All Forum Posts by: Joshua Powell

Piggy backing off of this, right now I'm looking at a property down on Delaware Ave for my second househack. I've heard some mixed opinions on this area and looking for some thoughts. It seems if your at the right spots on Delaware you can be fine, but if you tread to far down where Second Ave is, is where it gets sketchy. The house is in really good shape and the area looks fairly clean, but a couple people I've talked to have a lot of concerns of that area which is giving me second thoughts... any other locals able to shed some light?

@Brandon Plombon Thanks for the help Brandon, read through the note carefully and didn't see anything regarding occupancy of the property, so it looks like I will be pursuing this. 

Hi everyone! Right now I'm in the process of getting preapproved for my second house hack. Currently live in a side by side duplex I purchased in September of 2019 where I get $1195 on one side and $450 per each bedroom(2) on my side, so the cashflow is great! With that being said I'm having a lot of difficulty getting this preapproval because Im already running into DTI issues. I'm a bartender and haven't claimed all my tips so my income is only $40k for 2018 and 2019 (I know, big mistake looking back at it), and even though I started doing that more this year, because of a furlough with the shutdown Im still only going to make $40k this year again. I was fortunate to find a bank that will use 75% rental income from both sides of my duplex even though they have only been rented since this past March (plan on renting the other bedroom out once I move out) and use 75% of future rental income of whatever duplex I chose to buy, so my DTI should still be okay with this property, but that leaves my a cause for concern for next year for acquiring future properties.

Since next year will be 2021 I'm assuming there going to go based off of my tax returns for 2020 as far as rental income, and I'm a little confused how banks look at that income. I was told not to write off too much as banks won't use any of the income that is written off, but that doesn't seem right as that would mean any Real Estate investor trying to show as much income as possible for loan purposes would be paying big tax hits every year. Is there a certain way you need to structure writing off your expenses so banks will still use your rental income? It almost seems it's better to use banks that will use lease copies instead of tax returns since they will most likely use 75% of that, which could be more than whatever you net income shows after expenses and write offs.I u nderstand this is more of CPA/MLO questions and plan on reaching out for a few answers, but figured I might get at least some it cleared up here first. Sorry if this post is a little disorganized, just trying not to shoot myself in the foot for this upcoming year!

@Brandon Plombon Yes, the draw can easily be done on their mobile app or website. I already transferred all the funds to my checking account to start seasoning them ( I know some banks want to see HELOC funds seasoned). So I dont really see how they would know what I'm using it for. Also I wouldn't use them for the primary, I have a few other banks/CUs I could use. I just want to make sure I wouldn't suddenly get a phone asking for the HELOC to be due lol

Hey guys, so a few weeks ago I closed on a 90 LTV HELOC for a duplex I househack. I was obviously was able to get this high of LTV because I was owner occupying the property. The HELOC is for $57k, but I had to use $30k of it to pay off a grant I used to help purchase the property (That's a whole other story, but essentially the grant had a ton of restrictions I didn't know about and after running the numbers I decided I was as way better off just paying it back) so only $27k is available right now. My plan was to aggressively pay off the $30k balance on the HELOC within 4-6 months while currently searching for new property to use the rest on.

Low and behold a triplex right on my street goes up for sale for $155k, and it looks like a solid deal. Since I live in a duplex on this street I know exactly what I can get in rent if I get the units updated (currently way under market rate for rent on month to month leases). If I could get it for $140k-$145k and update the property for $30k-40k, the ARV would be around $215k-$225k after getting rents up. I really don't want to use Hard Money for this as the property as it's in fine enough shape for conventional financing and the numbers wouldn't quite work given how expensive hard money is. I don't have quite enough to swing a ~$30k down payment and then another $30k-$40k in rehab, but I could do another 3%-5% low down payment loan and househack the place, then fix it up, get the rents up to place, and cashout refi sometime later next year.

What I'm really wondering is if the credit union that issued my HELOC would care or even know if I'm using the HELOC to buy another primary? When I initially applied for the HELOC, they asked if I planned to stay in my current residence for a year, and I said yes which was true at the time, but I didn't realize an opportunity like this would come up. Since I would be moving out of this duplex to the triplex down the street, would the credit union then call the HELOC due because its not my primary anymore?

I did mine through Hudson Valley FCU a few weeks back at 90 LTV for a duplex, but mine was a primary. You can give them a try

@Art Maydan You correct, I did the same exact thing: 5% down on an owner occupied duplex. I believe the Freddie/Fannie program is called "Home Possible" if you wan to give it a google search. It's similar to an FHA but doesn't required an FHA inspection which was crucial in my case since the property barely passed being conventionally financed. I'm in the same boat as you, looking to buy another house hack using a 3%-5% down payment and from my understanding it can absolutely be done. The only thing is you would need to finish occupying the current property you are in for another few months to satisfy the 12 month requirement. With that being said, it doesn't hurt to start looking now! I'm still waiting for my HELOC to close to get the funds available, but have been running numbers every day for everything that hits the market. the way the second I can buy something I know exactly what I'm looking for and don't have to hesitate to pull the trigger

@Greg Scott Appreciate the quick response! There was another small area in the basement with mold, I couldn't get the picture uploaded unfortunately. It doesn't seem the area in the bedroom and the basement are connected in anyway. I just wanted to do my due diligence and try to get the best idea possible before putting in a bid. Thanks!!!

Hey guys, looking to put a bid on Hubzu.com for a property with a current starting bid of $452k and an ARV of $700k+. Most of the rehab is pretty cosmetic, as the windows, siding, roof, structure, electric, and landscaping all are in good shape. With that being said, there is definitely a mold issue which will be the biggest ticket item. I won't have time to get an assessment done so I'm trying to do my best and get a conservative ball park number for the remediation. I know mold can get extensive and have heard of houses needing $100k+ worth of work (although I doubt this is anywhere near that lol). The house was winterized in March 2019 so the power and water are not turned on right now. The basement looks like it was sprayed with some sort of white powder that looks like it was used to kill most of the mold off, but wasn't officially remediated. The only spots I see the mold is in the doorway leading out the cellar door in the basement and in a small amount in the corner of the master bedroom. This does concern me that that are found in two totally different spots as my biggest fear is it being behind the walls, although I saw no evidence from the basement that there was any mold creeping through the walls. The house was listed as a short sale in 2012 with water damage, was rented through the MLS in 2015, and now it looks like it was foreclosed on. This is a house built in 2002 in a very nice and desirable A class area so I definitely want to work around this if I can,

but don't want to get myself over my head! You think if i budget safe $30k for remediation that should cover most scenarios?

Title says it all, looking to cash out refi the duplex I bought 8 months ago. Spent a fortune on renovations since I had no idea what I was doing, but I learned alot and have at least raised the value a bit. Owe $123k on the property and see the ARV being between $185k-$200k (being conservative of course). I tried a few banks and credit unions and they all keep saying 85 or 90 LTV is not possible on a cash out refi of a duplex even though its owner occupied. Anybody able to shed some light on this or recommend some lenders in the area that would?