All Forum Posts by: Josef Hardi

Hi Cole, 

Pretty close to real life situation. What I ended up doing was getting a duplex in Southern California, I plan to live in one and then STR the other. It'll be a learning experience for me. But I did my research via Robuild shows as well as airdna analysis.

My next STR would probably be in destinations that I would love to personally visit every year. I'd probably try to get a second home loan for that.

I did explore mobile home park, but after further consideration, I'd rather get a duplex / SFH because of appreciation factor.

I also did explore flipping and/or BRRR, however, I would first need to have a solid construction/renovation team. I decided to wait on that until further notice.

All the best!

Hi Michael,

I have not done any flips myself, but after listening to the podcasts and reading some tips in the forum, here's what I wanted to share:

1. Work with a local appraisal. Pay for their service, and make sure every dollar you are spending will go towards appreciating the house. Appraisal costs $500, but that info might help you save thousands.

2. If you don't have the budget for an appraisal, then look at recently sold properties within 1-2 miles of the area. Get a good feel of the condition of their location. 

Hopefully by doing the above you can see what upgrades are worth while. I believe it all depends on your neighborhood. 

Hi Jessica,

I would want to know about:

1. Population growth

2. Tech company presence

3. Average annual income

4. Markets in the area (A, B, C, Ds)

Hi Hadiya, 

I did a cash out on my property back in January 2022, I got 75% LTV out of it. And then I applied for a HELOC with a different lender, I was able to get another 5% out of it. I called a couple of different lenders, and not all of them are willing to go to 80% LTV. Some didn't even want to go pass 50% LTV.

One thing to note is, I do not plan to use my HELOC to use as a downpayment for another property. I used my cash-out amount for that. I would only use HELOC if I have an exit strategy or if I know I can pay it off before it balloons.

A couple of suggestions:

1. Do you have enough capital for a 20% downpayment? If so- maybe consider a DSCR loan.

2. Have you used FHA loan ? If not, you can take advantage of the lower downpayment, as well as low interest rate. Just remember FHA loans have a high mortgage interest. Check if the monthly expenses make sense.

3. Also make sure that you are not stretching yourself too thin. Maintenance costs can creep up, and you want to have some amount saved up for those hiccups.

All the best!

Hi Dustin, 

I've never wholesaled myself, but I have done a lot of research and networked with a few. They all put emphasizes in building a sellers network, even before you start finding properties. Once you have a list, you can get a better sense of what they are looking for, this will help lower the contract time. Also- try connecting with local FB investor groups and try to be an active member there. 

All the best!

Hi Baris, 

Congrats on having a cash flowing property, that's awesome! From the recent podcasts, due to high inflation and considering how easy it is to borrow money, BP hosts seem to lean more towards investing in more properties (versus selling them off). Another consideration would be:

1. Do a refi cash out, taking out 25% equity, apply for a 15 years on your main property. This might put you at around 6% interest rate. With a $1,400 income (modest capex of 3%), the property should continue to pay for itself in the next 15 years. You will continue to enjoy the high appreciation in Southern California. I assumed of about 0.8% property taxes, $1k/yr insurance, 5% repair & maintenance, 0% vacancy, 5% capex and 10% management fees.

2. With that 25% equity ($125k - $10k closing cost = $115k), you can get one 200k  property in Atlanta, Georgia with a 55% downpayment ($110k). For example: 1570 Langston Ave SW, Atlanta, GA 30310. I just did this on redfin, I am not familiar with the area so I am not sure if this is a good location or not. This is just an example. Checking the rent average on this location and putting all of those info on the BP rental calculator, you'll have about $400 cash flow. 

The end result of this scenario would be less cashflow, but you get to enjoy appreciation of two properties. Conservatively, if both properties appreciate 5% that's $35k in equity each year.

Looking forward to what others are thinking. 

Hi Peter, 

We really wanted to find a property to house hack. But came across a couple of issues:

Property prices are so high, we would use significant capital towards down payment. It would leave us at a very tight budget for renovation costs. 

Plus we currently do not have connections with contractors, and therefore we don't have a way to accurately budget the costs or time. 

In the end we decided to pursue a duplex in South Bay that is move in ready. Would be interested in others experiences as well.

Hey Gonzalo,

I did something similar last December. I was able to refinance my primary residence and took the equity out. It resets my loan, and I am left with 75% LTV on the current primary. Originally I was going to use this capital to purchase an investment property, however, I pivoted and ended up getting a duplex that I will be residing and renting out.

I had no problem getting pre-approved for my loan, they did ask where the capital came from, and I had to turn in the refi docs. I also have to submit a lease for my current primary residence, that will state how much i'll be charging, etc. To answer your question, yes- they do take into account the income potential. But you do not need to find a tenant first before finding a loan, just a projection of it. The loan underwriter will do their research to make sure your rental price is reasonable.

If you are not qualified, then you can explore other non-conventional mortgage such as DSCR. They have a higher rate, but they don't look at your DTI only at the projected rental income. You can contact brokerage company such as: https://www.the1brokerage.com/ to shop around.

A couple of other things to note:

1. Current interest rate for 30 year conventional mortgage is close to 5.2% Make sure you calculate your new monthly payment if you pursue refi.

2. Second home and multi-unit loan is going to be more expensive than the primary residence loan. 

3. You can explore FHA loan for your next property (assuming this current one is not on FHA loan), so you may not need as much downpayment.

4. Also consider taking out a HELOC loan ( I was able to take mine out up to 80% LTV). I did this with an exit strategy in mind though. For example, if I did HELOC to renovate my home to force appreciate it. I had planned to refinance it at the higher appreciated value and pay off the HELOC.

All the best!

Hey Mary, 

I normally use neighborhoodscout, but it shares the same limitation of ADT.com. I did a couple of searches and came across this: crimemapping.com. It's kinda neat, you can look at location of the reported incidents on the map.

Hope that helps!

Hi Eron, 

I've never done one myself, but when I was considering renovations for future properties, I would contact the "city planning" or "zoning" department of that city you are looking to invest in. I have done it with a couple of cities, and they are really helpful (some cities are more responsive than others). Simply go to the city's website, and look for email / phone info of those departments.

I was able to send the floor map, and general ideas of renovations. The city planner then was able to direct me towards the specific departments to contact and pass along further questions. 

They do all of this for free, just a lot more legwork for you. After a certain point, they might also recommend a structural engineer / architect etc. But I bet there's a lot of questions you can get answered even before you pay for those services. 

Best!