All Forum Posts by: Kahleb Kelsey

Hey Guys!

I've posted a couple times on here before looking for input, and I'd love to ask again for all and any advice. 

I am in the military and bought a duplex to househack in northern California when I was stationed here. That decision was the best I've ever made, and the duplex has performed incredibly and allowed me to build wealth and reserves for my next property. I would like to continue buying property, and through some refinancing strategies I will be able to re-use my VA loan, however any single family I analyze doesn't pencil out, and the one multifamily that would work for my family and I feels like a big risk, which is where my dilemma comes into play.

The property I'm looking at is a triplex with units that more closely resemble townhouses than apartments. It is in a very desirable area with high rents and is in pretty good shape, but it is expensive. Without going too far into details (I'll provide them below) renting out two units and living in the third would result in a net mortgage payment of around the max I can support with my housing allowance. When I do move out and rent out my unit, I will be breaking even in the best case scenario. It feels like I might be punching above my weight here, and taking on too much risk. Should I play the long game and wait it out and struggle through the first couple years since this area will definitely appreciate and rents will grow? Should I wait for another prospective property? Should I give up and just buy a single family? What do you guys think? Thanks in advance!

Details: 

Asking Price: $1.9M

Current rent per unit: $3100/month

Unit details: 3 bed/2.5 bath, 2200 sqft, two car garage, very nice on the inside, built in 1980

Hello all!

My name is Kahleb Kelsey, and I am currently in the Vacaville area in California, just north of the Bay Area. Before we jump into my dilemma here's some background info. When I arrived here I used my VA loan to purchase a duplex that I have been househacking since. I recently used the equity from this crazy market to refinance out of the VA loan and into an owner-occupied conventional loan with the aim of reusing the VA loan to purchase another multifamily property.

Here's where the dilemma begins.

It seems like every month that goes by makes it harder and harder to afford some of these properties, so I would like to jump in and hedge against appreciation and inflation, but I am unsure how. There are next to no opportunities to purchase multifamily properties in this area. They are few and far between, and when they do pop up, it is difficult for VA financing to compete with the other offers in this competitive market. The best case scenario for me would be to purchase duplex-fourplex within the next couple months, but that's beginning to seem like a pipe dream. Another option would be to purchase a single family home with the VA loan that doesn't cash flow with the aim of holding it and banking on appreciation and rising rents, but that seems exceedingly risky in this volatile market.

Thank you for any and all input!

Kahleb Kelsey

Hello all!

My name is Kahleb Kelsey, and I am currently in the Vacaville area in California, just north of the Bay Area. Before we jump into my dilemma here's some background info. When I arrived here I used my VA loan to purchase a duplex that I have been househacking since. I recently used the equity from this crazy market to refinance out of the VA loan and into an owner-occupied conventional loan with the aim of reusing the VA loan to purchase another multifamily property.

Here's where the dilemma begins.

It seems like every month that goes by makes it harder and harder to afford some of these properties, so I would like to jump in and hedge against appreciation and inflation, but I am unsure how. There are next to no opportunities to purchase multifamily properties in this area. They are few and far between, and when they do pop up, it is difficult for VA financing to compete with the other offers in this competitive market. The best case scenario for me would be to purchase duplex-fourplex within the next couple months, but that's beginning to seem like a pipe dream. Another option would be to purchase a single family home with the VA loan that doesn't cash flow with the aim of holding it and banking on appreciation and rising rents, but that seems exceedingly risky in this volatile market.

Thank you for any and all input!

Kahleb Kelsey

Hello all!

My name is Kahleb Kelsey, and I am currently in the Vacaville area in California, just north of the Bay Area. Before we jump into my dilemma here's some background info. When I arrived here I used my VA loan to purchase a duplex that I have been househacking since. I recently used the equity from this crazy market to refinance out of the VA loan and into an owner-occupied conventional loan with the aim of reusing the VA loan to purchase another multifamily property.

Here's where the dilemma begins.

It seems like every month that goes by makes it harder and harder to afford some of these properties, so I would like to jump in and hedge against appreciation and inflation, but I am unsure how. There are next to no opportunities to purchase multifamily properties in this area. They are few and far between, and when they do pop up, it is difficult for VA financing to compete with the other offers in this competitive market. The best case scenario for me would be to purchase duplex-fourplex within the next couple months, but that's beginning to seem like a pipe dream. Another option would be to purchase a single family home with the VA loan that doesn't cash flow with the aim of holding it and banking on appreciation and rising rents, but that seems exceedingly risky in this volatile market.

Thank you for any and all input!

Kahleb Kelsey

Update to the thread! In the end, I decided to take the chance and refinance into an owner occupied conventional loan. The rising market gave me plenty of equity in order to pull off the refinance without running into PMI. The next step will be to renewing my VA entitlement and finding another property in the local area to pursue so that I can continue my investing journey! Thank you @Jared Rine for your input and advice. Also, if anyone who sees this thread knows of any opportunities to acquire multifamily properties in or around the Vacaville area, I am officially back in the market!

Hey Allen! I live in Vacaville as well and let me tell you, I understand why you’re looking out of state for markets. I bought a duplex here to househack two years ago and have been trying to repeat that luck without success. Although I’m still looking for properties to owner occupy! If you ever want to meet up and talk real estate just let me know, I also wouldn’t mind good recommendations for electricians as my duplex is older and I’m sure there’s going to be work that needs done! Welcome!

 Unfortunately I’ll be out of the country on a mission till the end of the month, but should be able to make something late September or early October happen

@Phil Clark

Im also in the Vacaville area! Although I’ve only done one deal that i’m currently house hacking I’d love to meet up!

@Jared Rine...I appreciate the input! Especially from a lenders perspective. I've run into problems in the past with qualifying for loans due to the occupancy requirement, but it seems like conventional may be a bit more lenient on that front. As for a new VA loan would I need an LOE for why I was breaking the occupancy for the conventional? Thanks!

Hello everyone! My name is Captain Kahleb Kelsey, I live near the Bay Area in Vacaville CA in a duplex that I'm currently househacking. I purchased the duplex with the VA loan, and have just met the occupancy requirements. I am pretty confident that I have enough equity to refinance out of the VA loan into a conventional loan so that I can reuse my VA loan to get into another property.

Here's my dilemma: I can either refinance into an owner occupied conventional and keep the rate about the same and low, but I'll have to live in the duplex for another 6 months to a year. OR...I can refinance into a conventional investment loan, which would raise the rate about 0.5% and the payment about $200, but I can use the VA loan again at any time to get into another property.

There is no property that works for my situation that is currently on the market, so I'd be rolling the dice on whether or not the flexibility that comes with the investment loan is potentially worth the extra cost on the loan when there may not be a property that pops up that works for who knows how long. What do you guys think? Any input is greatly appreciated, thank you!