All Forum Posts by: Jaren Woeppel

Hey, Abigail

There is a lot of great information provided here and I agree with most everything. I would reiterate; 1. Do the math. Look at both scenarios using your numbers for your area, and if the ADU pencils out better in your investment criteria than a new purchase, great. 2. Think about the lifestyle each investment brings. That is something you can not put in a spreadsheet, but is a very important consideration in real estate investing. Running an Airbnb on the same property as your primary residence, is much different than a separate property. Trust me, I've done both! Even if the numbers are great, the lifestyle factor is something to consider. Everyone has their own preferences, but I will tell you that we converted the Airbnb on our property to a long term rental.

Best of luck and keep us all updated on the process and how everything works out!

Hey, @Mat Garcia 

A lot of great questions in there. Couple of quick thoughts that may help. 
-Getting into a situation where you’re borrowing additional funds to close, which if it is an unsecured personal loan, will have an astronomical interest rate compared to borrowing a secured debt like a mortgage. So I would try to avoid that kind of debt, and try to only get low interest debt if you are needing to borrow. 
-Have you thought about potentially buying a house-hack property? Buying a house for you to live in, that also generates income. For example, buying a duplex and living in one side and renting out the other. There are may other ways to do it but the point being, you are not only buying a primary residence for you to live, but it also is an investment because it is bringing in money for you every month.

Great question, Jamie. I often ask the same question for my local market here in St. Augustine, FL. I always end up coming back to asking myself, do I want the lump sum cash now, which will be subject to potentially capital gains tax, or do I want to build equity over time? Sometimes, especially if you have another project in sight that you could roll the proceeds from the flip into a larger deal, maybe that will be the best move for you. Also, it would be hard for me to imagine, in 5-10 years, assuming your BRRRR strategies were all purchased and refinanced at appropriate risk levels for you, that you would not be cash flowing and the value has appreciated substantially.

Either strategy, you will need a good GC or your own subs because that is going to be crucial for either strategy. Question for you would be, what is your long term strategy for investing in the Tampa area? Are you bullish on the long term value in Tampa?

Please do!

 Welcome to the community! I sent you a connection request as well, and I am looking forward to discussing this further. 

Hey Andrew, welcome to the community! FHA 203(k) loans are a great way to get into a property, add value, and set yourself up for strong equity when you eventually rent it out.

Biggest things to watch out for:

1. Contractors & Timeline – The loan requires HUD-approved contractors, and the rehab process can take longer than expected. Make sure you’re working with a lender who has experience with 203(k) loans and a contractor who understands the program’s requirements.

2. Loan Process Can Be Slow – Unlike a standard mortgage, the lender will be heavily involved in the renovation funds, which means more paperwork and potential delays.

3. Strict Repair Guidelines – The work has to improve the home’s safety and livability, so luxury upgrades usually don’t qualify.

4. Living Through Renovations – If you go with a Limited 203(k) (up to $35K in repairs), it’s usually manageable, but for a Standard 203(k), major work might require you to live elsewhere for a bit.

It’s a solid strategy, just make sure you’re working with the right lender and contractor so things go smoothly.

Hey, LIsa

Thank you for sharing this with the community. While I unfortunately do not have much helpful information to pass along to you at the moment, I am interested in following along with this thread and learning something. 

I think this is most valuable because there is a lot of discussion surrounding owning investment property in an LLC or not, and this insurance topic rarely comes up in the discussion. Let's say you did own the rental in an LLC, would that change the way insurance companies would view this? I am not an insurance agent, but I would be curious to hear from someone in the field who could explain how this would have played out differently had the properties been in an LLC and not a personal name. I am assuming you would be the one who owns and operates the LLC, so essentially, you would sign for the insurance policy would it still come up?

Interesting topic!

You’re in a solid position, but the challenge here is that your equity is tied up in a property that’s cash flow neutral—which means pulling cash out could push it into negative territory if you’re not careful.

A HELOC is the most flexible option, even if you're planning for long-term investments. You don't have to use it like short-term debt—you can pull from it strategically and pay it back at your own pace. The main thing is making sure your investments produce a return that outweighs the cost of the borrowed money.

A full cash-out refinance could work down the line, but with rates where they are, you'd be trading a 6.25% ARM for something likely higher, now that it is not an owner-occupied property, which may not be worth it unless you really need the capital to scale. If you don't urgently need the money, letting appreciation and rent growth work in your favor for another year or two might put you in a much stronger spot.

If your goal is to stay liquid while keeping expenses low, a HELOC is probably your best bet for now. But if you're comfortable waiting, letting equity build naturally could give you better options down the road.

Great questions to ask. We’d need to know a bit more about your current loan balance on the house with the 2.25% interest rate. Knowing how much you still owe will help figure out the real cost of losing that low rate.

Also, when it comes to borrowing the additional $170K, it’s key to know what kind of returns you’re expecting to make on that money. Automatically, you need to generate more than 7.5% return on that money just to break even, because that is your cost of capital. The higher the return you can generate on that $170K, the more sense it makes to refinance—even at a higher interest rate. But if the new investments will only barely cover the extra cost of borrowing, it might be better to find other ways to access the equity or just wait for a better time.

You’re in a great spot to start—good income, no debt, and time to save. The biggest thing now is figuring out what strategy actually fits you best. House hacking with a low down payment is one of the easiest ways to start since you’ll live for cheap and build equity. If you’re set on cash flow, you might have better luck looking out of state where your $30K goes further. Flipping could also work if you want to be more active and use hard money to get in with less cash upfront.

What feels like the best fit for you? If you’re not sure, start by talking to a lender so you know exactly what you can qualify for. That’ll help narrow things down and make sure you’re not spinning your wheels.