All Forum Posts by: Dmitriy Yeshin

Conventional wisdom says that DSCR should be more risky and as a result, more expensive than conventional loans. Based on some online searching, it appears that the rate gap between conventional investment property loan and DSCR is pretty narrow at the moment. It is hard to say without going through the entire underwritting process and most lenders give a range for rates and costs.

Is that.....possible? Is conventional still cheaper than DSCR in 2025 if all else is equal? If the gap still exists, is it more narrow today than it was during the lower rate environment?

Thanks in advance.

Hi. I realize that this thread has been stale for a while but if anyone still wants to connect I would be happy to chat. Please feel free to PM or request to connect.

I think you are concentrating too much on negative cash flow. As long as your negative cash flow is less or close to what you would pay for rent of similar room GO FOR IT!!! You are missing the fact that there are a ton of other benefits in house hacking aside from cash flow. Mortgage payoff, property value appreciation, tax benefits the list goes on and on. If you want some specific advice or just want to bounce an idea off someone, feel free to reach out.

Dmitriy

I will echo what everyone on this post already said but house hacking is the way to go no matter where you live. There are soooo many benefits of house hacking. Cash flow, equity growth, tax benefits, the list goes on and on. I definitely recommend experiencing the neighborhoods in person since you will be spending at least a year or more at the new place. A good way to get started is to identify a few potential properties by searching online, schedule to see them back-to-back to minimize hotel expenses and take a trip down. Make it a mini-vacation with a purpose! If you need some advice or simply to bounce the idea off someone - feel free to reach out.

Dmitriy

@Christian Sifuentes

https://www.nolo.com/legal-encyclopedia/new-jersey-form-llc-31872.html

@Beshoy Awad

There are actually a few reasons you are having a hard time finding a contractors willing to work with 203k. Things always come up that are not budgeted for either by owners request or by necessity. Amount of money in the escrow is locked in so any extras have to come either from home owner or from the bottom line of the contractor. 203k homeowners don't usually have spare cash (hence why they applied for this product in the first place) but very often want higher end finishes or some extras. So you end up doing things just to wrap up the project at detriment of your own profit. The other reason is that bank never pays ahead so you end up working on credit. Depending how long it takes for bank to turn the paperwork around and disburse a payment, it may be a while before you can move on to the next part. Contractors like to get in and get out so you can move to the next project. The thinking in the industry is that you end up with subpar contractors because in-demand ones don't want to deal with above. You are better off getting a short term bridge loan and then refinancing into a long-term mortgage. I am biased though since I work with a contractor :) good luck.

P. S. You can try to search for contractors here https://203kcontractors.com/

@Shannon Richardson

Property could definitely use a little lift. I am a bit confused about underlying systems. In the video I saw some old style radiators, what looked like vents for forced air, at least 1 through the wall a/c and maybe some baseboards (wasn't clear on the video). Not sure what is actually actively cooling/heating the house. Definitely don't try to cut corners on inspection if you didn't close on the property already. It could save you thousands in the long run. Also, take a look at what else is renting in the area. What is the condition of comparable units and how long are they on the market.

@Shannon Richardson

Hi. If the house is in such amazing condition why do you need to renovate at all? Are you trying to flip it or do you think that Apts will rent for higher rate or faster if you renovate? Don't spend a penny on renovations unless you are absolutely sure you will get your money back at a reasonable return or repairs are necessary due to hazardous conditions. Also, beware of "hidden" issues and make sure you get a thorough inspection report. Even though property may look visually appealing something like a broken furnace can destroy your projected profits.

@Satyam Sundaram Ramyanam

EIN is used in many places and not only filling tax returns. I.e. Open a bank account, apply for loan, hire an employee, establish credit history for corporation. Some of these use cases may not be applicable in the short term but you may need it in the future. It doesn't cost anything if you request EIN directly from IRS so I don't see why you wouldn't want to get one just in case.

@Wei Jie Yang

Check Rockland and Westchester Counties in NY. Otherwise you would have to look at central jersey but commute might be longer than 1hr. There are more multifamily properties in those areas than Long Island. Good luck.