All Forum Posts by: Lee Nguyen

Hey BP!

Here's the scenario that I might be in. I bought a place for 66,500 that was appraised for 75k at the time. Let's say this property becomes appraised again after rehab at 133000k. The equity in the condo is equal/greater than the amount left in the mortgage.

Is it a good idea with BRRR strategy to use that HELOC and pay off the Mortgage completely?

I don't plan on selling this unit.

After I've leveraged out the HELOC and the unit being rented, I could easily put 2k a month into paying off the HELOC. It all could be paid off in 2-3 years. As I'm paying off the HELOC, I'm freeing up more room in my equity to go for other deals and my required payments become lower than what my original mortgage after a year.

Once the HELOC is paid off, I can leverage out the condo up to 133k and use the 133k for other deals.

It makes sense in my head and on paper, I think. This scenario is assuming I'm living in a duplex and not paying anything out of pocket to live there. There's a lot of paths I could take, but this seems the most prevalent. 

Thoughts?

@Ivan Mendoza 

I started with a condo. Fortunately, I bought mine as a short sale and HOA covers exterior maintenance, water, sewage, and garbage.

After two years of renovations, my condo spent barely one week on the rental market. There was not even enough time to even post pictures. The tenant came by to look at the unit and signed the papers that day. One of the things that made my unit so desirable were the updates and the view. 

HOA is pretty low, 220 a month but my mortgage is only 420 a month. It's rented out for 1350. 1350 is actually well above the market high value for rent in my unit.

After some experience and research around the area, I found that a lot of HOA's don't pay for as much as mine does but they still charge a heck of a lot more with a lot of restrictions. Another thing, I've learned is a good view can be worth an extra 100-200 dollars a month.

HOA is a huge factor when it comes to what you can do with your unit. They determine if you can rent or not, if you can renovate or not, what types of floors you can put in, and so much more. You almost have to run everything by them. Something I didn't know until after I was done with my renovations. Even SFR have that same problem with HOA. For some, it may seem they run your life.

Overall, my experience has been a positive one. Because my unit is only 850sqr ft, $20000 can do a lot for a small unit and the equity that I gained has been substantial. HOA has been quite lenient and they don't interfere with anything major. Just the occasional chimney inspections and things like that.

Hopefully, this gave you some insight and a more clear plan of attack. Good luck on your investment. 

Wish you the best. 

Let me know what you guys thinks of this.

Back in early 2014, I got orders to report to submarine homeported in Washington. At the time I was living in upstate NY and knew that I no longer wanted to rent. I start my process of finding a home to buy. 

Since I didn't have much money saved up at all, my only choice was to go VA loan. I spotted a condo as a short sale that was listed for about 84k. VA appraisal came back 75k. We renegotiated and somehow got them down to 66.5k. Even to this day, I have no idea how that worked in my favour.

I almost had to pay 2 years worth of missed HOA payment. I basically told them no. HOA agreed and said I didn't have to pay it. That's the short version of that conflict.

Funny thing was that I had yet to tour the place personally until a week before closing when I finally arrived after finishing my month long road trip across the country. 

That place wasn't in bad shape. It was just incredibly outdated. The early 80's came and never left was the gist of how the interior felt 

Between deployment, I spent most of my time buying my own tools and learning/doing my own handyman work. Needless to say, that there were a lot of expensive mistakes made. 

Fast forward to February of this year, I started to learn more about cool things I could do with real estate and equity. That's when I put in HELOC and see how much equity I had with only half of the condo renovated. The appraisal came back at 110k. For some reason, I only took out a 30k HELOC to help finance the rest of renovations, mainly the bathroom and both bedrooms.

Fast forward to mid- June of this year, I'm completely done and trying figure out what to do with my free time. I've in the process of getting another HELOC on the condo to take out as much as I can. Another great bonus, I'm going to be renting out my condo for about 1350. It's 220 for HOA fees, 420 for the mortgage, and roughly 135 for the property management fees. Doing the math, I'm pretty ok with how that's going.

In all, I put about 20k of renovations into the condo not including man-hours. Thoughts?

Thanks for tip @Al Williamson

I didn't put much thought into the next housing bust. Lucky my HOA and Mortgage is low on that condo. It's roughly 650 a month.

Hello BP Community!

Just wanted introduce myself. My name is Lee Nguyen. I'm currently in the Navy with a only few years left. I bought my first piece of real estate about two years ago when I was 23.

It was a condo on a short sale with a VA loan for 66.5k. Over the past two years and between deployments, I spent most of my free time renovating the place. A lot of expensive lessons were learned

This last February, I wanted to take a leap of faith to see how much equity I would have with just half of the improvements done. The appraisal came back at 110k so I took out a 30k HELOC to help finance the unfinished half of the renovations.

I just finished all of my renovations a few weeks ago. I put in for another appraisal to see how much more equity I can take out and will be renting out my condo for 1350 in August.

I'm starting to get real excited about real estate investing route for the challenge and financial security it can offer. Because of the rental market is so hot where I live, my aim is to buy as many duplexes as I can, fix them up, and rent them out for a pretty penny.

Hey BP. Here's my situation right now. I have a condo that I got for 66.5k on 30yr VA mortgage. I fixed it up a bit and got it appraised for 110k and got a 30k HELOC. I'm now done with my renovations and doing another HELOC to take whatever I have left out and will be renting it out in a few months. My progress got the interest of potential investors who are looking to get into rental properties with me.

My question is how do I work with investors when it comes to getting a mortgage under my name?  How do I effectively use OPM toward a mortgage? 

My thought is to have them as a co-signer or put the investors' capital under an LLC to supplement the down payments. I would then pay them based on some percentage of the profits the LLC as a stake in. I feel like there's plenty of directions to go but not sure which direction is the most profitable for everyone.