All Forum Posts by: Joseph Cacciapaglia

@Rhonda Benson 4.5% seems to be a bit on the high side. Have you shopped around much? Without knowing your rate on a HELOC, there is no way to compare the scenarios. Also, what is your current loan amount and the current value? If you have a significant loan amount that you're increasing the interest rate on, that's an important factor to consider. I have a good recommendation for a local lender, if you need another quote for the refi. I don't have a go-to for HELOCs at the moment. Hopefully someone else jumps in with that.

@Matthew Perry typically you'll make more money renting by the room, but you will have a lot more management issues too. The turnover in by the room rentals tend to be more often and you end up dealing with interpersonal issues. A lot of room renters expect the room to come with basic furniture as well. I think you're right to worry about the 1 bathroom. 2 room rentals per bathroom seems to be a pretty standard setup for many by the room rentals. Having 4 to 1 seems like it would cause more issues. I haven't done a ton of these deals myself, but have had a lot of clients in this space over the years. I think we'll see a lot more of these in the future, because of the rising cost of housing. If you don't mind dealing with calls about one tenant eating another's food or making a mess, then it could be a profitable decision.

@Tyler Brown you should definitely check with your CPA. Having your sister in the property can have negative tax consequences overall. Here is an older article that explains why: https://www.cbsnews.com/news/w... 

@Bill Gallagher if you just found out it's a condotel, what did you originally think you were buying? I worked on a lot of these deals back in the 2007-2008 timeframe, but haven't heard much about them since. At that time, there was often an approved lender for the entire development who would finance all of the individual units separately. You may want to ask some of the other owners who they have their loans through, because if that's the case here, they're the most likely source of a good deal.

@Yashar Fred most traditional rental investors that I know here in San Antonio are getting just over neutral cash flow in year one, when choosing areas where they expect strong rent growth and appreciation. Many of my clients have shifted to short term rentals, if they're looking for strong cash flow immediately.

It's in San Antonio. My finished product will have a very industrial look, which enabled me to save quite a bit. A lot of the container homes I've seen look exactly like regular homes on the inside, and if I were doing that, it probably would end up being more expensive. I'm planning to use it as an STR, so that gave me the leeway to use some creative finishes and solutions. It will be more of an experience for guests, but won't necessarily be something a typical home buyer would want to live in. As one example, I'm using empty steel barrels to support my vanities, I'll have exposed ductwork and electrical conduit, and I'm just using a clear coat epoxy over the existing container floors.

@Chad Pantel I'm building a home out of four 40' boxes at the moment. I plan to use it as an STR. I ran into a lot of problems that neither me nor my contractor anticipated. I was able to get permits and in the end will have a very unique product, but it wasn't cheap.

I'm probably still 2 months away from completion, and I'm on my 3rd contractor. At the end of the day, it will end up being almost as expensive as a stick built house. I think if I built a second, I could bring that down a bit. There were some expensive lessons.

@Benjamin Hazlett more than 80% of my clients are out of state investors, and most of them never step foot in the properties they buy. Find an agent that will provide thorough video tours for you and get an excellent property inspector. There really isn't a lot that you'll get by being there in person that you won't get from that combination. Be sure to ask your agent about things that the camera doesn't pick up like smells or sloping or spongy floors. If you plan to use a property manager, they'll be the best source for information about attracting tenants in any given neighborhood. Be sure to get them involved early as well.

@Alex Loera that's a definite maybe. The best thing to do is ask your lender. I've used personal loans as down payments in the past, but have run into restrictions once in a while. 1. The LOC will change your DTI, so be sure to check those numbers. 2. Some lenders dislike the strategy, but will let you do it if you've cash advanced on the line of credit 30, 90, or 180 days ahead of time. This varies by lender, so again, just ask them. 3. How are you turning the LOC into cash? Depending on the provider, you may or may not get checks or the ability to wire directly from your LOC. Even if you are, the title company may want the check earlier in the process than normal, to be sure the funds clear.

In general, it's possible, but it's always best to walk through the details with your mortgage lender first. If you don't have a good lender here in San Antonio, please let me know and I will be happy to recommend one.

@Ryan Brown and @Sandy Morales I use http://www.lawofficeofmichaelv... and have no complaints. He's set up my series LLC, drafted private loan docs, etc., and I don't have any complaints. Several of my clients have used him as well.