All Forum Posts by: Jack Jiang

My mortgage broker was offering to lock the current rate (investment, 6.4%, no point) for 6 months, at the cost of 0.5% of the mortgage amount. I am thinking about whether I should take that bet or not - say I pay 2k to lock 400k of mortgage, and wait until the end of the year to buy the dip.

Hi fellow BPers, Would this be a good idea or a terrible one? Seems to me that the interest rate is just gonna go up and up, and the market is cooling down visibly now.

What if there is no dip?

Is this new construction?

If by the time closing comes rates have dropped you can see if your lender will adjust the rate or go close your deal with another lender.

No, I haven't signed any contract for new construction. In another word, it's a naked put where I am betting that there's an interest hike (plus a possible dip) in 6 months :) The premium is 0.5% mortgage amount and worse case I lost that amount.
What I am not sure of is whether this could be a good bet to start with, or it's merely a terrible idea for an experienced investor!

So you pay a fee up front to hold the rate for an extended period of time for a property you aren't under contract for correct?
I hadn't heard of that before. So if this is possible, are you locked at the same rate if rates go down or do you get the benefit of a decreased rate within the six months too?

Well, the broker said that if the rates go down, I can float down to better rates - but I won't say for sure until I see the loan agreement.

0 Votes

Atlanta, Georgia

Quote from @Rodney Sums:

Quote from @Jack Jiang:

Hi fellow BPers, Would this be a good idea or a terrible one? Seems to me that the interest rate is just gonna go up and up, and the market is cooling down visibly now.

What if there is no dip?

Is this new construction?

If by the time closing comes rates have dropped you can see if your lender will adjust the rate or go close your deal with another lender.

0 Votes

Atlanta, Georgia

Hi fellow BPers, Would this be a good idea or a terrible one? Seems to me that the interest rate is just gonna go up and up, and the market is cooling down visibly now.

1 Vote

Atlanta, Georgia

@James Wise Yeah I won't invest >10% in crypto since it's just a huge casino right now. Zero-sum game there.

0 Votes

San Jose, California

Quote from @Anna Patty:

@Jack Jiang Hi Jack, congratulations on getting started! Its nice to meet another Rookie investor in the Bay Area! We bought a SFR in 2014 in the East Bay and in 2016 purchased a MF property in Vallejo - detached 3/2 + 1/1 home on a large lot. Got a great deal then (although prices have gone up) but I think you're able to still find quite a few MF properties in Vallejo. We had a Section 8 tenant in the front home and I made a ton of mistakes and learned a lot from this investment purchase. But all good now - we have a property manager and its become a passive investment now that we hired this property management company. Happy to share more details if you are interested!

@Brian Garlington I've been looking at the Cleveland OH area recently. Seems like a great city to invest in - are the property management companies hard to find? Do you have an agent that you work with in the area?

@Kushaal Malde @Jack Jiang I am also actively looking at syndications and private funds deals. There are quite a few options out there and quite overwhelming! Do you have any research tips? Is there a Bigger Pockets Bay Area meet up group? Would be nice to connect IRL!

Also for syndications, I haven't been researching too much. I heard Crowdstreet and Fundrise are fine, and there are tons of other smaller ones on the market. I am considering investing in that since the next few years is gonna be tricky to deal with.

0 Votes

San Jose, California

Quote from @Anna Patty:

@Anna Patty Thanks a lot for replying! I haven't been investigating East Bay since I heard California is heavily biased towards tenants (especially during COVID time). Also I took a look at the MF around the South Bay, the appreciation is somewhat worse than even a century-old SFR which is confusing.

So how is the rental market in Vallejo, and would you recommend investing there in the next few years?

0 Votes

San Jose, California

Thank you Allan and Brian for the great advice! I will keep looking at the MF possibilities and try to switch my TH in the next couple of years.

0 Votes

San Jose, California

Quote from @Raju Balakrishnan:

It is bay area, completely an appreciation game it is. Wait for mid term, mostly an HELOC From your town home will be sufficient for your next down payment or a few homes in GA. Will the mountain view home Cash flow? not likely. Will returns be worth it, most likely yes! You might have seen that already in your home value. Bay area, getting your first property is hard, but if you do not need cash flow and wait for equity for long enough it may do wonders. Again it is market dependent, but all investments are.

Thanks Raju! Yeah I was regretting not buying a SFR at the same price range. TH here typically appreciated much slower than SFR (even a 2010TH vs 1965SFR) due to the severe land shortage. Btw why would you suggest HELOC rather than cash-out refi?

1 Vote

San Jose, California

Quote from @Kushaal Malde:

Turnkey typically means SFH. Since you're already buying in GA, you could connect with turnkey providers local to your existing portfolio. But in response to your first post, your 2 thoughts are sound: a house hack will be something you could do tomorrow and will benefit you immediately and meanwhile learn more about syndications and PE if you're time is better spent at your day job (do what you do best, hire out the rest).

Also, I'd love to connect--- I'm pretty local to you here in Redwood city!

Thanks for the great advice Kushaal! Yeah I am convinced that house-hacking is a good idea now (although it's really hard to find MF properties around the Bay area), and I will see what I can do while focusing on my day job.

1 Vote

San Jose, California

Quote from @Michael Deering:

Get out of Cali.

Best decision I've made in last 10 years

LoL yeah that's what bunch of my colleagues and friends are doing. Unfortunately, I worked in Tech so the Bay area is still one of the best places to be in. But I am glad to see that remote working has become a trend now - so I might just stay around until I settle down in one of the companies.

1 Vote

San Jose, California

All Forum Posts by: Jack Jiang

Jack Jiang has started 5 posts and replied 23 times.

Post: Should I lock the current mortgage rate for 6 months and bet?

Post: Should I lock the current mortgage rate for 6 months and bet?

Post: Should I lock the current mortgage rate for 6 months and bet?

Post: Bay Area new investor

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Post: Bay Area new investor

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