All Forum Posts by: Joshua J Cawthorn

Almost all the lenders/loan officers in this thread (especially the ones with years of experience) are rolling their eyes at this program. And I get it, I feel similarly. This program is a quick-fix for a massive underlying problem: the asset prices are too rapidly rising in comparison to wages. The State's program will help FTHBs, sure. But this is still adding more debt onto an already-constrained group. It just feels like we're removing liquidity from the market, adding more partners/players, and ultimately making the real estate market even more competitive. 

A band-aid on top of a geyser.

Hey Alex,

I would think an agent/broker is better qualified to answer this question than I am, but one of the primary challenges you'll face is the appraisal. The ADU world doesn't have nearly the data set of comparable properties to provide good information, whereas a multifamily 8-unit will have plenty of comps. So your appraised value becomes a massive variable during the planning phase.

Any agents/brokers, feel free to correct me if I'm wrong here.

This is fascinating data! I live in San Diego and I never would have guessed this data based on what I'm witnessing.

It does appear to me that there is, what I'm calling, a "Millennial Movement" just generally southeast: from Texas to Florida and up to Tennessee, just so much movement into that area. I presume it has to do with purchase power and, to a lesser degree, political/cultural values.

With that being said, local demand (for San Diego real estate) has not waned. What I am seeing here is an incredible lack of supply, which is constraining prices upward and making movement within the sector almost impossible. Meaning: ain't no one buildin' and ain't no one sellin'.

Dan, you're the man. Purchasing power, especially for FTHB's, has been devastated by these rate increases. Coupled with asset pries rising and wages largely remaining stagnant, homes are becoming harder and harder for people to afford. So, to anyone reading this, if you and your spouse are both high income earners, you will likely find something you like. If you're coming in with 20%-100% down via cash or equity from the previous real estate run up, you will also be fine. 

To everyone else... well, now you know who you're competing with. 

House hacking is probably my favorite strategy for most first time homebuyers, if they are in a position to do so!

I bought my first house in 2014 before I knew anything about real estate as an investable asset. I bought a house because "you're supposed to" so I just bought one that looked pretty. Luckily, it worked out for me!

I used the VA loan to buy that house and I put $0 down. Although I had enough income to cover the PITI, I had just enough income to pay the housing bills. It was tight. Not wanting to live so heavily in debt, I rented out the master bedroom and I lived in the smaller bedroom. My total house payment was about $2650/mo and I rented out the master bedroom for ~$1,000/mo. And I lived like that for almost 4 years!

Absolutely worth it for all the reasons many have listed about: tax benefits, equity build, depreciation savings. It was the catalyst for every real estate move I've made since!

Have you ever used Thumbtack? They have a website and an app. I've been using it for years and, honestly, I love it. You can post your project and send it out to multiple professionals and they'll get back to you with a bid and you can proceed from there. It's free for you to use and I believe the professionals pay to be on the site.

Absolutely agree that this is just sales or business basics. Open with the request and then follow that request up with why. Business communications start with the most important stuff. Unlike college writing, which actually opens with the fluff and ends with the most important stuff.

This is a great post for wholesalers who are looking for strategies to discuss with prospective clients. Great post, Chris!

 Hey Dan,

Do you mind sharing for what reason(s) you disqualified the potential tenant? I find tenant screening strategy to be enormously valuable information. Thanks!

 +1 for this idea!

Although 3.5% down can be a challenge for some, it hopefully won't take years to achieve. Additionally, once you do close on the property, your personal out-of-pocket liability for the house payment should be minimized or removed from the income provided by the tenants. And even if you are still paying thousands out of pocket every month, that's still better than wasting money on rent for two critical reasons: not only are you building equity in your primary residence, but your building a lot of equity very quickly because of the income from the tenants who are contributing to your mortgage. 

Time in the market > timing the market