All Forum Posts by: Kyryl Sokolov

Hi, Kurt, thanks for the advice. I see that you are an architect tourself. Do you have any recommendations how to distinguish great architect from not that great for my project?  

Hello, Bigger Pockets! First timer here. I have bought single family owner occupied unit in seattle NR3 zoning(residential single family up to 2 ADUs allowed). 

I have 2 story house with the basement. 3/1 with opportunity to add second bathroom on the second floor.  

I am exploring the idea of removing the stairs in the main house to the 2 floor and stairs to the basement to convert the 2nd story to a separate unit(add stairs outside) and convert the basement(cut egress door). 

It seems like a very sophisticated project, but doable. I have around 150-200k.

Should I convert 2nd story unit to ADU or convert the house to the multifamily? What is the difference? What are pros and cons?

With the basement its a bit trickier. Height of the ceiling without floor is 6’ 10. It has some cracks on the floor and slight slope. To make it legal adu I need at least 7 feet of ceilings. House built in 1925, are there any grandpa low to make it legal with the current height without digging-out basement? Should I take a rout of a non-confirmed unit? What are the legal problem I can face by renting non-confirmed unit? Is it worth to dig-out 0.5 - 1 feet of the basement to make it confirmed? 

Where should I start? Architect(seems very expensive) or architectural designer will be enough? Or any other expertise could be consulted to start this project ?

I am new to the real estate business and this country, thats why I really appreciate any guidence here.

Thank you in advance folks!

>How many properties have you looked at? How many offers have you made?

I looked at 6 properties in Seattle, and 10ish in Bay Area. Made 0 offers. 

 Nicholas, thank you for explanation about clearing my expectations for A and B neighborhoods! I will consider to put bigger downpayment then, to have positive cash flow.

>Why have you ruled out house hacking?

I live in Seattle, not because I like it, but because my company make green card for me and I must stay here till the end of the process. Our next panned destination is Bay Area. If we buy house now for house-hacking, and move in the next year or two, we still need to manage it out-of-state, right?

On top of that, houses here are too expensive(1-1.2 mil), we need to put all money we have to avoid PMI, to buy duplex or SFH with ADU. So I trade risk related to out-of-state investment, with risk to hold huge leverage in over-bloated market in tenet friendly state, but I am losing opportunity to build a skill-set of out-of-state investing which will help me to scale faster and be flexible in the future.

If we buy cheaper house but further from the city, we will spend a lot more time in the commute(3 days in the office mandate), in this case we will trade time(commute) for money(affordability) it makes it not an investment, but another work. Current commute - 10 mins walk to the office. 

But one undeniable benefit of house-hacking is to ability to reduce w2 taxes for primary residence with interest rate payments. So my thought process was, to start small with cheap OOS, gain experience and than after my green card ready, move to bay area and buy 2-3-4plex to house-hack there. Plus time line will be in 2 years, so it will allow me to qualify my experience as investor to use potential profit from 2-3-4plex for mortgage. And thats where I defray housing cost. 

Am I missing something? Thank you for your help!

>https://www.biggerpockets.com/forums/48/topics/1159104-overl...

Thank you for valuable piece of information.

Hey, BiggerPockets. First timer here, I live in Seattle, WA houses here are too expensive to make a mistakes for first timer, so I am considering start small from more affordable areas, like Detroit Metro Area or Cleveland, or maybe other locations more seasoned investors can recommend. 

My wife and me work in tech, we were considering house-hacking with 2-3-4-plexes, but risk is too high here and reward is too low, Seattle is not landlord friendly and we like to have flexibility. I read couple of books about REI, and I understand that during first years of investing I may do more mistakes and I want to make them frugal.

We recently came to the US, and have around 150k of cash on HYSA and some stocks, that I believe smarter to not sell to have different type of assets for diversification. 

I do not want spend my W2 income to cover house mortgages, to not have pressure if things like layoffs will happen, so my plan is to buy house in a good neighborhood that may have appreciation and some minimal cash flow after all expenses (management, maintenance and vacation). I know that I can put bigger downpayment and make it work, but ideally put 20% down. 

In Detroit Area, I consider East English Village, Bagley, Detroit University, to buy first house turn key around 150-200k, than after I gain some experience(~6 month) with just renting, go to the next level of complexity and do BRRRR there with people who I can trust after first deal.

I understand that team with their boots on the location is crucial, so I am planning to fly there for couple of days/week and team up offline first and then do business remotely.  

I was also looking on the Ohio market, as Cleveland or Columbus. But I like idea that Detroit, gaining it's momentum of renaissance and appreciation could be better there, but maybe I idolize it.

Columbus seems lucrative with tech companies investing there, but a bit fishy, because so many flippers already there, so many people realtors/flippers tryin to sell their flipped houses. Not sure I understand why they just don't want to rent them and gain appreciation, if it that good. Houses there twice expensive that in Detroit and I can afford them, but the risk to buy poorly fixed flipper is seems too high(I've seen couple of bad flipped houses for sale, that had some issues with permits after fixes).

Cleveland seems similar to Detroit. Due to high crime property should be picked block by block, and not by zip code. But because Detroit has bad reputation in the media, I believe many investors would avoid it and I may have lesser competition, in comparison with Cleveland. 

So my questions are:

1. Am I delusional to have turnkey investment with 20% down, managed by the manager, with minimal cash flow(100-200$) in A- B+ neighborhoods that have a chance of appreciation? 

2. Why are so many flippers in Columbus? Why they trying sell so hard and not rent out their properties? 

3. What's better for first timer Cleveland, Detroit or something else?

4. Any specific red flags to identify bad actors and avoid doing business with them in these areas? I do not like when people sell me too much, but I understand that it could be cultural difference. 

I will appreciate your pieces of advice!