All Forum Posts by: Kevin G.

@Ryan Thomson 

Hey Ryan, I am after a total ROI over the long term, as well as cash flow down the line if I am able to refinance and move out into another property with my family. Once I either pay down PMI and get 20% equity into the property, it will cash flow, and then if rates come down I will be in even a better position.

@Dan H. 

Yes, I have also heard that this property may not pass the self-sufficiency test. However, most properties in the Bay Area do not pass this test. I have been told that there are some lenders who are willing to work on this issue and be more lenient. I won't know more until I talk to a lender though.

The market rate rent for the house we would be living in would be about $3000/month. So the total rent would be $7800/month.

I appreciate your other insights. My plan would be to hold onto it long term and use it as an equity play. If I can refinance down the line, then cash flow would be on my side as well if we move out.

am considering purchasing a 3-unit property in my area and house hacking it with my family. Currently, I am renting in the Bay Area, CA and paying $2750/month for rent, not including utilities. The property I am interested in is a 3-unit property with 2 separate units in the main house and an ADU in the back of the property. The property is currently for sale for $1,050,000, and I plan to put as little down as possible, so I am considering an FHA loan with a 3.5% down payment.

Based on my calculations, the back unit should rent for $2600/month (2 bedrooms, 1 bathroom) and the ADU should rent for $2200/month (1 bedroom, 1 bathroom). The ADU can command a higher rent since it has its own garage and is very large.

Assuming my calculations are correct, my effective mortgage payment should be $7838/month. This includes principal and interest of $6091/month, home insurance of $233/month, PMI of $490/month, and property taxes of $1024/month. However, with the rental income factored in, my effective mortgage would be approximately $3000/month.

My current income is around $145k/year, and I've been told that FHA loans will use rental income towards your income to help you qualify. The property has been on and off the market, so I am thinking of offering less for the property. If the seller agrees, I can effectively get my mortgage payment to be the same as or less than my current rent and save money.

I would appreciate any thoughts and ideas from the experts on this forum. Is this a bad idea given that I'm not saving a significant amount of money with the house hacking situation?

Is the home just too expensive and interest rates too high for this to work? Also I would HAVE to break my current lease to move into this property if I was to purchase it. 

Thank you!

Hello Nestor! Your income is great and will be very helpful in achieving your real estate goals. As a new investor in the STR space, I wanted to introduce myself as well. Tampa is a great spot to invest and is one of the hottest real estate markets right now. It is particularly strong for both long-term and short-term rentals. I found many deals in Tampa for STRs, but the biggest challenge was competing with house flippers. They seem to be taking advantage of every property that needs value added and are on fire right now in Tampa. I am also looking for a home where I can add some value before making it an STR. This may be a good option for you too.

I recently stayed in two Airbnbs in Japan. Both did not charge a cleaning fee AND there was not a long list of chores to do before I checked out. Only thing that was required was to bag up the trash. Much different than the U.S that's for sure...

Good for you! This type of new behavior from STR hosts for guests to complete a laundry list of things to do before check out is ridiculous. This is suppose to be a vacation home after all and asking guests to clean like that is crazy...

Please correct me if I'm wrong, but wouldn't a single-family home be a better option near Disney World, especially one with a pool, if it's affordable? That's what I'm currently looking for as I search for deals. I hope to find a single-family home with at least 4 bedrooms, use the BRRR method to turn it into a short-term rental property. Rinse and repeat. However, I'm having difficulty narrowing down a few markets, such as Tampa or Kissimmee/Orlando.

Hi there!

I think a medium-term rental might be a great option for you. The area is home to several hospitals, which makes it a convenient location for traveling nurses. In fact, I know of a few traveling nurses at JMWC who are renting out apartments right now. There are four hospitals in the area, two of which are located in Walnut Creek, so it's definitely worth considering.

As for short-term rentals (STRs), I'm not entirely sure how strong the market is in Walnut Creek, since it's not a hugely popular tourist destination. However, I've heard from my real estate colleagues that STRs in the area have done well. Unfortunately, I don't have any concrete numbers to back this up. Whatever you decide, best of luck to you!

Hello Everyone,

I am unsure about the best course of action for my current financial situation. Most of my real estate money is tied up in my brokerage accounts, and I am wondering if it would be safer and smarter to sell off most of them and hold the cash in a high-yield savings account (HYSA) if I plan to invest it by Q3 or Q4. With the recent performance of the stock market and the news of SVB, I am feeling nervous about my money. It is possible that it may be too late, and the market could take a strong dive on Monday. What would you do in this situation?

Currently, most of my money is invested in mutual funds like VTSAX, which have historically performed well. I could continue investing my money into these and sell when I am 100% ready to buy, or I could hold all the cash in a HYSA for now.

Thank you!