All Forum Posts by: Hyeseong Park

Hello, I'm trying to start house hacking with FHA loan and I got a question. I'm planning to buy 4 units in LA area and I'm going to rent out 3 units of course and make one unit in my space. But for my own unit, I'm not sure if I can even sometimes Airbnb out because I will have two spaces as I also have another rent apartment for living in PA. (So, for me, I want to go back and forth between PA and CA). Is it possible to do Airbnb my unit while house hacking?

It would be amazing to do Airbnb out the unit in LA, whenever I'm in PA so just curious if anyone has done this.

3 units - rent out

1 unit - my space or sometimes Airbnb

1 Vote

Hello, I'm a 27 yrs old, married RE investor in Lancaster, PA & recently sold my first house doing flipping and got 125k in my pocket as cash. I'm just hesitating about how to use this money now, because I heard that house hacking is the best option to start with FHA for me from a lot of investors. So I'm planning to do so but where.

I have my music artist career as well, so I'm thinking doing this house hacking in LA area (maybe Korea town area or around that place), not in PA to make relationships with people who are into music & meet my relatives, which also can generate my resident place in LA and it can make me go back and forth between LA & PA whenever I want. (I have my wife in PA here so she wants to stay in PA but sometimes she also wants to go to LA for taking a break.)

So, if I buy a Quadplex condo or multi family house with around 1 M in LA area, I feel like I can grow up in music career side and make my future kind of easier and make me do what I want to do I think.

Only thing I feel bad is that CA is now tenant friendly state.

So my question is... if you were in my situation, where do you think you want to do house hacking? And if not house hacking, what investment plan are you going to do? (Keep flipping? Doing BRRR in PA?)

Please give me some advices:)

0 Votes

Quote from @Bruce Woodruff:

Quote from @Hyeseong Park:

No, this rarely works. The actual schedule is not completely under the GCs control, and therefore not fair to penalize them for delays (that will likely be caused by you :-)

When customers used to ask for a penalty clause, I would just counter with a early-finish reward that was easily attainable. That would shut them up.

Far better to just find a good Contractor and have a very clear SOW. This way you finish as close to schedule as possible without penalties and all the hard feelings.

Once again, the key is to find a very good GC, get everything written down in Contract Documents and then you the client, just go away and leave them alone.

Got it. That's great info. But what if the contractors that I hire are not punctual like not finishing on time (deadline)? Maybe the client needs insurance too so wonder how you dealt with this if there was a case that they claim on.

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Quote from @Bruce Woodruff:

Quote from @Steven Goldman:

Change order should be in writing and have the work and cost spelled out in detail. Good luck.

A CO should also address the amount of time that it will add to the project schedule. I used to add at least 1 week for every change just as a safety net. When the job runs over schedule the Contractor is always the one that gets the blame :-)

@Bruce Woodruff thanks for the info. In your perspective as you are a contractor, it is always good idea to add terms that late penalties & early project done bonus together in clients' written contracts to make workflow faster and better? Just curious.

0 Votes

Quote from @Alan F.:

Quote from @Hyeseong Park:

Hi all, I've done 2 flips so far, and I have a question which might be related with law-side about doing business with handymans.

I recently finished one flip with my handyman and he delayed kind of every time for each phrase even though he said I will do this by this day, that day by calling..., so I feel like I should've put a term for clear deadline in a contract. (which was actually my fault that I had to put deadlines for each phrase in contract at the beginning...)

And the thing is that he doesn't want to leave text messages about deadlines, but want to give info about it by calling, so not sure if that is something he is trying to avoid leaving provement as here it is PA which state doesnt allow voice recording unless each party both agree.

In this situation, for next project, if I put a term that says "the client and handyman both agree recording of phone calls for potential provement" in a contract, is that going to work & be helpful to me to file them once something happens between us in law-wise even in PA?

Not sure if anyone can answer this.

You definitely need a contract with expectations & benchmarks, as well as payments well outlined. A handyman is for small tasks, a contractor writes contracts. Run your operation like a business.

BTW, texting is for; "I'll be there in 15min" not for reiterating more complex and nuanced situations. Some people use their hands for working, not texting. Teenagers are good at texting.

Hello @Alan F., thanks for the info. Usually, when investors want to even work with handymen, I'm the one who writes contracts for this case, not them correct? And do you recommend that I should always go with a lawyer when I write a contract?

And yeah I know they will probably feel better with calling not texting more.

0 Votes

Quote from @Eduardo Aguilar:

Want to second @David Ramirez's comment regarding the process. Most HMLs fund the construction through draws that require a submission of a request for the funds after a portion of work has been completed.

This is a good question to ask your hard money lender so that you understand what there process and turnaround consists of when submitting a draw request. There are some lenders that offer up an upfront draw to kick start the project but you'll nevertheless want to have some type of access to funds (whether cash or a credit line) to help front some of the costs knowing that you'll be reimbursed at various intervals throughout the project.

If you haven't had a chance to check it out, I would strongly advise that you listen to the Rookies podcasts with James Daynard who gives a masterclass in structuring your processes to increase the sucess rate for your flips. Here are the links just in case:

Part 1 | Part 2

Thanks @Eduardo Aguilar, that's a great help! will look into it.

0 Votes

Quote from @Jake Baker:

Hi @Hyeseong Park

Yes, there will almost always be a "draw" system with Hard Money Lenders. i.e. A $60k rehab with 3 draws of $20k per draw. You have to complete the first phase out of pocket, and then they reimburse you the $20k. Theoretically, You can use that first 20k draw to pay your contractor for the second phase.

Tip - develop a good relationship with your contractor. They can be flexible with you on payment dates if you communicate the draw schedules with them.

Hello Jake, thanks for the answer. I think I understood fully. I guess there are not specific limited phrases (2~3 phrases only) though, correct?

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Hi all, I've done 2 flips so far, and I have a question which might be related with law-side about doing business with handymans.

Not sure if anyone can answer this.

0 Votes

Quote from @Nick Belsky:

Quote from @Hyeseong Park:

Quote from @Erik Estrada:

Yes the broker is right. The rehab funds are held in an escrow account and you may request draws once the work is completed and inspected. You could request it all at once if you choose to set it up that way.

I have a few clients that pay their workers once they finish a section of the project, however they are licensed GCs.

Thanks for letting me know! So whenever investors flip their house, they most likely need down payment for houses + rehab price in their pockets, correct? No any lenders provide rehab price upfront?

There are some that do but the ones I know of require at least 5 completed flips within the past 3 years. You will also still need to show reserves and such. There are also 100% financing available out there. I know of 2 but they only lend in limited states and require the most recent tax returns.

Cheers!

Thanks for the great info! May I know the 100% lenders if you don't mind lol.

0 Votes

All Forum Posts by: Hyeseong Park

Hyeseong Park has started 22 posts and replied 64 times.

Post: BRRR first? or House Hacking first?

Post: Is it possible to do AirBnB for my residential unit?

Post: What option would you choose if you were in my case?

Post: Recording phone call is illegal in PA but

Post: Recording phone call is illegal in PA but

Post: Recording phone call is illegal in PA but

Post: For fix & flip loans, rehab 100$

Post: Fix and Flip loan with Rehab 100% question

Post: Recording phone call is illegal in PA but

Post: Fix and Flip loan with Rehab 100% question