All Forum Posts by: Lindsey Iskierka

Hey Sergey!

Congratulations on being close to closing on your first home! Your lender is right; with an FHA loan you do need to live there for at least a year. Good news is that it's only for one year! Is it a situation where staying there for one year, maybe renting out rooms you aren't using to help pay down the mortgage and save for another home isn't a possibility?

Where are you buying?  

We did a 1031 exchange with our rental in Long Beach and bought 2 homes in Kansas City, MO and 1 in Birmingham, AL. All of the homes perform even during the pandemic and are giving us an 18% ROI. We're glad we utilized the equity to grow our portfolio out of state.

If you aren't house hacking, have equity, and are looking to cash flow I would move your capital to a different state.  We have high appreciation here but it's hard to cash flow and the equity is useless if you don't tap in to it.  

Let me know if you want to hop on a call to chat more!

Lindsey Iskierka

Real Estate Agent; The David Greene Team

DRE#01989065

(714) 393-1644

Foe investors who like to purchase land, is every lender requiring it to be financed on a 15 year mortgage instead of a 30 year?

We’re looking at 5 acres in Flathead County, Montana and are having trouble getting financing for anything but a 15 year.

We’re discussing seller financing as well with the seller but at this point, we’re not agreeing on terms.

Thank you in advance!

Hey BP!

My husband and I will need to do a 1031 Exchange when we sell our triplex in Long Beach, CA that is currently listed on the market.

Can anyone recommend someone to help us facilitate this?  We might be going in to escrow this coming week so we would need someone to help us right away.  

Thank you so much! 

Lindsey Iskierka 

My husband and I are selling our triplex here in Long Beach, CA. We purchased it in September 2016 and have a significant amount of equity that we will use to purchase properties with cash out of state.

We lived in the triplex from September 2016-March 2019 and have not sold a property before. My question is do we need to do a 1031 exchange? I believe there is a one time exemption and will not have to pay taxes on this sale. My husband believes we will be taxed on the other two units that we rented out, but exempt on our portion of the property.

We are currently in escrow so if we need to do a 1031 exchange we need to know ASAP. We can’t seem to find a direct answer. Thank you in advance!

Lindsey

@Chayson Descisciolo We’ve definitely considered hard money for the remainder of the renovation to be able to offer more to the seller upfront. My concern is if the 203k consultant/contractor who will be assigned to our project would allow just half of the renovation done. Just $100k might not make the units livable. I know they’re pretty strict so I’m just wanting to make sure that the loan goes through and we don’t cause hiccups by using hard money or private money for a portion of the rehab.

Thank you for the reply! I will talk to our mortgage lender but I've been upfront with him on what our plan is for this home and he didn't mention anything about fraud.  I'll continue to look in to how to do this in a way that is legal and works for all parties.  I just figured the BP community could have some insight. 

Hey BP and Happy Friday!

My husband and I are in the process of buying our second small multi-family here in Long Beach, CA.  We have our eyes on a duplex in Long Beach that will have room for our growing family plus great rental income.  

We would use a 203k loan due to amount of renovation needed on both units.  We're approved for $875k (without selling our current triplex for more capital) with this kind of loan.  The property is listed for $849,000 and it's been sitting on the market with investors backing out of it and no one else offering anything. 

What we offered is $875,000 using a 203k loan. The units require $200k of renovations so the sellers would pocket $675,000. To help them net more money (and frankly take our offer), we also offered an additional $100,000 from a private lender to be wired in when we close plus give them my buyer's agent commission since I'm a full time Realtor. In total, the sellers would net about $790,000 before commission and escrow fees. What we would do is renovate both units and refinance out of a 203k loan and pull out $100,000 in equity to pay back the private money lender plus 10% interest after 6-12 months. A BRRR method, if you will.

The sellers don't want to take our offer because they suspect taking additional funds along with an FHA type loan is "fraud"? I'm not sure how to answer them on that and what points to make to put their minds at ease. We really want this house...we have baby #2 coming in summer time and our triplex just doesn't have enough room so we need another home.

Any guidance in my answer to them is greatly appreciated! Thank you so much.

Blessings, 

@Steven Smith I’m in Long Beach, CA where multi family homes are expensive and finding an investment that cash flows right away is like trying to find a unicorn. I’m a realtor in the area as well so I’m really familiar with the local market. If you think of “house-hacking”, it’s where you live in the property and utilize roommates or other units on the same property to help pay your mortgage. You either live for free or for cheap! If you are living in the property and are only $200-$300 negative cash flow, I suppose that’s what you’re ultimately paying each month for your mortgage after rents. Over time, rents could appreciate and meanwhile you’re building equity, paying down your loan and living for very very cheap! Just as a personal example, my husband and I bought a triplex in Long Beach in October 2016 for $750,000. Rents were below market and units needed to be updated. Over the last two years we’ve renovated all 3 units and raised rents while the market was still appreciating. When we first moved in, we were paying about $1800/month after rents (VERY cheap for our area!). Now we pay about $1400/month and if we were to move out and rent all 3 units we would be positive cash flow about $700/month. So right away, it wasn’t a terrific deal but after renovations and increasing rents, it’s now a good deal and will continue to be a well-performing property for us. So if you are house-hacking have the expectation that you may not be cash flowing or living for free yet, but you may over time if you force the value of your property up through renovations and value-adds. I hope that helps!

Hi @Brynn H.!

My husband and I had almost the exact similar journey in to real estate that you did; beginning to "Rich Dad Poor Dad" and eventually ending up at BP! We use my husband's VA loan to purchase a triplex in Long Beach, CA to "house hack" and that's been a fantastic first venture into our first investment property. We are now looking for our next fourplex in the same area to house hack. Then most likely eventually invest out of state.

Thank you for your service and welcome to BP! 

Blessings,