All Forum Posts by: Brock Pellerin

@Curt Davis - Thanks, I will definitely take note of that. 

@Jaysen Medhurst - Do you typically lean towards credit unions or big banks for FHA loans? Also, going the conventional route, how low can typically go? 10%? down?

Hey everyone,

So I'm looking into house hacking in Orange county and I have a few questions. 

1) Can I bundle the closing cost into an FHA loan? I life in an expensive market living in Orange county and after looking into it, closing cost was a little more than I anticipated and I was wondering if I can including the closing cost as part of my loan.

2) Can I do the same with the upfront mortgage insurance payment?

The end goal would be to refinance out of the FHA loan after a few years.

3) What point in the process do I start the process with the bank once I have found a property that I like, or is it best to include said bank at the very beginning?

4) Lastly, for a property inspector, where in the process do I include an inspector before closing on a deal? Is it when I'm looking at the property or is it after the purchase process starts and the deal is contingent on an inspector?

Hope everyone is having a great week and is staying safe!

I heard on a podcast a few months ago that Indiana has a property tax rule where the property tax for out of state investors was about 2% vs in-state which was about 1%. How do you find this? Is it a website or do you have to go to a state's individual tax laws to find this out?

Hey everyone!

I currently live in Orange County, California and my lease on my apartment ends this fall.  

I am currently looking into two possible scenarios for my first deal, they would require roughly the same down payment if I do a traditional on scenario 2.

Scenario 1 - House hack

Most of the small multi-family in Orange County run at $800k+ which would be a down payment of around $30K + repairs, with an FHA loan would be about $5K a month mortgage. After looking for a bit and running some numbers, the best route seems to be for me to get a triplex or a quadplex which would produce the lowest cost for me after all the rent from each unit. My goal is to have less than $1500 leftover for me to pay since having my mortgage covered completely would be difficult in my market. The ideal goal is under $1K

Mortgage - rents from 2 units = my cost

Target - $5K to $5.5K - $4K = <$1500

Goal to own this property for 2-3 years, which would result in $5K * 24 months = little over $100K equity. Then either sell the property or move out depending on if it would cashflow or if I wanted to use that equity to buy more properties. Between that and saving I can have about $200K cash in less than 3 years, it would just be difficult to buy another property during that time, I would just have to get creative.

Pro - quick equity building

con - no additional cashflow

Scenario 2 - Out of state 

This route is a little more straight forward but I would look to find a market, which I have already done a good amount of research, and start off with a single property, shoot for $200 + cash flow and buy a second property within a year of the first

Looking at houses in the $50K to $150K with $10-20K in repairs, the less the better for my first property

pro - start to build monthly cash flow which would result in buying the 2nd, 3rd, ... property quicker

con  - slower equity build-up and would still be paying rent for my personal residence

I would love to know everyone's feedback and advice on which route would produce the best long term wealth.  My initial thought is to house hack, but I can see advantages to both.

Thank you all in advance,

Brock

Can't wait to learn and connect!

Hey Everyone,

My name is Brock and as you may be able to tell, I am looking to purchase my first real estate property this coming year.  I have been lucky enough to meet a girl, who is my girlfriend and future wife, who is as just into real estate as I am.  Over the last year, we have been getting our personal financials to straighten out as well as continuously educating ourselves on the topic at hand.  We also plan to attend as many Meetups as possible and network.  We just starting practicing analyzing deals and plan to analyze a minimum of 5 per week if not more.  

We are currently looking to invest out of state in either SFH or small multi-family. We are currently targeting the state of Indiana since we have some friends out there that we can use as local eye and ears.

We are doing our best at the moment to save as much money as possible in order to fund the deals ourselves but are also open to a third partner to help fund the deal to help speed up the process. 

Thank you for reading this and we look forward to connecting with you.

Best regards,

Brock

Hey Everyone,

So my girlfriend's mom is looking to sell her home right now and we are interested in buying it.  The house was originally purchased for $120,000 and after remodel can sell for about $150,000.  Her mom has about $8,000 left on the loan.  it is looking to rent for $1300 based off of neighboring prices.  The advice we are looking for is if we decide to acquire the place, which would be the best approach.

We can pay off the rest of her mom's mortgage and then split the profits with her. Or we can outright buy the place.  (we will have to run the numbers to see if the place will cash flow properly. 

Any other ideas or advice is welcome!

Congrats man! Just starting my journey and with a lot of hard work, can do this too!

Hey @Joe Homs, thanks! I will start looking into meetups and start attending! What is your knowledge of people trying to House Hack in Orange County? I'll PM you on looking into meeting up for coffee.

@Jack Butala Thanks! Just trying to save as much money as I can at the moment and consume as much as info as possible.

Hey BP,

My name is Brock and I am looking to start my Real Estate Investing Journey.

A little bit about myself.

About three years ago, I started getting into reading books, mainly personal development books. In my first year of reading, I fell in love with reading and read roughly 25 books while studying Electrical Engineering. I graduated 2 years ago and have been working now for a little less than that making solid money as an engineer. After my first year of working I had less than $1,000 in savings when one of my close friends making roughly the same amount saved $10,000. I knew I needed to get better at my own finances and get smarter with my money. I started putting my focus on finance books and podcasts and started to develop much better spending habits. I went from saving 1K in the first year of working to about 5K in the first 6 months of my second year. That combined with a graduation gift from my grandma for investing, I have about 15K, mostly in index funds. I read some of the real estate investing motivation books that everyone knows and loves and my interest in real estate has grown greatly.

Having about 15K in the bank and saving about 1K per month, I will have about 20k by the end of the year. I currently live in Orange County California, so as everyone already knows investing in my local market is tough. I understand the approach of house hacking into a 2-4 multifamily, but upon first glace it is tough to find anything. I will continue to look to do house hacking but want to start focusing on learning about out of state investing. I am currently reading David Greene’s Long Distance Real Estate investing to learn the basics.

I would greatly appreciate any advice or book recommendation on the topics and if anyone who is local, I would love to chat and maybe meet up for a cup of coffee.

I try to listen to a least 5 podcast shows a week from BP.

Thank you,

Brock