All Forum Posts by: Matthew Morrow

I think that the obvious answer here is to House Hack, but hear me out and please tell me what you would recommend!

I have house hacked 2 single family homes in Colorado Springs, moved out with both rentals cash-flowing very modest amounts annually, and am actively looking for the next property around Allentown, PA.

My 2 options: 

Add to my portfolio and House Hack for the 3rd time

I know that house hacking will be the easiest barrier to entry around a big down payment, has the chance for a lower APR with a primary residence loan, and I am comfortable using this strategy as I have done it twice in the last 3 years. I am looking at a 2 year horizon before I would move out and turn the property into a LTR to add to my small portfolio whether it be a SFH or a small MFH (4-plex would be my max).

I would have about $30k - $40k for a down payment, closing costs, and a few months of reserves. 

Sell my portfolio and scale into something larger

Over the last 3 years house hacking I have accumulated a decent amount in equity that I am very proud of, but am extremely hesitant in touching the equity to scale my portfolio at this time. 

I would have about $100k - $120k in equity before agent fees, closing costs, and capital gains tax if sold. I would not be eligible for a 1031 exchange, and when looking at refinance rates on 3% and 5.5% rates respectively, the numbers would not make sense to keep the properties and scale. 

Where my head is at and my future goals with REI

I am very hesitant to sell off cash-flowing properties and have the voice in my head saying "if it ain't broke, don't fix it". I have also never been in a position to have a substantially larger down payment in order to be considering a different REI strategy that house hacking.

I am investing in REI for my families future and have absolutely no intent of looking to "get rich quick", replace a job, or use father time as an excuse to make hasty decisions and potentially leveraging myself too far. I know so many investors that have "x doors" that will always be a number greater than I am actually looking to achieve.

I guess what I am wondering is if I am not being as ambitious as I should be to look for those larger deals, or if I should keep looking to add singles instead of home runs to reach my goals in this long journey.

Thank you for reading this, and if there are any other investors, like me, that feel like they don't know their next step please share your story! It is always extremely eye opening to see how our community can creatively find solutions as one. 

I'm curious, within your own real estate investing biz, what is the one thing you hate doing but needs to be done to run your business?

Hey guys,

Question, I want to get a HELOC. I've checked into my Credit Union and Primary bank. The CU offered me $200k, interest only or principle and interest payments. First year a rate of 5.24% and after that it's 1/2 point below prime for the life of the loan. $550 for an appraisal of my primary residence, no other fees.

My primary bank offered me $300k, principle and interest payments only, .09% above prime the life of the loan and an $82 dollar fee. 

Which would you guys choose? Some background, I am a new investor looking for my first property. I'm roughly 40 minutes south of Allentown, PA. My primary residence is paid off which is why I want to get a HELOC.

My plan is to buy a few LTR’s to start out. 

Thanks!

Zak D. 

I would be afraid putting more money into something that does not get any offer.

Would check my numbers, lower the price as much as possible and keep that basement money for the next deal.

You can put more money and still get no offer.

I was thinking same thing. Your client pays  $20-30-40k in commissions and then a year or 2 down the road the loan gets called and the “buyer” can’t pay off the loan and walks away. I’m not sure your client would agree you worked in their best interest. Maybe if they could afford to pay the mortgage off and wanted the property back but they probably wouldn’t be ahead. 

I don’t know how much more I would want as a seller. But it would be A LOT. (10-20%?) And then I wouldn’t want a buyer who would pay A LOT more. Because all I would be thinking is why would they pay a lot more if they don’t plan to screw me over. 

I think this is a desperation move by a seller in a bad market and I’d still go with some kind of lease with an option where the title stayed in my name. 

Hi Matthew, 

I wanted to discuss the classification of a property as modular and its impact on value. I am currently in the process of purchasing a property in Upstate NY that was originally listed as a Mobil home. However, the owner has made professional additions such as a 500+ square feet family room and a 500 square feet deck, which greatly enhance its value. I am considering refinancing the property, but I am unsure if a bank will still classify it as a mobile home. With these additional rooms, does the property now qualify as a regular home? It certainly gives the appearance of a spacious and luxurious living space.

Thanks, Jack