All Forum Posts by: Matthew Brill

@Taylor Busick

It's a great idea! You should find some local contractors and ask rough costs and the city/permitting. If you put in an offer on the property, you can then have a contractor go in during the inspection period and give you a bid. From there you can assess if the cost is worth it.

Definitely look in to house hacking like @Sean C.

I agree you aren't too late! I think the most prudent thing to do is to house hack. You will have both less expensive living costs, a future investment property with less money in the deal, and a great introductory course on rental investing.

I would start with house hacking. It will be a good intro into the investing world. Happy to talk with you if you're interested.

You will definitely need to look at comps to determine ARV and to see if the increased rental rates are worth the use of capital. I would be most concerned on how the property functions as rental once you move out. If it gives you what you need at that point I would then back into what your living expenses would be as an owner occupant to decide if it's a good deal for you. Also keep in mind that for a 2-4 unit, you will only have to put down 3.5% with an FHA loan but Fannie Mae requires a minimum 15% down and Freddie Mac requires 5% down if you meet their income limits.

There are a few moving parts here. Happy to talk it over if you're interested. But I think you're on the right path.

You are trying to get a 2nd mortgage on your duplex? Or get a mortgage on a new property?

What is current market value and what is your outstanding loan balance?

This will be market specific. But if it's there it should be legal. It will also depends on how the county views the property and how it is zoned. The benefit of living in the property is that you have more rights to the property. It will be a bigger issue for if/when you move out and want to rent it out as 2 units. Your best way to get a definitive answer is to call the county assessor with a subject property and ask them.

You can connect with other investors in the market and they may be willing to share with you which wholesalers are worth your time.

 Correct. For investing purposes (and for people that are good stewards of their money), putting down more and making extra principle payments isn't an efficient strategy.

If you are repeatedly losing offers to other bidders because of FHA then it may be worth considering. You can always purchase the house with a conventional loan and cash out refi into an FHA if you want to get some of your cash out after closing. Realize that for a 2-4 unit conventional mortgage, Fannie Mae requires a minimum 15% down and Freddie Mac requires 5% down if you meet certain income limits. You'd to work with a lender on this.

The other thing is that the higher down payment will decrease your ROI but it will also increase your cash flow. The more important thing for me is more the fact that the higher down payment will take away funds for the next deal.