All Forum Posts by: Jon Khalil

@Chun Kuo Navy Federal Credit Union- first time home buyer program

@Cody L. To give specifics, our Mortgage came out to $3339 and our HOA fee is $450. Giving us a total of $3789. We are hoping to turn this into a medium term rental where we can get anywhere from $4-5K per month in revenue.

@Cody L. Renting per room we can cover our mortgage right now. Refinancing would just be gravy. Besides, we could turn this into a medium term rental and easily cash flow (with more cash invested for furnishing of course) but we don’t care in a year from now what it will be worth because in 5-10 years, especially in SD, it will be worth a whole lot more. It’s all about the long game my friend.

@Dan Heuschele hey Dan. Thank you for your thoughts, and sharing your concerns. Ultimately, we found that we can make this deal work with multiple exit strategies.

1) we bought below retail according to our appraisal report and data. A similar floor plan sold for $530K fully renovated in August. We bought ours at $490K. I know it's a thin margin, but we loved the location being so close to SDSU that we figured we can always have this be a rental in the long run. 2) We are renovating ourselves and plan to add value to get it to an ARV of $530K+ (Conservatively). 3-5) we are certainly speculating and you could be turn about the rates, but in reality no one knows. Whether they go up or down, we have an exit strategy to come out on top of this deal. If we can't BRRRR we can sell it. If we can't sell it, we can always have it be a short, medium, or long term rental depending on what our goals are at the time and what would be most profitable. Ultimately, we wanted to get our foot in the door with a property in a great area and we feel we can definitely make this deal work in a number of ways. The long term goal for us is cash flow, so that is why we hope that BRRING this deal will be the optimal strategy.

@Tim G. Hey Tim! You’re right, they are certainly speculative. But I have multiple exit strategies. If rates don’t go down after this recession (which on average lasts about 17.5 months- you can fact check this on Google) then we will just use it as a medium term or long term rental. Worse comes to worse, we bought this deal under market value and we had instant equity when we bought according to our appraisal. We can always just sell it, take out the equity and move onto the next property. After adding value ourselves, we expect to win in the next 2-5 years, even if rates don’t come down.

@Christian Perez Hi Christian, welcome to BP! I just recently moved to San Diego a year ago and bought my first property here last month. I plan to rent per room for the first year, keeping a room for myself, and then fully rent it out after a year. This is my personal strategy because after a year I can refinance, cash out, and buy another property while hopefully having my first home cash flow positive and rinse and repeat. It's essentially a long term BRRRR and short term house hack deal. Let me know if you have any questions and I'd be happy to help. Just sent you a connection request!

@Golan Corshidi Hi Gola ! I just sent you a friend request. I’m looking to do this exact same thing here in San Diego. Would love to pick your brain on how the experience has been for you so far.

Investment Info:

Condo other investment.

Purchase price: $490,000
Cash invested: $6,400

A 3 Bed, 2.5 Bath 1400+ Sq.Ft. Condo located 3 minutes away from SDSU. This property was purchased using 0% down and 0 PMI from our Credit Union. 6.25% interest rate. Closing costs were about $8300 and we received a seller credit of about $3350. We plan to fix it up doing all the work ourselves, get it rented by December 1st, and refinance once rates are back in the 2-3% range to see real cash flow.

What made you interested in investing in this type of deal?

It was the best way to get our foot in the door. After researching all different types of methods of investing in Real Estate, I found that the BRRRR method was the best for long term wealth and being able to cash-out refinance is the key to receiving tax free money to go buy the next property.

How did you find this deal and how did you negotiate it?

Redfin, we looked at comps and had to make an aggressive offer since this property was in a multiple offers over listing situation.

How did you finance this deal?

We invested 0% down and only paid closing costs, which after the seller credit we actually ended up getting about $4K back.

How did you add value to the deal?

TBD- we are planning on upgrading the floors, fixtures, paint, and Kitchen.

What was the outcome?

TBD/In process

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Twana Rasoul is a great Realtor here in the SD area, and he made our transaction smooth and we were very happy with the end result. I highly recommend him.

@Dan Heuschele @Rob Massopust @Stephen Tanquary

Hi everyone!

Wow it is unreal looking back at this post a few years ago and seeing where I was with my REI career, a lot has changed since then.

I’ve gotten engaged

I graduated college

I have a salary 9-5 job that pays a decent and steady income

I got my first apartment

And currently I am in the hunt for a condo. I have the savings and am getting prequalified for up to $300K. I have my eyes set on a condo in Santa Ana listed at $268,000 but in a great location near South Coast Plaza, John Wayne airport, and the freeways.

I decided to do this simply because I'm young, have the money for it, and would rather have my monthly expenses go towards an asset. I am hoping for appreciation, but also figured I could see my Fiancée and I living here for a long period of time where we could fix it up, refi, BRRRR, or move out and collect rent from tenants.

You guys all give great insight into making this move, and I really appreciate the feedback and tips.

What do you guys think? You think it's smart to dive in now while I'm young and I can? Or wait till the market dips a little more? I personally have been waiting for this a long time, and feel that the best way to learn is to dive right in sometimes! I completely understand the risks involved as well in terms of expensive out of pocket expenses, and HOAs- I really wanted to do SFH but just don't have the income or capital myself to do it at this point. At least not in CA. That's where I feel like this is a great first step for me.

Let me know you guys think, and thanks again for bringing this post back!

@Amanda Fallon I am interested in getting to learn more from you about that possibility! Please send me a PM so we can discuss this further!