All Forum Posts by: Brody Veilleux

It really just sounds like what people typically call a house hack. Buy a property to live in, fix it up, then sell it later for a profit. If you’re really going to just live in it long-term, I’m not really sure about the benefit up front. You’re now paying a higher mortgage on a property that is not making money. I’m all for value-add and if you need to pull cash out to get another deal that makes a higher return then how much you pay for it, sure, but I think you would be better off selling it and starting over. I guess I would really want to run numbers to see where the benefit is.

Yes it's doable. I purchased my house at the end of 2021 for 220K, slowly updated and it's worth 320-340K. I don't know about doing a refi, I think it depends on your situation and rates. I would lean towards selling and repeating. Can stay in the same budget and use the excess to invest or trade up. I used 5% conventional. Was not a heavy rehab but it was outdated inside and out. 

Brody:

Hello from a fellow Michigander.

Prior posts and your profile indicate you are new to RE investing.  I'm hoping to help.

Your question is the kind of question a stock investor asks.  If you live in Macomb County, you already know about as much as you need to know to pick good real estate locations.

When buying a stock, the investor has no control over how well it does and we all pay the same price, so we look for stocks with hot growth prospects.  That is all you can do. In real estate much more money is made by finding great deals and making great deals.

To stick with stocks for a minute, would you be as focused on finding the "hot" location if you could find a way to buy stocks at a 20% discount?  How cool would it be with a little bit of searching and probing if you could buy Microsoft or Chase at 80 cents on the dollar?  We can do that in real estate.

How focused would you be on finding the "hot" location if, with your own efforts, you could make your stock go up in value.  Assume that you could meet with the CEO and give him some direction or write articles about how great the stock was and cause its value to go up.  How great would it be if you KNEW you could make the value of the stock go up?  We can do that in real estate.

So, back to your question.  There are a handful of areas worth avoiding in Macomb County.  Avoid rough parts of town.  Also, it is probably better to avoid the rural areas.  You've now elminted about half of Macomb County.  Everything else is fair game.  Buy where you find the great deals.  Buy the deals that you can improve to raise value.

Depending on your financing structure, as long as the lender allows it you can do it. Likely they will only allow you to live in the property once you refinance out of the debt due to rules and regulations, but you can always ask! 

Hello Brody, 

Sounds like you need to plan ahead and have a high level mortgage planning consultation so you do not run into problems and lose money. You might find a property that is not even financeable using a conventional loan. Typically these type of projects begin with hard money and then refi using a conventional loan. This is why you need to make sure you review your file prior to even getting the hard money loan because what if you do not even qualify for a conventional loan then you'll have problems and might not have a net benefit exit strategy. Get pre approved first for conventional so you know if you can use that as an exit strategy but purchase with hard money. Another option you can do is buy using conventional first and as long as you can live in it you can rehab slowly if you have the time and use money for rehab from another source if possible. Happy to connect if you would like to discuss further. 

@Albert Bui @Matthew Kwan