All Forum Posts by: Edwin Zamora

Hi Biggerpockets!  Newbie here. 
Some back story to where my question of the day comes from. During Christmas i got together with family and was telling one of my family members how Im looking for a building to house hack. He immediately tried to put me off the idea and started telling me his horror story of how he had to sell his 3flat in 2021 because his renters stoped paying rent during Covid. Of course me having some knowledge from bigger pockets, I immediately noticed the mistakes he made. I patiently listened and didn’t say anything knowing his ego would be bruised if I mentioned anything and he probably wouldn’t give me any details.
It turns out he was house hacking but his cash flow was practically nonexistent. He only made $200 above the mortgage. He also did not accountant for vacancies, maintenance, and repairs so the rent that he was getting was immediately going to pay off the mortgage and the other $200 he considered it profit so he didn’t have any of that saved up. So as soon as his renters stopped paying he started to drown in debt so he ended up cutting his losses and selling the property for a loss. 
I have a question for those who have or had properties during Covid. 
What was your situation like? 
Did your renters stop paying at any point in time? 
If so how did you move forward after that?
Were there any programs in place to help renters with rent?
How were evictions processed during Covid? 

Thank you for any and all responses! 

I just want to say thanks for this post! 
Im currently looking for my second house hack multifamily property and never had the idea of running a snake camera through the drains to see if they’re damaged! 
It could be a huge unforeseen cost. 

As for continuing to make the repairs for the new home owner. You may be doing the repairs out of the kindness of your heart and because you stand behind your work. 
But the people that bought the property may have been renters all their life and were always accustomed to making a phone call to the landlords or maintenance in their apartment to come and fix things. Its quite possible that they’re trying to continue doing the same now and seeing you as the one to call to fix their issues. 
But fortunately for you they signed the deed and hopefully did an inspection before hand. So that property and every issue from there on in should be their responsibility. 

Quote from @Nicholas Coulter:

@Edwin Zamora do you have an idea of the monthly cashflow coming in from your first HH after you move out? and also the monthly cash flow on the second property?

From the first house hack let's just say im coming out clean without any cashflow. My ex and I split up due to our goals, and investment aspirations not lining up so im renting her the house without charging her anything. Shes just in charge of paying the mortgage, bills and 1/2 of repairs needed. I pay the taxes. (Everything is under my name)
As for the second property Im still looking and have no idea as of yet but I am aiming for at least a 2%-5% Cash on Cash return. 
Im ok with that amount now. I just want to start scaling my portafolio and also thinking that when I move out and rent the unit that I would live in that my COC would increase more. 

Quote from @Carlos Ptriawan:

They usually makes money from the fee at the beginning or from the initial withdraw's and other fee.

That’s what I was hoping to avoid. Any unnecessary fee’s or interest on money thats just going to be sitting there in my bank account sInce I don't know how long it might take to find  a property where the numbers make sense since the market where im looking for a property is in short supply right now. 

Quote from @Steve Vaughan:

Quote from @Edwin Zamora:

I am currently working on buying a second home to house hack. I plan on using the equity I have in my current home to fund part of the down payment and renovations needed to get the building rent ready on the second deal... the majority of lenders I've spoken to require me to take out a large initial withdrawal at closing  $15,000 $20,000, $45,000 etc. 

 Can you take the initial draw and pay it right back, or after 30 days? That wouldn't cost very much interest. 

Mine didn't have an initial draw requirement but did cost $825 total in title fees and lender's insurance.  I used a local bank I had an account with already.  I'd focus on local banks and CUs. 

 I honestly had not thought of that. I’ll have to ask the lenders if thats a viable option or if theres any fee’s associated with that. 

I tried with my local credit union but the interest rate they offered was variable at 8.5% and only for $80,000. So i wasn’t to convinced with that offer.

Hi bigger pockets community! Im hoping someone can throw some advise my way. Here's my situation. I am currently working on buying a second home to house hack. I plan on using the equity I have in my current home to fund part of the down payment and renovations needed to get the building rent ready on the second deal. I've spoken to multiple banks on getting a heloc but here's my dilema. I don't want to pay interest on money that I don't need until  I find the property, but the majority of lenders I've spoken to require me to take out a large initial withdrawal at closing  $15,000 $20,000, $45,000 etc. 

Ive only managed to find one bank that offered me me a no initial withdrawal amount required which was Citizen Bank. The issue is that looking at online loan reviews of that bank a lot of them are bad. No communication, App would not work, people could not access their funds etc. 

Has anybody used this bank before? Or could anyone recommend a bank that does helocs with no initial draw at closing?

Here are the details on the loan 

Amount borrowed-$110,000

Variable Interest Rate starting at-7.25%

10year draw period 15year repayment period 

No closing cost, early repayment fees, early termination fees, or any other fees besides a yearly $50 account fee waived the first year. They cover the appraisal, title exam and recording fee.

Another option I have is a fixed Heloc from Spring EQ

Amount borrowed-$80,000

Fixed rate-10.875%

10 year draw period  20 year repayment 

Origination fee-$1395

Full Appraisal fee-$540

Closing cost-$2864

Initial draw of-$20,000

Any thoughts, comments and advise is appreciated!

Congratulations on your first flip! 

Thanks for taking the time to post before and after pics look foward to seeing more! 

Originally posted by @Shantelle Evans:

Hi Dave, what is HML?

Hey Shantelle, HML stands for Hard Money Lender.

Congratulations on your first investment property! As Cliff mentioned if you would be comfortable in sharing some of the financial details I'd greatly appreciate it! I live in Chicago and im looking for my first investment property as well. Best of luck!

Beautiful renovation! Did you end up selling it?