All Forum Posts by: Derek Luttrell

@Steve Babiak @Deanna McCormick @Connor Heim thank you. She will take her time finding a new place, though she will likely have to move inland in order to find a comparable setup. Hopefully she can negotiate a favorable lease buyout from this new corporate owner, because if she stays for the entire lease, it obviously won't be getting renewed. 

@Colleen F. she hasn't signed any new paperwork provided by the new ownership, which should mean that the original lease is in play. There's no chance she's moving her 3 kids into a 2-bedroom. 

The best case scenario is she gets to live out her lease, which is disappointing enough for her. The place was great for her family's needs, and she could walk to work at the nearby hospital. More and more neighbors are finding themselves in similar situations. I grew up in San Diego in the '90s with my parents renting a 4 /3, 2400 sq ft for $1000/month. Amazing time for buy-and-holders, but you do have to pity the generational tenants who are losing their roots. 

@Deanna McCormick and @Dustin Lavender thank you. I just found out that the original owner sold the house to large, national PM company one month into her lease. When she moved in, he told her that this was his childhood home, and he was planning to keep it in his family for generations to come. 

Low and behold, an investor comes in, and the owner sells it for $1.7 million. This may change the game a bit now that a corporation is the one trying to get her out. 

Hi Everyone, my older sister rents a house in downtown San Diego, and I wanted to reach out for her on here. 

Two months ago, she and her husband/young kids moved into a 3 bedroom house that rents for $2900/month. It's a 12-month lease.

The landlord has notified them that he wants to do a gut rehab of the house (built in the '20s) and convert it into two units to generate more revenue (it has a basement with a bedroom/bathroom). The landlord says he will move them into another 2-bedroom nearby that he owns, though they have 3 young kids, and there's no way that would work. 

Is she safe by having a lease? Can the landlord buy them out, and would that price be up to my sister to declare? I would imagine that the landlord has no choice but to let her lease play out, but any expert advice from CA residents/investors would be greatly appreciated! 

@Ham Merritt I have to agree. Thank you for your input! 

@Nick G. thank you for the advice, and the congratulations. That $1,290 more than covers my attorney fees and appraisal, so I'm going to go ahead and take it. 

If I were living in the condo for 30 years and making the payments alone, I might have a different opinion. But I will soon be passing this onto the future tenants :) 

Hey Everyone, 

I am closing on my first purchase in about a week. I am house-hacking a 3-bedroom condo in Chicago by having 2 roommates each pay me $900/month+ utilities while I'm in the master. 

This might be a no-brainer, but yesterday my lender told me that if I increase the interest rate from 4.125% to 4.250%, they will give me a $1,290 closing credit, and this will increase the monthly payment by about $20/month. Is this worth it,or is this a sales tactic by the lender that's really just a bigger benefit for them? 

I'm buying the condo for $355,000, with a $5,000 closing credit from the seller, and a 2% ($7,100) closing credit from the lender since I am a first time buyer (25 yrs old) and have an 800+ credit score. This $1,290 will be on top of the $7,100 the lender is already giving me.

My plan is to live here for probably two years, and hold the property as a rental. Thank you! 

I am in a similar situation, 25 years old and under contract on a condo here in Chicago. 5% down on a conventional $350k loan. I will be doing my own variation of house hacking, as my place is a 3 bedroom, and I have two other roommates lined up who will each pay me $900/month plus utilities. This will leave me with just a couple hundred bucks a month to pay myself, which is great compared to the $1000/month I currently pay in rent. I get the feeling you are looking at 1 bedrooms, and won't have the opportunity to have roommates pay your mortgage? With Chicago being such a strong rental market, I also plan to live in this condo for 2 years, and then rent it out entirely. My goal for my move after that is a a live-in flip so that I can get another loan with a low down payment on a primary residence. Hopefully I can find an outdated 2 bedroom for under $200k, and then pay for the renovation out of pocket over time while living in it. Lather, rinse, repeat until I can put 20% down on a true investment property.

Originally posted by @Mark N.:

Hello Josh,

My daughter did that 2 years ago in Orange County when she was 23. She lived at home after graduating from college. Had a good job. Saved her money. Bought a 3 bed condo, renting out 2 of the bedrooms to girls she felt were compatible with her.

Her $400,000 condo is now worth $500,000, and most of her monthly payments are taken care of with the rent she collects. 

I highly recommend it. Just make sure your job is secure.

@Mark N. this hit home with me, as I am 25 and am closing on my first condo in downtown Chicago in two weeks. I have buddies lined up who have seen the place and will pay me $900/month each, effectively taking care of my mortgage. 

I can only hope to experience six figures in appreciation, but I'm glad to see that other people, especially ones my age, have experienced success with this as their first move in REI.

@Paul G. this is definitely helpful--thank you!