All Forum Posts by: Gabriel Melching

Quote from @Steve Smith:

Ask the seller to carry a note, but I'd buy a SFH instead of a duplex, especially if the duplex needs remodeling! You can remodel a nice home much cheaper that a duplex, get better tenants, better appreciation and MUCH less work. Granted the duplex will throw off more cash but you'll work your tail off for that.

Appreciate the reply! One detail I left out... This duplex is in a short term rental are that I currently operate in. Seasonal profits take a little more work here, but generate a much higher cashflow than SF's. Properties with room to add value don't come up here often, hence the motivation to get into this property.

My hunch is that the seller won't want to carry a note and will go to the next highest offer, but obviously I don't know for sure.

Hi folks, 

Looking for some quick feedback from a financing perspective... What would you do/recommend?

Here's a quick summary of the situation: 

I'm interested in putting in an offer on a duplex in distress listed at around 250k. Just listed on the MLS, and I have about a week until offers are due . I don't have much liquid cash available, so I'm trying to get a little creative. I do have access to the following:
- My primary with a 60k HELOC
- A duplex with a 30k HELOC (taken some time ago... I probably have 150k equity at this point)
- A SF rental with ~150k equity, no HELOC

The new property will probably need to sit for 6-12 months while I renovate. Planning to do much of this myself. Without an exact numbers breakdown of each option (which should obviously be my next step), I think my ideal situation would be to sell the SF and roll the equity into this, leaving me with a modest holding cost that I can absorb with my stable W2, and keeping the HELOC for any larger ticket items I need during rehab.

Some options I've considered: 
- Forward 1031:  Seems to have timing issues (unless my purchase offer has a contingency, which will most likely make my offer pointless in my market).
- A reverse 1031: Complex, and possible financing issues for the initial purchase before selling. I could use HELOC cash to finance, but I'm a little hesitant on taking a large HELOC out with current interest rates. Also, I have a month to month tenant in the SF, which could complicate the sale.
- Conventional purchase with 20% down using a HELOC: Current cashflow from the SF could cover a big portion of the HELOC payment, but this starts to feel risky from a cashflow and funds available for rehab.
- Conventional and move there/rent out my primary: Certainly the best option, but a hard no from my S.O.'s perspective.

I'm guessing sound advice will be difficult w/out more detailed numbers for each option, which I'm working on. Regardless, I thought I would throw this out there in case I'm missing any potential routes. 

Thank you! 

Thanks @James Wise!

Hi All! 

I'm new-ish to real estate investing (more background below) and have hit a bit of a lull in expansion. I've been listening to the BP podcast for a while and less-so lurking around the forums. I'm hoping that becoming a bit more active on the forums might help myself gain some traction while helping out others where I can.

My background... Currently working full time as a product development engineer. I started out house-hacking a duplex in Grand Haven & transitioning it to an AirBnB. This was before I knew of PB or much at all about real estate investing. Once I started seeing the cashflow pay my mortgage plus some I was hooked. We found a great deal on a single family and moved out/converted the second unit to an AirBnB. So, I'm currently sitting at 2 doors (both vaca. rentals), and a single family with a good deal of equity.

Things I can Help Others With: 
Any rental details in the GH area. I'm pretty familiar with the city's process.
Any AirBNB questions or details with the city. Again, after a few years I'm pretty familar with the process.

Things I'm hoping to Improve: 
I'm currently struggling a bit to get a second deal. My significant other is pretty resistant to 'downgrading' to another duplex/multi-unit for 12 months, which makes things a little more complex... This would be my preferred strategy. I probably have just enough capital to put 40% down on a second turnkey property, but I hate the idea of tying up that much capital into one property.  Obviously potential solutions are flipping, wholesaling, or partnering with another investor on a flip. I think sourcing quality deals is probably my weak point right now.

Anyways, I'm looking forward to being more active on the forums and helping others wherever I can.