All Forum Posts by: Hunter Peterson

@Dave Foster thanks for the clarification on the 1031. I'll qualify for the tax free status, so that's awesome.

I'd only "house hack" if I could find a 3 or 4 unit property with separate units with their own walls, yards, etc. and live in one of them. In an ideal world, rent covers most of your mortgage. Not sure how feasible that is by the beach as a destitute young bohemian, but who knows?! Gotta work the back channels to find a killer deal!

@Brian Ploszay great tips on looking for high-density housing (which we're starting to see more of in South OC) and taking a look at transaction volume. However, with there being so much space in So Cal, there are a ton of "edge of civilization" type of towns that are lower cost to entry and in 10 years' time are completely surrounded by other cities. However, the major cities within LA, OC are definitely starting to grow up. 

@Carlos Altamirano I have some friends doing Air BnB but its a little closer to the beach and they're seeing awesome returns. I won't have to worry about capital gains tax since I'll be under the $500K figure.

@Filipe Pereira I can't be sure but that seems to be the word on the street. So Cal seems to be a little more immune to market corrections, but since townhouses are usually the first to depreciate before SFRs in a down cycle (from what I hear) I don't want to get caught without a chair when the music stops so to speak, especially if I don't see that this place would be a cash flowing property if I had to hold onto it.

First off, hello! I am new to BP and looking to start building my network in Southern California (Orange County) for RE education/planning and future RE investing. Hello BP! Secondly, a question... If I sold my primary (and only) residence tomorrow, I'd be able to capitalize on a fair amount of appreciation. Also, due to high HOA's, Mello-Roos taxes, and the fact it's an attached house, I don't see it being an excellent rental property in the future. By my rough calculations, breaking even would be the best case scenario if I rented it out. My thoughts are to cash out on my current appreciation and: 1. Rent until the market corrects itself 2. House hack a multi-unit property in So Cal or 3. Buy a home with better long term rental potential. Since the market is near the peak here, I don't want to trade apples for apples, but maybe there are some slightly better apples out there than my current apple?! I'd love to hear opinions from those more seasoned than myself! Thanks in advance for any feedback! -Hunter

@Michael Swan

Hello BP! First time poster over here. 

There was a point in the most recent BP pod where Michael "Swanny" Swan described my life almost exactly when he talked about his $500k condo in San Diego that he didn't sell before the last crash, and how he learned his lesson. So I thought I'd reach out to those more experienced for advice and see if I can avoid making a similar mistake in the upcoming years. 

In 2014, I purchased a townhouse in Orange County before discovering BP in 2017. I could have bought a lot worse, but I could have bought a lot better. Using the information I've gathered from the BP universe and beyond, I'm looking to pivot my current living situation and lifestyle to one that is better suited for REI success.

Here are the basic stats on my current home...

Purchase price: $492k

Mortgage: 80% LTV 30-yr fixed loan @ 4.125%

Property tax: $7,698/yr

HOA: $340/mo

Sq. Ft.: 1,557

BR/BA: 2br / 2.5ba

Principal owed today: $371K

Zestimate: $542k

*Need to get an actual appraisal. Average $/sq. ft in my city is $373 which would put me at $580,761. While my neighborhood has exact floor plans like mine, my home has a number of upgrades and an excellent view where all others face another front door 20 feet away.

While I'm not living beyond my means and only have a modest car payment and Netflix & Hulu (sorry its worth it) as my other fixed expenses outside of utilities, I'm definitely aware that I could be living leaner and cashing in my current living situation for one that is more beneficial to my newly-formed REI goals in the long-term.

While I could pull money out of my current home, get another place, and turn my current place into a rental property, I feel it isn't a great candidate for that. Comps for rents in the area have me barely breaking event if at all. I'm at a point in my life where I can't sustain losses now to gain appreciation later. My initial thoughts are to sell and cash out on the appreciation of my current home, lose the HOA, mello-roos tax, etc., and aim for a triplex/fourplex that I can house hack or a 2br w/ "bonus room" situation that I can live in and convert to a 3br long term rental.

As someone who's still fairly new to this, I'm excited to hear any and all opinions and suggestions. Hopefully this serves as a worthwhile case study for a few of you out there!

-Hunter