All Forum Posts by: JooYung Choi

Hey Tanner, 

Some analysis I'd recommend:

-Market Rents

-How much renovation is needed to command top $ rents

-Is the home located in an appreciating neighborhood

Househacking is simple! You're just buying a house and renting it out to trusted and quailfied people to help cover the mortgage. If you are up for it, you could consider renting out the bedrooms in your own unit for maximal rents. 

I would consider selling if you have lived in the home the past 2 / 5 years since you have a decent amount of tax free equity in there but as long as you have a plan to reinvest those funds.

By your numbers, since you have an amazing rate and high rents, I would consider renting it out if you believe your area will continue to grow in value. Sell it later for more money. True wealth is in the equity!

You could consider going for a STR in a vacation market that will give you way more cash flow to pay off the HELOC quicker. You would have to self-manage though, as paying a property manager will eat up most of your profits. More work, more time but you can take advantage of a nice cost segregation / bonus depreciation

Just do a 5% conventional for your next property.
Not sure why you'd need to refinance out of an FHA loan only because you want to use a FHA loan again. Your refinancing costs + new fha loan would be about the same as just using a 5% conventional loan for your next property. Plus you can use it for 1-4 units. Just not seeing a good use case for FHA these days other than the lower interest rate. I would refinance out of the FHA if your rate would become a lot better though.

Sounds like you need a hard money lender or a private money lender for your specific situation.

Seller's financing is the best way to go if yall can come to terms. In your scenario, maybe you could offer more money if they agree to your terms.

If you were satisfied with your previous lender's services and the difference in rates / points is negligible then I would say use him again. Since you are an investor, it is important to build relationships with lenders who know what they're doing. 

However, If you end up not choosing him as your lender, just know that you are not the one burning the relationship. This isn't the last home you will be buying in your lifetime.

He should not get upset that you are doing your due diligence. You need to know if you are getting a good deal or not! Personally, he would lose my business if he disapproved of me shopping around.

BP is definitely a good place to start when building your boots on the ground team. I would suggest finding realtors who also invest so they have an idea of what you are trying to accomplish. Bonus points if they can refer you to reputable contractors in the area. Finding a deal worth pursuing is one thing but managing a renovation out of state is a different ball game.

Do you have renovation funds to use outside of your down payment + closing costs? If not, you will have to utilize hard money which will drastically increase holding costs. How big of a renovation were you looking to tackle? The bigger the renovation, the more equity you will force but also comes with more risk. You also have to be wary about the end game when you are looking to refinance and pull money back out. Rents in the area need to be strong or a lender won't even approve you! (look up DSCR loans)

This is only the tip of the iceberg! 

If you ask me, I would much rather prefer investing in my local markets or at least somewhere I can drive to. I would only out of state invest if my boots on the ground guy is someone I can truly trust. 

Hey Kevin,

As a homebuyer, it is in your absolute best interest to shop around lenders for the best rates and terms. Is your previous lender a family member or a close friend? I find it weird that your previous lender gave you trouble. Business is business! 

Hey Andre,

If you are up for it, I would highly recommend buying a home that you can do renovations on to force equity! Buying that ugly house on a nice block will pay you handsomely in the future. And as you already know, buying the home as your primary residence will help you take advantage of the best loan product there is. Take the year to do powerful renovations like the kitchen, adding bedrooms and bathrooms and updating what needs updating (up to the standards of the other renovated homes in the area). Give yourself a maximum 1 year time line and move again! Now your fully renovated home is getting top dollar rents, you could probably refinance too since rates are poised to go lower (lowering your monthly obligation), you could open a HELOC before you move with the extra equity and use that to fund your next deal and now you have 2 homes! Point is, if you have equity, you have options!

Hi Tiffani, welcome to BP.

Great place to learn everything real estate. Any questions, ask away!