All Forum Posts by: Brandon Morgan

@Brandon Morgan What is the most important thing when buying RE?... Location, location, location. 

Regardless of condo or SFH you need to KNOW which locations are BETTER and why. You need do the market research and follow a strategy. What you described is a 1-3 year plan where your leverage an FHA loan, move out, rent it, and buy another property. It's similar to what I did when I bought my first SFH only I used a conventional with 5% DP. I used the rest of my savings (every dime) remodeling the property. I then refi'd the property and put some capital back into my pocket.

Every market is different but in our market single family is more desirable. Our houses are spread out and the city is pretty car centric. People like privacy, fenced in yards, garages, and basements to store their junk. You don't always get those things with a condo. SF appreciates faster than condos. Without knowing your market I'd spend 75% of my time search for SF, and 25% searching for condos. 

I would also agree. A multi would best.

What strategy are you looking to execute long term? 

A lot of my client's initial goal is to cash flow net zero in a duplex while living in one of the units. I'm in Seattle where is market is expensing and competition fierce. What I have seen work instead is jumping into a multi that needs work with negative cash flow, creating value and raising rents.

Although the cash flow is negative in the short term, it much better then paying full rent. Over time, 3-5yrs typically, the cash flow improves to positive, and the equity appreciates significantly.

Hi Brandon! I have lived in 3 houses over the past few years and house hacked all of them - all single family homes. As you said, reasonably priced multifamily properties are hard to come by in many markets (I am in Denver and that is the case here), so SFH is the more affordable option. By making it your primary residence you can also put as little as 0%-5% down, depending on the lending program. We would look for homes with a space that could be separated so we didn't have to share space with our tenants. This could be a basement, upper level, wing of the house, apartment over the garage, etc. - any part that can be accessed separately. Denver homes commonly have a separate entrance to the basement, so that is the form ours took. You can then rent this space out as a long-, medium, or short-term rental, based on the strategy you like. We do STRs because they generate the most cash flow and are allowed in our area. We have consistently covered our mortgage for the past 3 years using this strategy! Hope that helps!

@Brandon Morgan For house hacking I'd suggest looking at single families or multifamilies rather than condos. I know you said the supply is low for multifamilies, but you could consider looking off-market. A duplex for a first hack is a good option. Best of luck 

Hi @Brandon Morgan house hacking single family or multi family work in NJ.  single is a really good way of building equity to get to a long term buy and hold Multi.  Both strategies work.

I agree with @Jimmy Bostic.

I'd shy away form Condos:

- They tend not to appreciate as fast of SFRs or multi

- HOA fees and assessment can eat you alive. I also see it as a reserve which you do not get back when you sell if unspent.

- Loss of control.

I got started with a multi where the cash flow subsidized my mortgage. I forced equity and raising rents and the rest is history. A solid SFR with rent by the room is also a great option. Find one that needs a lot of work.

@Caleb Brown

Condos can potentially be a good investment but there is risk that comes along with them that needs to be considered. One big upside to real estate is that your revenue (rent) appreciates over time while your mortgage payment remains fixes except for insurance and taxes that can appreciate as well. By purchasing a condo, you will need to deal with another appreciating cost in HOA fees which can slow or eliminate your cash flow. You would also have to follow any guidelines set for by the condo HOA so getting a feel for the management is crucial. For example: how do they feel about short term rentals? How do they feel about renters in general? Condos can still be a good investment, but there are just other factors and due diligence that need to be observed when you are entering that market.

People have done well with condos. Good part about them is low maintenance and usually quality tenants. But they are risky. The dues can get insane. They could vote against rentals or do a major repair that you have to chimp in for. I would rather do single families, you have control over it.