All Forum Posts by: Keira Hamilton

Hey Andrea! When you say the rents don't support current interest rates, how far off are they? Have you been able to calculate the DSCR?

Hey Matthew. Do you have any experience in construction? For a full tear down and rebuild, most lenders are going to want to see that you've done a similar project before.

You would have to decide if it's worth it to you to refinance since you won't be getting close to a 3.5% rate on a new loan. You mentioned consolidating other debt - perhaps that's at a high enough interest rate that refinancing at current rates would make sense, I'm not sure. Or maybe you find a property with strong enough cash flow that refinancing in order to purchase it works out in your favor.

Hey Arpit! Interesting scenario to consider. A few thoughts I have: Losing $4k a month feels pretty high, especially if you wouldn't be moving back for a couple more years. That could be almost $100k that you could have saved for your next investment. Of course, you'd be building equity in a property during that time, so it's just a matter of how important liquidity is to you right now. Can you afford the $4k a month? Would you be able to afford potential vacancies at the California property? Considering that you're currently out of state you would also need to consider finding a good management company who would be able to find strong tenants and keep it occupied.

I understand the FOMO. Prices are down here in the Bay, but it's hard to tell how long that will last. At the same time, it seems like Option 2 would allow you to build up more capital over the next couple years while also building equity in the Knoxville properties. I would lean towards Option 2 personally.

The biggest issue is that most lenders aren't interested in pre-fab as it's really hard to resell those loans. You might be able to find a portfolio lender. I reached out to some of my contacts and couldn't find someone interested, but you may have luck there. An unsecured personal loan would allow you unrestricted use of funds, but I don't think that would make sense at the dollar amount you're looking for - I think you'd have to scale a lot more slowly.

If you own another property, another option could be leveraging that, although depending on your current interest rate a cash out refi might not be ideal at the moment.

Typically for new construction lenders will look for previous experience with a similar type of build. They want to make sure you'll be able to be successful with the project and pay back the loan.

Where's the lot and what kind of LTV are you looking for?

Hey Nash! If you don't want to refi, then I would recommend looking into an unsecured personal loan. There are some with unrestricted use of funds and you'd be able to get the $200k depending on your FICO and income. You might also check out the Casita Coalition--they're a support network for people looking to build ADUs in California.

California real estate is very challenging. I recently learned about Dream For All, a program that will provide downpayment assistance, but it has to be paid back with interest when the home is sold. Why does your friend want to own his primary residence? Would he be open to an out of state investment property?

Hey Michael. To clarify, are you saying the second property would be your primary residence and the first property would be a full time rental?