All Forum Posts by: Maddison Martin

Do all rehabs need rewiring and repining? My real estate friend who was the one who suggested to do this but im not sure what knowledge he has on rehabs. He did say the house had a concrete slab which you would have to break through to do the repiping so I think this is why he suggested just to do it to while we are not living there and rehabbing it, but not sure if this is unnecessary expenses or a smart thing to do

Hello

My husband and I are thinking about buying a family friends house that she inherited. We will be getting it hopefully getting it for a steal (around 950,000 ) in class A neighborhood but its worth around 1.2 million.

It needs extensive work before I consider it livable.

This is my first time buying a property and need some advise.

This property has potential to be valued at 1.4-1.6 mil after remodeling and even more as there is potential to add 2 ADUs to the back.

We estimated around 175,000 of work needs to be done ( full remodel kitchen and guest bathroom) new floors, windows, repiping and rewiring etc. 

We are putting a huge deposit down on the house ( around 50%.)

My question is what is the best way to finance the 175,000 for the rehab. Do people typically just take out a bigger loan to finance it or are these special loans for rehabs with lower interest rates? 

Or not put down such a large deposit and use that money for the rehab? We will be paying rent at our current place while the rehab is being done so we would be responsible for rent, mortgage and the rehab.

I live in southern California is this help at all.

Any advise would be great! thank you 

Hello!

A lot of these blogs I am reading are from out of state with very low cost of living so I think If someone from this area could answer this, it would be very helpful for me.

So my husband and I are currently living in one unit for the past 4 years that is part of a triplex/multifamily property in Belmont Heights in Long Beach, Ca. It is a very high cost of living and my landlord has been renting out the triplex for a little below market value for the past few years, however he is going to be selling the property ( all three units)

  (This area is considered very nice and "shouldn't" depreciate in value. )

I have been trying to deep dive into bigger pockets, reading bigger pocket books, watching videos but  a lot of the resources talk about multi-family properties as purely renting out all units and not actually living in one of the units.  I feel like all the calculations ( ex 4 square method analysis) and cash flow are going to be not reflective of out current situation since we will be living in one unit and renting the other two units. This is causing difficulty for me to understand if this is a good investment property or not when I do an analysis on this property.

We are getting a huge downpayment from our parents for a house. 

When I do the 4 square method just basing it on the other 2 rental incomes we have negative cash on cash return and negative Cash on cash ROI. We would be paying more monthly i we bought the place than we would be if we were just purely renting. However we would be "getting more house" ( access to a second back yard, tool shed, driveway, second storage unit, etc)

When I look at other houses in the area, with the intrest rates as they are, I don't understand why anyone would buy multifamily and rent it out when all of these calculations would be negative cash flow.

Is it just based on property appreciation alone and the hopes of mortgage percentages eventually lowering and slowly increasing rents?

If someone could help me understand or your thoughts would be great.