All Forum Posts by: Kyle Bambu

Hey everyone. I have a few rental properties in AZ and PA. My strategy in Arizona has been adding bedrooms and renting by the room - currently getting 850-950/room in nice neighborhoods. The rental market here seems to be cooling and it's hard to pencil deals even if I rent by the room to achieve higher than average rents. My sister recently moved to HI, and I figured that might be an interesting market because of high rents and HCOL - although also high property values. Are there any realtors in HI that can speak to how robust the Honolulu market is? Is there strong demand for rentals and is it potentially possible to rent a room for 1500-2000 depending on the location (slightly cheaper than a studio from what I've been seeing which is how I priced my rooms in AZ)? Any advise or guidance is appreciated. Thank you!

Hi Mario. My experience with her has been absolutely TERRIBLE. And I recommend that no one use her. She ignored numerous emails last year and failed to respond timely to questions that I had that would have saved me tens of thousands. I only found this out after speaking to another tax preparer. Eventually, I had a phone call with her where I voiced my frustrations and she said that she’d fix the issues. I trusted her because I wanted the best for both of us in the situation. However, nothing changed. And then 3 days before the tax deadline I received an email saying she couldn’t file my taxes on time. That annoyed me so much that not only would I miss out on tax benefits, but now I had to figure out how to do my taxes myself. She still has not issued a refund to me, and I may consider legal action against her for not following a single line of our contract. Do not recommend her to anyone

Hey Tatiana! Welcome to Phoenix. When I first started looking for a potential house hack, I was also looking for a duplex, triplex, or 4-plex, but the prices for those deals seemed ridiculous. I'm SURE there are deals to be found, but I did not want to buy in a C-class area since I was also going to be living in the rental. What I decided to do is find a SFH with some kind of value add potential. So I started looking for houses with a detached garage, workshop space, basement, ADU, etc - something that I could turn into an extra room or at least turn into additional equity. I put offers in on at least 5-7 properties and depending on the deal waived contingencies or offered more than asking. I didn't want to get a bad deal - I still wanted to make sure I got a little equity on purchase while also getting that additional value add bonus. I ended up purchasing a property where I got ~10k equity right away (not a lot but something!) plus the opportunity to add 2 extra rooms. My house is officially 4 bedrooms but I was able to block off an office space/addition to create 2 large rooms - so now I rent out to 5 people and live in the house! It ended up being a great deal for me. I would suggest you increase your options and look for a similar SFH deal rather than just multifamily units. If you have any questions feel free to connect and we can talk more!

Hi everyone! I'm starting a job at a company that will match my contributions made to a 401k or Roth 401k. I'm trying to figure out the best avenue so that I can use the money in either account to fund real estate investments. Obviously, I want to take advantage of the company match because that is essentially free money. 

My question is, which plan is going to be more beneficial to fund? The 401k money goes in pre-tax whereas the Roth is going in after-tax. However, I get lost when it comes to the rules of each account and early withdrawals. From my understanding, I should be able to get a loan from my 401k account up to 50% or 100k, whichever is greater. Does the Roth allow me to do this as well? Are there any other ways that I might be able to use my 401k or Roth 401k as collateral in order to get a loan? I also know the benefits of having a self-directed IRA so that I can invest my funds how I please, but is it even possible for me to rollover my 401k or Roth into a SDIRA? Any bit of advice would help. Thank you!

Ah I see. Yeah you're right, 3% down can only be used for 1 unit. Hopefully someone else can verify this, but you'll need to wait 6 months to refi out of an FHA. You should also consider the cost/benefit of doing that. If you're paying higher rates for 6 months and having to pay closing costs again, it honestly might be better to go with 5% down conventional owner occupied and pull out the HELOC so you can tap the equity. Also, if you refi out of the FHA and intend to not live there anymore, the bank will treat it as an investment property now and will want to see an LTV of >20%.

I'm not a tax expert either, but you want to claim the depreciation! Depreciation helps offset your income so that you pay less in taxes. For example, if you made 12k in income from your rental and your property depreciated by 12k or more in that year, then you don't pay income taxes for that rental income! Did your house really depreciate by 12k? Probably not. In fact, it probably appreciated so it's worth more. Depreciating assets can make it seem like you lost money in a period when in reality it is only a paper loss. If you ever sell the property, you will be subject to depreciation recapture whether or not you reported to the IRS depreciation on the property. So if you don't claim depreciation now, and you sell later, then you are losing out on both ends. 

So I take it that you want to take advantage of only putting 3.5% down and then refinance as soon as possible to pull out the 20% extra equity that the property appraised for? First off, you are probably better off getting a 3% down conventional loan if you are trying to do that because the rates will be lower. I do not believe the lender will allow you to refinance so quickly after purchasing -- you would probably have to wait 6 months and then get a second appraisal. However, you could probably go get a HELOC right away. If your lender offers them, then it shouldn't be a problem to use the same appraisal if you apply right away. You can also pull out more equity with a HELOC (sometimes up to 100% LTV) without paying for thousands in additional closing costs.

@Sean Sullivan As others have mentioned, you'll need to figure out the rehab estimate. You could certainly get some contractors in to get you quotes. Homeadvisor.com is great for plugging in certain items and estimating costs for you. Take notice of the big ticket items like kitchen, bathrooms, roof, etc. Some unforeseen issues could include plumbing and electrical if the house is really old and hasn't been updated at all. I'd also recommend taking a look at the electrical panel, water heater, and AC unit to see the age. You don't need to have the rehab cost down to the exact penny but calculate a rough estimate and throw on 5-10% in contingency to cover anything else you might have missed. 

Next step is to go on redfin. I used to try using zillow for ARVs but redfin is honestly far superior. Type in the city of the property you are trying to calculate an ARV for. Then, move around on the map until you locate the neighborhood of the property. Use the draw tool at the bottom of the map to outline the major roadways surrounding the general vicinity of the property. Adjust the filter settings to include only Sold properties within the past year and then throw a couple more filters in. Ex: if the property is 4 bed, 2500 sqft you could put a filter to show only properties up to 2750sqft and min/max 4 beds. Loosen the specifics of your filters accordingly if there are no comparables in your search area. You can also increase the search area but be very careful with this. Prices can change pretty quick depending on the neighborhood which is why I try to stay within the bounds of the nearby main roads. Ex: Your property is East of Main St in a C class area, but West of Main St is an A class area. A similar sized property is likely not the same value in both areas...an extreme example but important to look out for.

Feel free to reach out if you have any more questions or if I can help at all!

I haven't read any books on wholesaling, but I have listened to plenty of wholesaling podcasts. You can choose whoever you want to listen to in the podcast app, but I feel that most of the podcasts that I have listened to on wholesaling are glorified success stories. Most of the time, the guests seem to leave out the nitty gritty details. 

I just started a wholesaling business at the beginning of this year and it is pretty straightforward. Get lists of leads, skip trace them, call the numbers, keep redialing the leads that were even remotely interested in selling until they actually do or tell you no. It's definitely a numbers game and all about generating lists of potential leads. 

Edit: Just to clarify. Wholesaling is not easy and not a "no money down" way of buying real estate. You certainly have to put money in to get lists, skip trace, and call. You can minimize expenses by doing a lot yourself but remember that even your time has a price. I'm sure you don't want to work 100 hours to make $100. 

@Reed Meyer There are very few books that I have read that I thought had a huge impact on me. I highly recommend that you read these two books:

- Can't Hurt Me by David Goggins

- Never Split the Difference by Chris Voss

While neither are directly about real estate, they teach skills that you will need to have in order to have a successful real estate business. Discipline and negotiation are huge! If you can be disciplined in your actions and be able to negotiate, you can probably succeed in anything. If you are looking for a good starter real estate book with a pretty broad overview, then go buy a copy of The Millionaire Real Estate Investor by Gary Keller.