family. While you may not generate cash flow, all of the areas you mentioned benefit from significant both current and historical upside appreciation. 

I would argue that it would be a much better investment to purchase something for yourself in one of those areas instead of using your capital to pay rent that ultimately benefits only the landlord. You get 0% ROI for paying rent while purchasing will give you several benefits including asset appreciation, principal pay down, and tax benefits/ depreciation.

Once you move out in a couple of years, you can re-evaluate the property to determine if it makes sense to keep it as a rental (in which case you still get all of the above benefits; however, the tenant is now covering the principal pay down), or sell it and capture the potential gains from the property's appreciation. Regardless of which you decide, I believe that your capital will serve you better investing it into an asset instead of using it to pay rent. Hope this helps!

Hey @Evelyn Castillo I am also close by in the Redlands... I completely agree with @Timothy Lewis The market and prices are currently out of control! Even a small single family home in the Homestead area (which is cheaper than most of Miami-Dade) will run you $300k easily. 

So going the FHA route with closing costs, you are still looking at around $22,000-$24,000 to get into something. That is not a huge amount but for a first time home buyer, it can be a challenge to many. Don't forget the bidding wars that are also going on now with the extreme lack of inventory & excess amount of buyers. Many nice homes are receiving 15-20 offers and selling significantly above list price with appraisal contingencies waived. With that in mind, a $300,000 house in Homestead likely will not generate any profit for a house hacker. If you are lucky, you can create a separate in-law quarters or efficiency like Timothy suggested but that will only cover about half of your mortgage.

If privacy isn't that big of an issue for you, you can always rent out rooms for a better ROI. It isn't for everyone though. In South Miami-Dade, you can get between $700-$1,000 for a private room with shared access to bathrooms & kitchen. Hope this helps!

Send me a DM @Leslie L Meneus, I might be able to help you out. 

Sounds good Melanie... I will give you a call tomorrow. 

Looks nice @Melanie Horowitz, what platform(s) are you going to list it on? How have your bookings been so far on your STR's? Do you own in the upper, mid, or lower Keys? I have been considering doing something similar in the keys myself.

If there is anything I can do to be of assistance, feel free to send me a direct message. I would be happy to assist you. 

@Ryan Allison you're welcome... Creative financing including the subject to strategy can be very powerful in helping to grow a portfolio quickly. Keep learning and looking for deals!