All Forum Posts by: Laura Shinkle

 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?

 Hi Maurice, you can find an agent in the 'find an agent' section at the top. Another great way is to search through the forums and notice who is an agent that's making good comments on the forums for BRRRs and Flips. 

Good luck with your investing journey here in the CLT area!

 That is A strategy, yes. However, there's been a lot of appreciation in the last 3 years. I'd equate that to finding a needle in a haystack. You have a lot of obstacles to overcome, including making sure you have plenty of cash, you can qualify through that specific lender for the loan, the seller is WILLING to take that deal instead of another offer, and even finding this specific situation in the first place. 

Lastly, make sure you talk to your lender about that possibility and get a clear checklist on what you need to do in order to do it. 

Good luck!

@Lionel Quiambao great question. And you're exactly right. Have a standard credit score minimum, no evictions in the last X years, things like that. It'll protect you down the road if anyone wants to make a fuss that you discriminated against them or something. If you have set standards and a legit reason why you denied them, they won't have a leg to stand on. Make sure you read the Fair Housing Laws to know what you can and cannot deny (and that can be different if you live in the house vs not living in the house).

 Great question Austin! So he was specifically asking about assumable loans. "I'd prefer to assume another Veterans Loan, to avoid 7% interest rates". This is a type of creative financing that has been talked about a lot lately since the memory of 3% mortgages is still in our recent memories. 

A FHA or VA loan is technically assumable, meaning the buyers are able to take on the seller's current mortgage (if the loan documents state that is possible, you qualify, etc). That sounds great in theory, right? If the seller got a loan 3 years ago and it's at 2.875%, that's a heck of a lot better than the 6.875% that you might get quoted today. However, if you're assuming the loan, you're also assuming the loan amount. You can't increase it to match the purchase price/amount of the current contract.

So let's say the seller bought it 3 years ago and their loan balance is $200k. If it's selling for $500k, and the mortgage that you'd be taking on is at $200k, then that leaves a balance of $300k that you still need to bring to the table. In theory, you could get a second mortgage for that balance (or a portion of it). That said, I don't know of any lender that would do that. Any lender or bank wants to be first in line if something goes wrong and you stop paying. Being a second mortgage, they wouldn't be first in line. 

That said, a buyer can still buy that property at $500k and get a normal loan right now with a smaller downpayment. With househacking, that can be as little as 3% if you're a first time homebuyer, conventional loan, or 0% down with VA/USDA loans. The only reason the above example was so cash heavy is because he was specifically targeting the assumable loan piece.

Does that make sense? 

@Logan Matlock What are you investing in? LTR, STR, MTR, flips, househacking? There's so many different ways to invest and everyone will give you a different answer on ROI (return on investment) criteria or what THEY use.

Go back to the most basic question. What is your goal? Are you looking for cash flow? Are you trying to quit your day job or just have an investment on the side? Are you trying to reduce your monthly expenses? 

Start there, have a clear vision on what you're trying to accomplish, and then see if Charlotte is a market where you can achieve that. 

@Jack Hamm I love where your head is at! Investing early is the best way to build wealth and financial freedom. But you already know that. 

1. You know your mom and uncle. What would appeal best to them, numbers and spreadsheets or something else? 

2. Would the cosigner be bringing the downpayment or would you do that? 

3. What's the budget? 

4. is this going to be close to the university so you'll have a large pool of tenants? 

5. What happens after you graduate? 

I would first think through all these answers. As far as finances and your budget, talk to a lender and Realtor to see what's reasonable to expect in the market and what the monthly payment would be (or a range).

I also wouldn't expect/get discouraged if they say no or need to think about it. Keep bringing it up and talking about real estate investing if that's not something your family is overly familiar with. Cosigning a mortgage is no small thing that you're asking. Get all the numbers together and a plan together and approach them with a strategy that you think might appeal to them. 

Good luck!