All Forum Posts by: Account Closed

Hi all,

I am about to make an offer on a duplex property.  Here are the details:

Purchase price: 55,000$

Rehab: 5000$

Currently rented:  900$ per month (400 and 500 each side)

Expenses:  Approx 400$ (includes property tax, insurance, water bill, property management - 8%, yard maintainance and 10% of rent as rainy day fund)

Financing:

I will buy this property with the HELOC on my home. Interest is 3.75% so the monthly EMI will be 278$ on 60k.

NOI: 222$ (111 per home, 2664 per yr)

I would like to know what you guys think about the deal.

Also I am planning to get an Umbrella policy instead of forming an LLC as this is my first property. Would that be enough to protect the equity in my own home?

Once I run out of the line of credit I am planning to refinance the properties I buy and keep the LOC for cash purchases on properties.

What are the pros and cons of keeping a rental property on HELOC for a while? In terms of asset protection?

Thanks @Anish Tolia for the perspective on schools.  Yes indeed it's a problem.  I anyway might have to settle for other areas with less competitive schools.

 @Amit M. Thanks for the suggestions.  

I am inclined to option 1 of renting this house.  I can manage 1K neg with tech job, but I am thinking of offsetting that 1K neg with a few properties out of state > down payment raised from this homes equity.

It might just work out in the end!

@Ezra Nugroho 

Thats a good option.  I probably can tap into this homes equity for bigger homes downpayment + some extra for investment properties.  

@J Martin

Thank you for your comment.  And btw thanks for arranging meetups,  i plan to attend one soon.

Reason:

Yes to all three actually.  Trigger being home size (primary) since i have a growing family,  and commute from fremont to cupertino knocks out 2.5 hours for my wifes day,  and more importantly I want good public schools (at least 9 rated)

Changes to current house:

HOA is a big issue, no architectural changes allowed even though it being a SFR. Garage conversion is something i am looking at but that will most likely be shot down as well.

Other options:

I am contemplating keeping this place and renting it.  And i will rent myself.  Could you please advice if the current home would serve as a good rental?

2855 mortgage (15 y term) + 700 taxes + 100 insurance + 90 hoa + maintenance = 4000$ 

It will rent for max 3000$.  Does it make sense to take a 1k hit per month to bet on appreciation?

Please note: if the term was 30 years the mortgage would be 1800$

I like your idea of beatup place.  If you have pointers please let me know :)

I am absolutely wanting to invest,  i will attend the meetups and get some ideas on where to start.

Thank you all!!  I get the message loud and clear that primary residence is a keeper especially in bay area.  

I agree with @Manch Hon  that appreciation will be way greater in bay area far ahead in the future (15-20 years).  

I will explore options out of state with a small %age like @Account Closed  suggested.

Thank you all again!!

@Manch Hon Thanks for the links.  I am following Tesla closely.  That and Facebook campus being close to my house has driven the prices up.  Another large campus is being build by Facebook in Menlo Park.

@Account Closed Thanks!  This indeed is a golden goose :)

I am struggling to find a path forward!

Thanks Manch!  It has been a great run since we bought this 3 bed house. 

Bought for 550K and now it will sell for 800-820K.  I am also locked in at a great interest rate of 2.875% with a 15 year term.

Renting this home will have -ve cash flow as the total outgoing is close to 3500 (due to 15 year term).

Selling this house and buying bigger near Cupertino (or good schools areas in south bay) at near peak price I think would not make sense (thats where our work place is).  4 bed will cost 1.5+ million.  

Buying another home will reduce my options in RE investing.

Thats where the thinking of investing 350K to generate 5-6000K per month came.  Rents around south bay are around 4-4.5 K for 4 bed.

Hi all,

I am from Fremont, CA and want to get started in investing in buy and hold properties.

I have read lot of posts on BP and done research of my own.  I have explored areas like Sacramento, Stockton etc but I feel that the local economy is not stable for the long run. 

I have contacted a few investment specialists from out of state and I feel it will be good to start out of state. Fully managed by a PM who will send pictures/videos. I have done this for my first property over seas and has worked well.

My goal is to build a stream of passive income over next 7-10 years which can sustain my current lifestyle (10+ rental units).

Primary residence:

We have out grown our starter home and looking for a bigger home (4 bed or so). Those homes are over a million $$ around here. I have over 50% equity in my current home (300-350K equity).

I am trying to evaluate if it would be wise to sell the primary residence and put the cash in to out of state properties (with leverage, operating a million $ investment with 20-30% down).

That could generate enough income (and more) for me to rent a 4 bed home that will suit my family needs.  Would this be a wise decision to not have a primary residence but buy investment properties?

Any help much appreciated.

Thanks!