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All Forum Posts by: Kenton LeVay

Kenton LeVay has started 3 posts and replied 111 times.

Post: FHA vs Conventional loans

Kenton LeVayPosted
  • Investor
  • Austin, TX
  • Posts 118
  • Votes 114

The main difference between an FHA and Conventional loans is that with an FHA, you can put down as little as 3.5% to get a loan (as opposed to 20% with a Conventional loan). The monthly cost of an FHA loan will be higher because the loan amount is higher (96.5% LTV instead of 80% LTV) and in most instances you will be paying mortgage insurance with an FHA loan.

My opinion: if the numbers work and you have a good ROI with an FHA loan, do it. Interest rates are still historically low and are likely to increase in coming years. With interest rates as low as they are now, you should leverage more of this 'cheap money' as long as the monthly ROI still works!

Post: Did you make any rookie mistakes? (Plus, NEW BOOK!)

Kenton LeVayPosted
  • Investor
  • Austin, TX
  • Posts 118
  • Votes 114

I would definitely go back and do some more thorough research on construction and hiring a contractor. I moved in and had a grand plan of fixing the place up including finishing the basement. I was very enthusiastic and bit off WAY MORE than I could chew. Dealing with the unending hurdles of renovating a 50 year old house and not knowing what to look for when hiring a contractor (which forced me to needing to fire the first one and replace him)....the first home has been full of setbacks. I'd go back and tell myself to slow down, start small, and don't be afraid to ask for (and pay for) help.

Post: Sell or Refinance?!?

Kenton LeVayPosted
  • Investor
  • Austin, TX
  • Posts 118
  • Votes 114

@Caroline Gerardo, I don't have a new job lined up at the moment. My current job is fully remote through the summer so this would be me simply asking my boss to move (to which I HIGHLY doubt there would be pushback). Also, I wouldn't say the house is walking distance to NCSU but there is a house in the neighborhood that is rented out to students. It's about a 5-10 minute drive to campus.

Post: Sell or Refinance?!?

Kenton LeVayPosted
  • Investor
  • Austin, TX
  • Posts 118
  • Votes 114

Hey BP Community!

I am faced with a pretty big decision and would love to hear what you all think. I am trying to relocate to Austin TX within the next few months and deciding on whether to sell my home or refinance & rent it. Here are the facts:

Location: Raleigh, NC

Estimated Current Value: $300,000

Outstanding Principle: $154,000

Monthly Rent: $1,600/mo (I could probably get more, but this is a conservative estimate)

New PITI: $1,230/mo

Estimated Capital Gains on Sale: $300 - $154 - $18 (6% agent fee) = $128k

Estimated Cash Back on Refinance: $240 (80% LTV) - $154 - $6 (refinance fees) = $80k

Some things to note: This has been my primary residence for the past 2.5 years, so no Capital Gains tax on sale. The PITI number above doesn't include other expenses (vacancy, capex, etc.). Assuming I self-manage and pass all utilities to the tenant, it's safe to say that my monthly cash flow would be $0/mo the first year. Obviously, more cash back now through a sale sounds nice but Raleigh is an appreciating market and I can't deny the long-term wealth building impact of holding on for the long haul.

Post: Raleigh/Durham RE Market

Kenton LeVayPosted
  • Investor
  • Austin, TX
  • Posts 118
  • Votes 114

Hey Garrett,

Born and raised in Cincinnati and currently living in Raleigh. Feel free to connect with me. I'm happy to chat about this stuff with you sometime.

-Kenton

Post: SFH House hacking Tips

Kenton LeVayPosted
  • Investor
  • Austin, TX
  • Posts 118
  • Votes 114

Hey John,

I'm currently house hacking in Raleigh. I've been in this house for just over two years and have had 3 roommates. I knew two from college and one was random. I've had a great tenet/roommate experience but am happy to connect and talk details if you'd like.

Congrats Audrey.

My advice would be to simply reach out to a few lenders in the area and explain your situation. On the bright side, it's not all that uncommon! Ideally lenders want to see you in a job for 2 years to ensure your credit worthiness but if you can produce a (or a few) pay stubs proving your income and have sufficient reserves, you should be fine. I would also mention that you plan on renting out the other rooms. Who knows, maybe they'll be able to be more lenient because they know you'll have income coming from the property. Good luck!

Post: How Would You START Your Real Estate Investing Career?

Kenton LeVayPosted
  • Investor
  • Austin, TX
  • Posts 118
  • Votes 114
Originally posted by @Muh Naufal:

@Kenton LeVay hi, i would like to know.. is location still relevant to this era ? Or maybe we have more criteria for best place to invest in property. Thank you

 The location that you invest into certainly is still relevant. Each market is different and it's important to know the intricacies. However, it's not necessary that you need to LIVE in the area that you are investing. Check out David Greene's book on Long-Distance Real Estate Investing for more info. 

Post: Austin ranked No. 6 in US for major capital projects

Kenton LeVayPosted
  • Investor
  • Austin, TX
  • Posts 118
  • Votes 114

What's crazy to me is how it's not only Austin, but also DFW, Houston AND San Antonio that are all red hot. Big businesses and startups alike are moving technology jobs in droves. Is it the SF Bay Area of the 80's and 90's?

Post: How Would You START Your Real Estate Investing Career?

Kenton LeVayPosted
  • Investor
  • Austin, TX
  • Posts 118
  • Votes 114

Hey Kelly, what are your investing goals? Flips and wholesale certainly aren't "passive" but they can help grow capital quickly. If you're from San Diego, I'd assume it is probably hard to find a cash flowing rental property unless it requires serious rehab. I'd say for your situation, you'll probably be investing out of state anyway so find an appreciating market where flipping makes sense, use your whatever you're comfortable with to flip houses and then take the capital gains from the flips to buy rental property (ideally through a 1031 exchange). When repeated, this will generate a ton of wealth.