All Forum Posts by: Josh Young

@Georgianna Kalmon

That is a great question. The biggest question to ask yourself is: what will you do with the money and what kind of a return can you get vs leaving it in the property. The deferred maintenance makes it more complicated for sure.  I wouldn’t worry about property values going down if we have a recession, they have gone up in 7 out of the last 8 recessions because interest rates typically decrease in a recession. I’m in a similar position as you with one of my properties, but I have decided to keep it long term since I did a cash out refi 18 months ago, I figured it’s a 3 year break even on tax savings vs appreciation, but I like my leverage on it and I don’t have the deferred maintenance that it sounds like you have.

@Nick Howard

Remember Rich Dad Poor Dad. The cash flowing duplex is an Asset. The primary residence is a liability. Do not sell an asset to buy a liability. You also kinda answered your own question in your numbers, keeping the duplex makes you more money, and don’t forget principle pay down, that will be a few hundred dollars a month too. And if you change your mind in a few years you can always sell the duplex at that point.

 @Anderson Bigate Nogueira

The HELOC will allow you to keep your current loan and your current property and you will only pay interest on the money that you borrow not the full amount like with a cash out refi, and it will be interest only during the draw period. When rates go down in a few years you will be able to do a cash out refi at that point and pay off the HELOC. Selling sounds more simple, but if you can rent it out and keep that low interest mortgage I'd try to figure out a way to leverage it instead of selling. If you change your mind later you can always sell then.

@Gloria De la Fuente

Go for it! But don't do a month to month lease, go for the 12 month lease. Get the house clean, take great photos, write a detailed description of the property and lease terms for the listing, price comparable properties on Zillow, pick the median price, not the max, if you price it too high you will get unqualified applicants, then list it on Zillow Rental Manager. Reply to every inquiry, but make people apply through Zillow, so you can view their Credit Report, Background Check, and Income. The key is to attract a great tenant that is over qualified, I like 700+ credit score, clear background check and income 4x rent. I use Zillow for payments too, it's easy and free. Good luck!

Your new purchase will have a mortgage payment that is much higher than market rent, but in a couple years you will be able to refinance and rents will continue to increase over time, so you will be able to do it again at that point, just make sure you have a least 6+ months of reserves.

Here is a post I did about how I kept my house as a rental, then did it again. https://www.biggerpockets.com/...

@Curtis Roth

If you can get someone to partner with you (co-sign the loan), because you will most likely need help qualifying for a mortgage, but it will be owner occupied if you live in it, so low down payment and lower interest rate than investment properties.  You can buy a 4 bedroom house (or less and create more bedrooms) semi near your college and rent out the rooms to your friends, you could do really well.  If not, no big deal, keep saving and when you graduate college you will have good w-2 income and will be able to buy a house yourself and rent out the rooms, then buy another the year after and keep the previous house as a rental.  Read "Rich Dad Poor Dad" and "The Millionaire Real Estate Investor" and talk to a lender, so you start to learn the rules of qualifying for a mortgage, just walk into your local bank and ask to talk to a mortgage lender, they will be happy to talk to you and this will really help you create a plan.

@Soniel Estime

I think this is why people start small and do a few turn key SFH and build their way up to more units and more rehab, but good for you for taking it head on with a full gut rehab duplex and then leveling up to the quad. Man when I bought my 1st house I was so nervous, 2nd house too, then I started seeing results, started learning more and started to get more confident and comfortable. It's good to be a little nervous, that means you are learning and growing, and it keeps you in check, so you don't get out over your skis, it's actually good to listen to your body, I'm not saying don't take action, but I'm saying maybe run a stress test on your liquidity to make sure you can weather any storm, I have founding that adding cash to my reserves always helps me sleep better at night.

@Ryan Leake

If you look at 4 bedrooms your numbers will get a lot better, when you search on the mls filter by bedrooms plus instead of bedrooms, that way you find properties that an agent didn't list as a 4 bedroom because it's a 3 bedroom plus an office/den, but you can usually still rent it out as a 4 bedroom.

@Jenine Ly Garcia

I appreciate your ambition to buy a multifamily property to house hack, but if you buy a SFH and house hack the rooms you might be able to get started sooner, then you could make the jump to multifamily in a couple years. Just a thought, every time I look back I wish I would have bought sooner.

@Matt F.

Kinda, but if you are going to do that wouldn't you be better off not taking the money out in the first place, instead of losing 2.4%.  The only reason to do a cash out refi is if you are going to make a greater return than what you can borrow it for or to add to your reserves to mitigate liquidity risk.

@Tyler Turner

Use the co-signer to buy the property (but don't use all your cash, put as little down as possible) and start house hacking.  Then take out the student loan, they will give student loans to anyone, but if the lender sees the student loans on your credit report it could impair your ability to get the mortgage.  Really you need to speak with a lender so you can create a plan and take action, the lender is the key, they have lots of programs and guidelines and will be able to help you create the plan. Good luck!