All Forum Posts by: Chris Watkins

@Jake ThomasI really like that idea of buying the rental just before selling the primary... And I hear you on the in-law plan - not for me either. Thanks for the idea!

Awesome thank you @Chris Mason- That is a valid question, I appreciate you bringing that up because you could definitely correct me if I a wrong in my thinking...

I've lived in the home for 5 years, there is not much more we can do to the home to force appreciation and add value. The market in this area is really good so selling in 2-3 months would be ideal to maximize value on the work put in. 

So now how do I maximize the value of my living situation? I don't necessarily need all of my equity out of this home but currently have the ability to withdraw some through a HELOC to give me some short term cash options.

My thought process is that I have maximized the value of this home and can move on to the next adventure which should now be 1 of 2 options:

1. Find a home with great potential that we could move into as a family and work on to force appreciation (in addition to some market appreciation hopefully). We'd do that for 2 years (for tax reasons) and then sell and move on to the next home doing the same thing. 

2. House hack a triplex or fourplex with 3bd 1 bath units (to fit the family) for a few years until we own several multi-units to be able to hold on to long term. 

If we did either of the options above maybe 3 times we could probably work up to our dream situation which is a home in a desirable mountain location with acreage and "bells and whistles". 

Additionally, I plan to purchase non-owner occupied investment properties along the way so that in 10 years I have a decent passive income set up. 

Thoughts on this? Am I missing something in my plan?

@Chris Mason- Would the lender be able to count the income towards my DTI if the 12 month lease is signed before closing on the new home but doesn't start until after the closing on my new home?

Great advice. Just a few notes in response to suggestions. 

We've really updated/remodeled and made our current home awesome and in move-in ready condition (new carpets, paint, fireplace, remodeled kitchen, remodeled bathrooms, custom tile, etc...). I feel we wouldn't maximize value if we rented it out because of the risk that renters wouldn't take care of it like we have. 

Additionally, the reason we hesitate to sell is because we've got an accessory apt in basement with income stream as well as a separate office for where I work every day (self employed). My office is under the garage bonus room so I am undisturbed by my little kiddos during work time. So the next home ideally would have to be a MFR "house hack" that makes financial sense or a similar layout with opportunities to force appreciation. The issue is that a house more ideal than what I have now only shows up once a year or so.

I'd rather not sell a good house until the ideal next house presents itself for that reason. However, I am not opposed to selling now, which we may end up doing, and renting a place for that year or so until the right opportunity comes along. I'd just rather find a way to avoid double moving, etc...

I did find a more perfect home but couldn't get the deal done because of the contingency. That is what inspired the question. 

Thank @Wayne Brooks- I was hoping there was another option but I think you are right. What about using a bridge loan? Or hard money lender on the second home and then paying him off after selling the first and refinancing the 2nd?

So @Shawn M. , you are saying that I could lease option my primary? But wouldn't that still affect my DTI ratios in a negative way? I appreciate your idea - now I want to make sure I grasp it...

So I've got a newbie question - Let's say I have my current primary residence and then I find a new home that I want to buy as my new primary residence. I don't qualify for both mortgages so the traditional thing to do would be to offer to buy this new one with the contingency that I need to sell my old home first. In the local market here in Utah that just doesn't fly well. I will get beat out by a non-contingency offer all day. So what options are there? I have come up with two ideas but I still don't know if they are better alternatives than a non-contingent conventional financing offer. 

Option 1: Offer to the seller a Lease option on the new home until you sell your current home at which time you can exercise the option to buy the 2nd. 

Option 2: Have the seller carry the note until you sell your current home at which time you can refinance the seller out of the 2nd. 

Both of those seem more "complicated" than a clean conventional financing offer without the contingency of your current home selling. 

Help? Am I missing other options?

Re-posting this as it appears there are two separate forum posts to this questions. Here is what I responded to your other post Tolby:

Good for you Tolby. I wish I started when I was 18. Jumping in now will make things really click for you when you reach 30. If you are anything like me, it is hard to want to think long term when you are your age, but the law of compound interest tells us you should be. My advice would be to start learning with all the amazing resources now available through the internet. These forums are an amazing resource. I also would recommend reading some books. Consider the following books:

Foundation Books to Read First - it's important to have a foundation for financial intelligence before beginning investing. If you can't save your money, you won't have any to invest. Read these first:

1. "Think & Grow Rich" by Napoleon Hill
2. "The Millionaire Next Door" by Thomas J Stanley
3. "Four Hour Work Week" by Tim Ferris
4. "Rich Dad Poor Dad" & "Cash Flow Quadrant" by Robert Kiyosaki

How to Books for Real Estate Investing in Particular - When you've built the foundation, I'd recommend

1. "The Millionaire Real Estate Investor" by Gary Keller
2. "Creating Wealth" by Robert Allen
3. "Investing in Real Estate with Lease Options and Subject-To Deals" by Wendy Patton

Check the local library first to check them out, if that doesn't work buy on Amazon for kindle or go to abebooks.com for used books on the cheap.

There may be people that disagree with my recommended list of books. That's okay though - to each his own. These books have helped me, and in many cases, helped me in more than just real estate investing (I also own an eCommerce company built through the principles learned from the foundation books). I've got other books i'd recommend as well but that is a start.

That writeup was longer than I originally intended. But hope this helps!

Good for you Tolby. I wish I started when I was 18. Jumping in now will make things really click for you when you reach 30. If you are anything like me, it is hard to want to think long term when you are your age, but the law of compound interest tells us you should be. My advice would be to start learning with all the amazing resources now available through the internet. These forums are an amazing resource. I also would recommend reading some books. Consider the following books:

Foundation Books to Read First - it's important to have a foundation for financial intelligence before beginning investing. If you can't save your money, you won't have any to invest. Read these first:

1. "Think & Grow Rich" by Napoleon Hill
2. "The Millionaire Next Door" by Thomas J Stanley
3. "Four Hour Work Week" by Tim Ferris
4. "Rich Dad Poor Dad" & "Cash Flow Quadrant" by Robert Kiyosaki

How to Books for Real Estate Investing in Particular - When you've built the foundation, I'd recommend

1. "The Millionaire Real Estate Investor" by Gary Keller
2. "Creating Wealth" by Robert Allen
3.  "Investing in Real Estate with Lease Options and Subject-To Deals" by Wendy Patton

Check the local library first to check them out, if that doesn't work buy on Amazon for kindle or go to abebooks.com for used books on the cheap. 

There may be people that disagree with my recommended list of books. That's okay though - to each his own. These books have helped me, and in many cases, helped me in more than just real estate investing (I also own an eCommerce company built through the principles learned from the foundation books). I've got other books i'd recommend as well but that is a start. 

That writeup was longer than I originally intended. But hope this helps!

Interesting opinion. Thanks for your thoughts on the matter. I disagree with your statement, because an unethical person wouldn't call the city to ask them about the property and zoning. But, to your point, I recognize the value of erring on the side of caution. But if I never even considered it, I would never know what the city would allow. What if the property is in a single family neighborhood but is allowed to be a duplex per the city/bldg permits/ or whatever. You never know until you ask. I know someone who bought a nice house in a great neighborhood with an exception letter from the city stating they can legally rent it out as a duplex. You never know until you ask.