All Forum Posts by: John Vandivier

Thanks Reid!

FHA over conventional to lower cash out of pocket and maximize cash on cash.

The three risks I'm thinking about are:
1. Being able to find a deal at all
2. Time cost
3. Unexpected costs

In my experience, new construction has fewer unexpected costs and a better warranty if an issue is found over the lifetime of owning the property compared to buying and fixing a junker. Maybe just my experience though.

With time cost, I really mean hours of hands-on work. I'm not in a rush to own a property, I can wait for construction. I just don't want to spend hundreds of hours on this project as that alone would nuke ROI (I'm a software dev, my hours are expensive). I'm thinking that sending out mailers and negotiating a deal could take a long time, it could be expensive, and I might not find a deal at all from that process.

If anyone has info on the cost and success rates of doing mailers or other off-market contact strategies that could improve things. I'm sure there are some software solutions that could save me some time too but I don't have a trusted tool at this time.

I'm trying to enter the Austin market in 2022 and I'm looking for advice about how to do this optimally. Questions and comments are both encouraged!

1. 3-fold motivation for moving there: i. I'm from the area and have friends and family in the area. Free babysitting when I need it. ii. My day job is coding and it's booming for that. iii. My side gig is RE and it's booming for that too.

2. I qualify for FHA so I'm trying to enter via House Hacking. 4 units preferred, but 2-4 OK.

3. I don't see any good deals in Austin proper on the open market. I do see some OK deals, mostly SFH w/ in-law suite, in adjacent towns and counties and I'm fine with that. Specifically, I'm considering Travis, Hays, and Williamson counties. I'm OK with up to an hour commute to downtown Austin but closer is better.

4. I see some OK deals outside Austin proper as mentioned above, but how can I find an awesome deal?

a. I'm considering FHA new construction loan, contacting off-market property owners, or buying and fixing a junker.

b. I think the FHA construction loan is the lowest risk option here so I prefer that...What do you think? Am I not thinking of another option? I think the FHA construction-to-perm could let me get a 4-plex at or under market when I really can't find a 4-plex elsewhere, and maybe lower maintenance or slightly better rents bc new construction.

Thanks all and feel free to connect if you're in the TX or VA market (where I am currently). Open to joint deals in the future, although not for this FHA.

There's no way I'd take out a 50k 13% interest loan. Can you do a 401k loan or something? The advantage of today's RE market is low-interest rates, and your strategy doesn't leverage this. Build up some capital in stocks for now and fund yourself at a lower rate when possible.

I heard back from county today and I'm super confused by the response:

That sounds very much like "we don't give preliminary assessments of subdivisibility" to me.

@Doug W. Thanks man. Makes it pretty clear to me a lot would need to be subdivided or rezoned for a secondary unit in Fairfax County. I got a civil engineering firm that can survey and apply for subdivision for 10-15k but I have no idea how likely that gamble is to succeed so I can't really calculate ROI.

@Charan K. Thanks for the link! That Alexandria municode site says R-2 purpose includes "Two-family dwelling." Does this equate to two dwelling units?

According to Fairfax County, each dwelling unit is allowed to rent to up to two people who are unrelated to you ("roomers or boarders"): See “Are there any limitations on how many dwelling units can be built on a lot or on how many people may occupy a dwelling unit?"

So if there are two dwelling units and one is owner occupied could there potentially be two or three tenets on the lot? For example, rent out the basement and also rent out a detached guest suite or garage with livable space.

My understanding is R-X designation indicates residential where X is the number of dwelling units per acre allowed.

I fully understand why a second dwelling unit could not be created on this R-1 zoned lot of about .6 acre:

4420 Village Dr, Fairfax, VA 22030

I do not understand why a second dwelling cannot be created on this R-2 zoned lot of about .6 acre:

8909 Bordeaux St, Alexandria, VA 22309

That the second property is not sub-divisible was mentioned to me by a realtor, not the county. I haven't heard back from county's engineer of the day. Looking for info in the meantime.

What are some companies who could build a 4-Plex in Northern Virginia? Suppose I have a half acre or more. The company doesn't need to be local, but it needs to meet local code of course.

To make the question more clear: Can I buy a property with 5+ units and only lease out 3 of them in order to obtain an owner-occupied FHA loan?

For example, say I buy a 12 unit property. For simplicity, say they are all 2/1 units. So I keep 3 2/1 units and then I say the rest of it is a giant unit which I am occupying with 18 bedrooms and 9 bathrooms.

I'd like to buy or construct an owner-occupied fourplex as a first deal. I'm not seeing a bunch of high quality 4 plexes in my area, nor am I seeing a bunch of 4 plex builders. I certainly might be looking in the wrong places and welcome resources, but I wonder:

1 - Can I buy two seperated but adjacent duplexes as a fourplex? 

2 - Could I build two duplexes and some sort of connecting structure like a single entryway and finance it as a 4plex?