All Forum Posts by: Kyle Hern

Hello @Craig Dieterich,

In all fairness, I'm very new, too. I only have 1 duplex that I house hack. I've only had it for a little over a year. However, your deal sounds great. I think what you're missing is that it takes more quantity and time for real estate to become great.

Since you're more focused on cash flow, then you have to realize that that kind of strategy is just buying in bulk and selling individually. You buy time in bulk and you buy units in bulk. You buy a 30 year loan (bulk) then rent monthly (individual months). You buy multiple units at once, whether it's a duplex or apartment building (bulk), then you rent out each unit (individually).

The fact is that you're just starting and haven't been able to buy much bulk, yet. With time and more units, you'll find better cash flow. I think this deal you've found has opened more opportunities for the future.

I'd also like to put in one final note about leverage. I understand that you couldn't find a loan small enough for this deal. However, the fact that you did look for one makes it seem like you expected one. Once you weren't able to get it, then the deal became less than expected. It's still a good deal, but it might just make you feel a little less successful, when in fact you were.

Anyway, I hope that helps. Good luck!

@Scott Benton

For some reason, I've had difficulty grasping the benefits of HELOCs and LOCs. Since I've struggled, I could be wrong here, but I think one of them has a very short term. That would be terrible for me since I want buy, then rent it out and wouldn't get the money back in time. And I think the other (or both) just has such a high interest rate that it just wouldn't be worth it.

If I had any money left over after buying another property, perhaps I could use it to counter the HELOC or LOC by recasting. However, I'm not sure if the entire plan would result in something better.

Anyway, I appreciate the input.

@Alexandre Marques dos Santos

It's truly about what you're after. I've thought about paying cash in the future because my goal is to be a PASSIVE investor at some point, and paying cash certainly provides that. I think once I make it to the point in my investing career where I don't have to work, then I'll value passivity over income increases. I'm not materialistic, so I wouldn't want much more after that point. I love puzzles, though, so I'll still increase my income through analyzing possibilities, such as recasting, refinancing, etc.

@Scott Benton

Great post! I'm certainly looking into this more.

I see a few people challenging this idea, saying that it's not a great substitute or competitor for refinancing. However, if you're paying the principal down, then doesn't it allow you to get more from a cash out refinance or even do it sooner? If it does, then doing this during times of high interest rates would seem like a great strategy to set yourself up for getting a cash out refinance once interest rates drop, assuming you don't care about the length of the term.

This could prove useful in my particular situation because I decided to get an FHA loan with a 5% down payment to house hack a duplex. Most banks want to only give you a loan for 80% of the property's value. I'm not there yet, but it seems like this strategy could get me there sooner.

What do you think?

Thanks again,

Kyle Hern

Hello BP,

I'm looking to start my first residential rental business in Oklahoma City and I'm in the process of finding different team members. This post is about a real estate attorney.

I'm looking for a national firm that has attorneys working in different areas. I want a firm like this because I wish to invest in OKC, but I live near Corvallis, Oregon. I believe a national firm could make for a smoother transition if my property in Oregon is involved in any transaction with my OKC business. Also, I hope to someday invest in other areas across the U.S., so already having a firm to help would be ideal.

If anyone has any recommendations, warnings, or any other information, that would be much appreciated.

Thank you,

Kyle

@Alyssa Dyer

Wow! Thanks. That will certainly help.

Thanks @Rhett Tullis for letting me know. I remember seeing a March discussion about a week ago that you started. You warned the low gas prices might be a sign of financial struggle for the near future. Do you still think this? I know I'm interested in OKC because of the cash flow and lower prices compared to other places, and I'm sure I'm not the only one. However, wouldn't the possible struggle cause people to want to wait to buy? Or is it not much of a deterrent compared to the all the possible positive outcomes? As a new investor, am I specifically in danger?

Thank you @Ben Scott for your input. As an agent there in OKC, do you think what I'm looking for is something that would be very difficult to find? Know that I'm a patient buyer. I was happy to take 9 months of looking to buy my current duplex because, once I found it, it was a good fit.

Hello @Bobby Chapman,

Like you, I'm just starting out so I'm not much further ahead than you are. Right now, my only property is a duplex that I'm house hacking here in Oregon. However, I'd love to share some good books that got me started.

"Rich Dad, Poor Dad" by Robert Kiyosaki is a must read! I read this book before I knew I wanted to get into real estate (this isn't specifically a real estate book, but is more of a personal finance book). I love this book so much that I'm about to read my 7th book he authored. I've also read 3 books written by his advisors.

"The Book on Rental Property Investing" by Brandon Turner is also a great read. After reading it, it's a great book to go back to as well.

"Investing in Real Estate" by Gary W. Eldred is another fantastic reference book. There's a TON of information.

"The Millionaire Next Door" by Thomas J. Stanley and William D. Danko is more of a personal finance book than a real estate book. However, he talks about how certain habits and mindsets can help you become successful. Plus, many of the things he talks about, although aren't real estate related, can be applied to real estate.

Anyway, I hope you find them useful and enjoy them as much as I have!

Hello @Andrew Jurinka,

It's good to see someone reaching out. I have one duplex in Lebanon, OR right now that I'm house hacking. We're not too far away from each other, but it would be great to chat about how Salem and Lebanon differ and how each present their own opportunities.

I know that Lebanon has planned an eight year plan to develop more commercial buildings, residential buildings, and infrastructure. It will be on the north side of the city.

Anyway, I'm not sure if you're interested in the Lebanon area, but I thought I'd bring it up in case you were.