All Forum Posts by: Laura Shinkle

I agree with the other comments above. I love the creativity, but taking out debt to buy more debt doesn't sound like a good plan. 

I love @Ryan Thomson's suggestion to find a co-signer. See if they're willing to put up some or all of the downpayment as a gift to get you started. Depending on your family's personalities, appeal to how they would see this ask. Would numbers and showing an example of what you want to do work best, or would you be better off appealing to the heart? lol

Since you have a full ride to school, you could sock away a decent amount of money with side gigs. You may also qualify for down payment assistance programs and other grants in your state since (I'm assuming) your income isn't too high. 

I understand the thought and technicalities of your primary residence being a liability (even though I disagree with it!) If it doesn't bring you a return or bring money in, it's a liability. 

However, you have to live somewhere. Would you also not call renting a liability, even though there's no mortgage, there is a lease. Unless you live in a van down by the river, you're going to pay to live somewhere. 

Since it's a househack and you're bringing in income (even if the tenant isn't paying 100% for your expenses), I'd call it an asset. Without it, you wouldn't be bringing in that additional income, and you'd likely be paying out more per month in your budget (for rent elsewhere). 

I think folks try to make this black and white, but that's the beauty of real estate investing. Nothing is black and white, right or wrong. Just what you decide to do with it. 

Regardless of asset vs liability, it's still a great way. to build wealth ;)

Hi @Arti Ta, there are definitely new constructions that allow rentals. It will depend on what your strategy is, and how many investors they've already sold to. Most builders have a certain percentage they're willing/able to sell to investors. 

They typically don't advertise it, so either use a Realtor to do the legwork for you, or you'll be calling a ton of different neighborhoods

Hey Joel, that's exciting! I'd recommend looking for meetups in and around the Charlotte area. That's a great way to continue learning, meet wholesalers and other investors in person. Also, making sure you're specific on your buy box will help make it memorable and not get overwhelmed with 'deals' that aren't what you're looking for. Good luck!

Myrtle Beach is definitely a vacation destination. That said, I don't know enough about those areas to speak to actually numbers/ROI to speak intelligently on them. If you find a good team down there, then the maintenance and up keep are done for you. Also, they should know any laws around STRs.

One guest speaker on one of the podcasts (I can't remember which one/episode, sorry!) that you actually get less wear and tear on STR properties since most guests are staying for only a short amount of time, and an agent/PM is going into the property much more frequently, so any issues are caught early, keeping any repair costs low. There is always the chance of a party booking or someone destroying the property, just like there is always that chance with a LTR as well.

Good luck and keep researching!

 I saw that @John O'Leary mentioned the Charlotte market. I'm an agent in the area and work with investors of all kinds. For this area, getting $300-$500/door is not going to happen for a LTR, unfortunately. At least, not if you're accounting for Cap Ex, Vacancy, etc and are only wanting to put 20-25% down. My calculations for the last 6 months or so require 35-40% down to get the cash flow. The rental rates just haven't caught up with purchase prices, let alone the increased interest rates. 

A lot of investors are turning to the STR and MTR strategies here. They do require more up front work, but with the use of a property manager can be a good option.

I'd love to see if anyone posts about the other areas mentioned, if they're a better option.

 Maybe I'm reading this wrong, but it sounds like you haven't gotten to the house hack yet? Once you've purchased the househack, that will explode your savings rate (or should anyway). Your living costs should go down, allowing you to save faster. Some other things to think about: 

-Make sure you're looking at all options for the househack to make sure you buy the right property. Don't just buy a multifamily just to buy one. Make sure it's the right deal/option for you. 

-If you buy a multifamily property, can you also househack the rooms within your unit that you live in? That would increase your cash flow.

-If the property needs work, consider a renovation loan. That would allow you to roll the costs of renovation into the loan, so you're putting 3 or 5% down on the total amount, not just the original purchase

Good luck! Let us know how it goes

 Every type of loan has a different stipulation on how much the seller can contribute towards your purchase/expenses. @Jeremy Stebbinsmentioned a few limits with different loan programs, I'd talk to your lender about those for your specific situation. 

Seller contributions can only legally be used for certain costs. If you run out of costs to use the concession for, then you're leaving money on the table. The seller may not agree to lower the purchase price the same amount of what is left over. (For example, if you agree up front to $10k in seller concessions but find out later you can only use $5k, then the seller isn't necessarily obligated to lower the purchase price by $5k. So then you've left money on the table). 

Also, talk to your agent about it. There's a difference between needing those concessions and 'nice to have'. It'll also (at least in NC) potentially affect the inspection negotiations so that's something to weight the pros and cons. 

Lastly, if he's doing these deals on the side outside of the buying/selling transaction, that seems super shady to me (as does charging $10k for this course). Any lenders can chime in here, but how I understand it and have always been told, is anything to do with the transaction and money changing hands needs to be on the final closing disclosure. 

Hope this helps!

Hey Justin, good thoughts here. Some questions for ya: 

1. Do YOU feel comfortable living there? Remember that as a househack, you have to live there for a year. Nothing is worth putting yourself in a house where you don't feel safe or good. 

2. What's the rental history/comps of the fourplexes on the street and neighborhood? Are they going up, down, staying on the market a long time, etc? That will give you an idea of how people are reacting to the area. 

3. Are the other fourplexes not well maintained? I don't think having similar type housing in the same area/neighborhood is a bad thing. However, if the other ones aren't being maintained well and you're the nicest one in the neighborhood, that might worry me. 

 The restriction is the mortgage documents. If you're getting a conventional loan and saying you're going to live there, the lender gives you a better interest rate and the option of lower downpayment if you live there than if you're buying as an investment. If you lie on the mortgage applications and say it's to live in and you don't, then that's mortgage fraud. Pretty hefty penalties for that. 

The beauty of house hacking, though, is your cash on cash return. Low money down as an entry point, and the cash you get every month from your tenants is much better than the cash on cash (typically) of an investment property right now with rates where they are. 

What's your goal and why do you want to buy 3 at once?