All Forum Posts by: Mathew Fuller

Hello,

I am currently in my first house hack, with the goal of renting it out and holding onto it long term. The issue is I did a low money down conventional, which means I have PMI and a higher mortgage payment. Right now if I were to rent it out I would be negative 2-400 a month, not including vacancy, cap ex, etc..

I do have a decent amount of cash saved \ invested between my partner and myself, so getting another house shouldn't be a problem. I am wondering from a wealth building perspective would it make more sense for me to rent this house out and have the tenant pay all of the interest, insurance, pmi, and a little principal through rent, and get the depreciation tax benefit, while I cover the 2-400 a month in principal, and buy another house hack. or would it make more sense for me to pay down my principal for another year or so aggressively until I hit that 80% LTV, and then rent it out and buy another house hack.

I live in a high appreciation and expensive market (Colorado). So if the house is appreciating 3- 5% a year and all I’m doing is paying a bit of principal on the property, is that a bad idea \ strategy? I think saving up 80-100k for a down payment on a house here would take quite a long time and wouldn’t make much sense, but that’s what it takes to cash flow in this market from what I’m seeing.

Thanks for the thoughts

Hello BP,

My girlfriend is turning her house into a rental property, and I suggested based on a few real estate books that I have read that she get with a lawyer and have her house wrapped in a LLC for asset protection. My only concern is the bank potentially calling the loan due since in these books they disclose that this can potentially happen. The lawyer she's talking to says this is a possibility but highly unlikely, should I be concerned? If this were to happen, could we just reverse the LLC? What are the potential consequences of this? I am trying to do the right thing and have my girlfriend protected, but I also don't want to break any rules. This is the first time I have been through this, and I will be looking to do the same to my house in the coming months when I turn it into a rental as well. Is this a valid concern I have? Are there any other red flags doing this that I should be aware of? Thank you.

Hello bigger pockets.

I have hardwood flooring in my house that is pretty worn down and cracked / warped in some parts, I was thinking about refinishing it if it’s even possible, but maybe it makes more sense to do that when I sell the property one day. The goal for this property is for it to be a long term rental, therefore I need a cheap flooring solution. I’m leaning towards buying laminate flooring and laying it over top of the hardwood floor, I think this would be more appealing then having carpet in the living / dining room. I wanted to know what is the best / cheapest laminate flooring solutions rehabbers like to use to solve this type of problems for rentals, or if carpet may be a better way to go?

I am not flipping the house, I want something cheap and easy to replace for renters.

Thanks for your time.

What are some good resources on learning master lease to buy options for getting into commercial real estate? Or any good resources on learning how to get into commercial real estate with little to no money down. Sorry for the broad question,but I’m looking to consume as much information as I can for creatively financing commercial properties as a newbie investor. I currently own one home that I’m house hacking, and want to continue to pick up homes with owner occupied financing as time and money permits, but also want to get into bigger deals with more units.

Thank you

Hello BP

I am curious what other methods people are using to generate income for themselves aside from a W2 (401k, Roth IRA, HSA), real estate (rental income), and an individual brokerage account? What other creative ways can I generate income to help fund my real estate investing career?

I just closed on my house hack in Fort Collins back in November, I found the best way to learn  is to just jump right in. Books and Podcasts are great, and a lot of value can be taken from them, but as you know, you learn the most by doing and making mistakes. After going through my first deal, there's some things I did right, and some things that I did wrong, but I definitely look back at my doubts that I had before seem silly now that i've gone through with it. It's pretty overwhelming the amount of options there are, (multi family, single family, condo, townhome.. live and flip, turnkey, house hack, short term rental, long distance, what market is good for what, etc). One book I wish I would've read before first  was the Millionaire Real Estate Investor by Gary Keller. In that book he talks about the three corners of Real Estate Investing (I don't remember what he exactly called it)

1. 1. What type of property do you want? (Single Family, Multi, condo / townhome), there are different strategies associated with each.
   1. Are you ok with an HOA?
   2. Do you know what areas are doing good in your market?
   3. Do you know why you're investing in a particular property type? If so what are the reasons you'd choose a multi over a single family, etc
   4. Zoning
2. 2. What are your terms? 
   1. Loans: (No money down / CHFA loan, FHA, conventional, hard money, etc)
   2. Interest Rate? (Owner occupied financing (less than 20% down), investment (20% or more).
   3. Having your conditions to close on a property laid out
      1. What's acceptable cash flow? Do you need to live for free or even make money based on rental income, or are you ok with paying a little bit out of pocket every month and living for cheap with owner occupied financing (lower down payment (harder to live for free in an expensive market).
      2. Are you going to have the sellers pay closing costs?
      3. Are you going to have a warranty put in place that holds the seller responsible for house issues that cost more than $1000 to fix?
      4. Does the property need to be under market value?, are you ok with paying asking price?
      5. etc

3. Networking - Finding an agent / team / lender that are experienced and knowledgeable in the market you're looking for, and are fellow real estate investors. They can help you find great deals with your given terms / property type, and also help you learn along the way. My first property I looked at with my Agent was a house in Westminister, it was a 5 bed 2 bath home, 3 of the bedrooms were in the basement, I thought to myself looking at the property (this would be a great house hack, ill just rent out the basement rooms, not knowing any better about code), my agent informed me that the rooms were not up to code and didn't have any egress windows / wells installed, and that it would be an expensive cost to have them brought up to code, and that this particular house wouldn't be a great house hacking investment, so I passed. If I just picked any agent that just wanted to sell me a home, I could've wound up in that house and that would've been a costly mistake. Working with someone who actively invests and has experience is a game changer.

In short, iron out what strategy you want, figure out your terms and stick with them, find your neighborhoods, and find a great real estate agent to work with that is also an investor.

You'll be in an investment property in no time, best of luck.

When I first learned about Roth Ira's, It was to my understanding that the principal that I invested into the Roth IRA account (my already taxed income), was able to be withdrawn at any time tax and penalty free. What I couldn't withdraw tax and penalty free were the gains made off the principal.

I just called Fidelity to pull some of my principal out, and they said that I was under the 5 year period for my Roth IRA account and that I couldn't pull any money out until my account met the 5 year threshold.

Is this correct? Or is this some sort of mistake? I thought the Roth IRA acted as both a savings account and a retirement account.

What are your thoughts on the Real Estate market here in Colorado for 2020? Is the market unsustainable? Or is there room for continued growth?

Hello Bp,

What are you guys favorite brands and places to shop for new appliances and furniture for single family home rentals? I’m wanting to renovate the living room, kitchen, and bathroom in my property and bring it from 1987 to 2020. I want my house to look nice and modern and be enjoyable to live in, but also don’t want to spend a ton of money on the renovation since this is a buy and hold and will be a rental once I save up for my second house hack. I want to buy smart stuff that looks nice but is realistic for a rental. Any suggestions?

@Flash Alexander sounds good Flash. I’m already attending that group, it was my first time the week before last and plan on making it an every week habit. I will for sure make sure to say hello at the next meet up after the holidays.