All Forum Posts by: Devon Moore

Thanks for the feedback Evan. That totally makes sense, and if you are catering to renting by the semester, the winter and summer months would have a lot of vacancy. Unfortunately, in the area I am looking there are strict STR ordinances that require owner-occupancy.

Hi Everyone!

Has anyone done mid-term rentals (MTR) in areas with colleges and universities as the primary demand generator. If so, can you provide some details on your experience and who was most interested in renting from you?

I am thinking there would be many students and scholars who may be in an area for a few months or a semester that could benefit from a mid-term rental.

Thanks!

Devon

Hi! I have a quick question related to lending and HELOCs to tap into equity. I will be refinancing my duplex in Salem, MA (north of Boston) in the next few months to lower the rate and potentially pull some money out. Currently, I am living in a unit of the property as a primary residence. I have a quick question about HELOCS as I plan:

If I open a HELOC for an owner-occupied property, and eventually I move out of the property and rent to tenants, will I be able to draw on the HELOC once I am not living in the property and the property is fully leased up?

I appreciate any help on this.

-Devon Moore

I know this can be very specific to zoning and dependent on the municipality, but I am currently looking at a fourplex that has three large sheds that the current owner uses for personal storage. Each shed could be split into two units, so that would be six storage units. If I was able to rent the storage individually to people renting units in the fourplex and others who are not renting an apartment it could be a great investment. How would I determine the legality of renting these? Does anyone have experience doing this or know of anyone who has?

I appreciate any help!

-Devon

@Mindy Jensen Great, thank you for the clarification on this. I actually checked in with my CPA and since I also rent out rooms in my unit, I would receive very little benefit from this strategy. In addition, the depreciation recapture allocated to the other unit over the two years would increase the tax burden slightly.

Thanks for all the information and opinions everybody!

@Todd Dexheimer  @Matt Nico- Thanks for the replies. It looks like you both had similar reactions. This process is slow. One thing I didn't mention is the Boston area is an expensive market, so I wouldn't likely be able to buy another property after one year anyway. So waiting another year isn't too big of a deal, would allow me to sell and get all the gains tax free, and upgrade from a duplex to a fourplex.  

And yes, I think I would only do this once or twice, or add other investment strategies to build a portfolio along the way once I have the capital. 

I am a new investor and always adjusting my strategy as I learn more. I realized a problem with the house hack model is the difficulty to pull out your capital after a renovation like you can with the BRRR method. I kind of combined the House Hack, BRRR, and Live in Flip strategy here. I'm curious what people think or if anyone has done the same.

My goal is to build a portfolio of buy and hold rental properties. The plan was to get a 5% down loan, house hack for a year, move out and buy another. I bought my first duplex about a year ago in Salem, MA (north of Boston). This property has a lot of value add opportunity by adding bed rooms and square footage. Based on my expected ARV, the 5% equity will be about 20% or $100k after the renovations. The problem is, being young and planning on continuing to househack my way through a few more properties using the low down payment programs for owner-occupants, that equity doesn't do me any good sitting in this property, and I can't refinance any cash out because all the improvements only brought it to the minimum 20%. I detail the plan more below:

Buy: I bought a duplex under market value with considerable value add, but is good enough to rent out the nicer unit and live in/rehab the other unit.

House Hack: Take advantage of the low downpayment, owner-occupied loan

Rent: I am renting out the bottom unit to offset my rent. I have also had friends rent the other bedroom in my apartment at a rate under market (since I would be doing a lot of work on it and they are friends). This minimizes the carry costs significantly. I paid $700 on the $3,250 mortgage payment.

Rehab: Unit 1 (first floor) - bought as a 1000sf 1BR 1BA, will move in for the 2nd year once their lease is up and make it a 3BR 1BA. Unit 2 (second/third floor) - bought as a 1000sf 2BR 1BA (900sf unfinished 3rd floor), will improve layout of 2nd floor and add 2BR and 1BA and living space to the 2rd floor. This will be a 1,900sf 4BR 2BA apartment.

Sell: These renovations will increase the value significantly, and since I lived in the property for two years I will not be taxed on the gains.

Repeat: Take the profits and reinvest as a 5% downpayment on another value add property. In this case I would have about $100k in capital to reinvest.

Pros:

1. - Will be able to scale quickly since my capital will not be tied up in my first property. I will be able to buy in better areas and will have a higher renovation budget for property #2.  
2. - I will save about $24,000 in rent over two years
3. - The longer time frame allows for more DIY, saving money on contractors
4. - Tax savings

Cons:

• - Have to wait two years before getting another property
• - High leverage (which I am comfortable with in a house I live in at this point in my life)

What do you think?

- Devon

This is the first year I have owned a rental property. It is a duplex and I rented out both units for 4 months and lived in one unit for 3 months. I want to make sure I get all the tax benefits for this year. I have used Turbotax in the past because I had a very simple return. I was looking to start using a CPA. What does a tax filing with a CPA typically cost in this area? My return will still be relatively simple with just adding a schedule E. 

Also, any referrals would be appreciated.

Thank you! 
Devon

Hi,

I currently own a duplex I purchased recently in Salem, MA. I live in one of the units and rent the other.  The third floor is unfinished but large enough for another unit.  I am currently looking into the zoning to get the approval to build another unit.  

Are there construction/rehab loan programs for owner occupants? I read a little about the 203k loan, but I dont know of any other programs.

Thanks for any help!

Devon

Where are the best areas for people in Boston to invest that is close enough to live in and work in the city or to manage from the city?