All Forum Posts by: Chirag Shah

@Chris Youssi, are you suggesting the FHA option. If so, I'm leaning towards it, as that might be the most reasonable based on circumstances/timing.

@Scott Fehrenkamp my duplex is in NE Austin off of Manor. The neighborhood is in transition and hence I've had to make some sacrifices. Overall, the hack has gone well, and I anticipate living here until I can find a tri/quad plex to hack next.

@Stephanie Medellin this is a great point. I need to look! I am almost 90% certain it states 6 months, but will confirm. Appreciate the advice. Also, wanted to connect with you offline as you are a lender that understands investors preferences.

 @Nathan Gallup see ya on Sunday!

@Anna Buffkin just to verify the process - you buy at one price ($100K), equity builds up, you take a heloc on that equity to submit down payment on another property. Assuming it's the difference between you're current 80% LTV at 80K, and the 80% LTV of your appraisal at $142K, you'd own a heloc of 33.6K (113.6-80). After using that difference, you purchase another property, worth roughly $120K. Then, you refinance. I might have just complicated this, but I'm a bit confused what the steps are here. Are you only able to refinance if the appraisal and purchase have a substantial differential, such as in your example?

Hey All,

I recently purchased a duplex that I am house hacking in Austin, TX. So far, it's been a good decision in that I've been able to learn landlord basics, how to do a cosmetic rehab, and live extremely cheaply. When I move out, I'll be cash flowing approx $200/unit. I utilized conventional financing at 20% down to avoid PMI, so it ate a lot of my savings. FHA might have been better here, but I've lived and learned.

I wanted to pose the question of how I should move onto how I can finance my 2nd property as soon as I can. My preference is for residential multi-family at the moment. I'm having difficulty assessing if I have financial options, and which ones I should take seriously. 

My personal finances are as follows:

• $11K in savings
• The property was assessed at $280K in January per a bank appraisal. A tax appraisal assessed it as $315K recently. 
• $10K in IRA/401K
• $3K in Gold/Silver

These are the options I am considering:

1. Save until I can comfortably acquire another property in CTX or OOS. Looking at residential multifamily, I'd need roughly $50k for a decent investment at 25% down. I would wait for 1-1.5 yrs or longer.

2. Save until I find another duplex to house hack in Austin, TX. Austin is booming and prices are outrageous, but I could consider an FHA to get into residential multifamily at $350-400k at 5% down. I would wait for 6-9 mos. to acquire with this and consider duplexes to triplexes.

3. Apply for a HELOC at 4.75% as my property received a tax appraisal of roughly $35k higher than my market price. Assuming this is untapped equity, I could take it at 80% LTV, and get $28k for down payment. Coupled with 12-15k in savings I could acquire again within 3-4 mos.

Are these my main options, what am I missing? Is this a good perspective on my strategies? Are there financial strategies I'm not considering?

On a side note, I am a W-2 employee and have a 740 credit score. 

Thanks for your help, BP members. I look forward to hearing your thoughts. 

In regards to my options, I understand there are a lot of strategies for additional acquisitions. But, I'm asking in relation to property #2. 

Thanks!

Hey All,

I recently purchased a duplex that I am house hacking in Austin, TX. So far, it's been a good decision in that I've been able to learn landlord basics, how to do a cosmetic rehab, and live extremely cheaply. When I move out, I'll be cash flowing approx $200/unit. I utilized conventional financing at 20% down. 

For some more context: I've been immersed on BP forums, podcasts, and books and am eager to acquire another property in central TX or near my hometown in FL. I've established my goals/business plan and have decided to begin with residential multi family (2-4) units, then move on to small multifamily. My numbers might be completely off (and this will likely be worth another discussion), but I need roughly 120 units, to cashflow an average of $150/mo to earn $220k annually. My time horizon is 13 years. 

All this said, I wanted to pose the question of how I should move onto my 2nd property as soon as I can. 

I think I only have a few options, but want to know if theres more I'm simply not considering due to inexperience.

 1. Save until I can comfortably acquire another property in CTX or OOS. Looking at residential multifamily, I'd need roughly $50k for a decent investment at 25% down. I would wait for 1-1.5 yrs or longer.

2. Save until I find another duplex to house hack in Austin, TX. Austin is booming and prices are outrageous, but I could consider an FHA to get into residential multifamily at $350-400k at 5% down. I would wait for 6-9 mos. to acquire with this and consider duplexes to triplexes.

3. Apply for heloc at 4.75% as my property received a tax appraisal of roughly $40k higher than my market price. Assuming this is untapped equity, I could take it at 80% LTV, and get $28k for down payment. Coupled with 12-15k in savings I could acquire again within 3-4 mos.

Are these my main options, what am I missing? Is this a good perspective on my strategies? Are there other strategies? 

On a side note, I am a W-2 employee. 

Thanks for your help, BP members. I look forward to hearing your thoughts. 

@Account Closed just PM'ed you! 

@Augustin Tommy Jr. just PM'ed you. 

@Austin Joseph, @Neil Narayan, @Zachary Barton I've PMed you to coordinate!

Miguel, based on your question about SFRs / profitability, consider a few factors:

1. What is your definition of profitability? Are you looking for 10% Cash on cash ROI, less/more?
2. What is your goal for investing? Increase in cash flow OR net worth? 
3. Why real estate investing? Is there another vehicle that can get you where you want to be?
4. Why Austin? There's a number of other cities in the central TX area that may better align with you're what looking for.

Just some food for thought. 

@Costin I. wow! What a thorough list of books. I have my own, but I will add many of those you mentioned! 

@Neil Narayan @Zachary Barton let's get a few more folks interested and I will coordinate. Thanks for the interest!

@Costin I. awesome checklist, thanks for sharing! I'll definitely review it with the colleague I am considering partnering with to ensure we have touched all our bases. If we're not in alignment, it will be evident as we answer all the questions within. Thanks again!

@Account Closed thanks for the words of advice!