All Forum Posts by: Kevin Kim

@James You

Thanks for the input. What type of loan product did your client obtain for the SFR +ADU? Do you have inexpensive but reliable contractors you can introduce me to in LA?

@LaQuadra Neal

Out of state is definitely a great option for cash flow investments.  I'm looking into the out of state route but want to start my first purchase locally so I can get my hands dirty and see what it really takes own, manage, and add value to a property.

@Mario Medina

I'm currently trying to buy my first home as well. I'm not sure how the Tucson market is but I wasn't able to find any properties qualifying for the FHA loan program for a 4-unit property in Los Angeles because of the Self Sufficiency qualification.

Now I'm looking at buying a single family home and buiding an ADU on it since there are many low downpayment, low interest loan products out there for this strategy.

@Paul Dashevsky

I was thinking the same thing for my first purchase. Buy a SFR and build an ADU after close of escrow. Do you know if the FNMA Homestyle loan requires you to use licensed contractors? I wanted to do most of the work myself so I could save a few bucks.

Is $250 - $400/SF the going rate for ADUs in Los Angeles?  I assumed materials, permits, labor and drawings would be around $100/SF using basic finishings

@Nick Rutkowski

That would be great in theory but I haven't been able to find any 4plex owners willing to do that.  The ones who are willing to sell want the funds out immediately so they could exchange into other properties.  Do you have any advice in how to find those type of sellers? 

What's the best strategy for my first deal?

I want to invest in an income producing residential property.  I have about $100K cash saved with a steady $9500/month W-2 paycheck, 760+ FICO and no debt. I'm willing to put 5%-10% down payment and spend an additional $4000/month over any rental income the property may produce. 

I originally wanted to do an owner-occupied, low down payment purchase of a 4 unit property in Los Angeles, ranging $1M - $1.4M and hoped to get a 30yr fixed with 3.75% or lower. I couldn't find any loan products that could make this happen.

Now I'm leaning towards buying a single family home in a decent area of Orange County and use it as my primary residence. Finance with a High Balance Conventional loan, 30 year fixed 3.0%, 10% down and a target purchase price of $850K. I'll spend the first 3 months building out an ADU with my own money. I plan to sell it after 2 years to get the main home sale exclusion tax benefit where most of my appreciation will be excluded from capital gains tax.

Can anyone point me in a better direction for my first deal?  I want to stay local for my first investment.