All Forum Posts by: Michael Kotylo

Will you be doing the rehab yourself? @Mindy Jensen does live in flips/rehab to rentals all the time. It is a good strategy but dealing with the construction will be a pain.

Maybe do a furnished rental for a few months until the construction is done?

I got started house hacking a 2 bed 2 bath condo that I turned into a rental after buying a duplex house hack. Best way to get started since you can do low money done to stack up rentals.

I like to go multi-family early on to grow more units. I like having multiple renters covering one mortgage on a property but every one has to start somewhere!

Maybe I should put more thought into house hacking ideas. So you essentially started off investing by just having a roommate/tenant? Perhaps I could do that in the first house I buy...

I keep thinking I don't need a roommate but the savings would really add to available capital. Thanks for the insight!

1 Vote

Quote from @Keira Hamilton:

It depends on how heavy the rehab is, but if it's major I don't really see living in the property being feasible. Let's just say you were to live in it while making repairs. Once you have it rented out or sold, where would you live next if your condo was rented out? Would you have the capital to immediately pull off the next move, or would you be searching for a place to rent?

How do you plan to finance the purchase and rehab? Most financing options I'm aware of for this type of project are for non-owner occupied properties.

@Keira Hamilton

Thanks for your reply, I appreciate it!

I just talked over the strategy with a family member and I think I would need to set aside 3-4 months of expenses for the house while living in the condo. 50k in rehab was the ballpark estimate from my licensed builder friend who walked the property with me. The price was 300k and ARV would have been around 440k verified by local comps. Would I have the option to stay in the house, refi and pull equity out of the property to buy another house with?

For financing, I was planning to do FHA 203k with 3.5% down and 50k in reno budget. I could also do 5% down conventional and pay all rehab costs out of pocket if it's possible to cash out refi and get all my money back when the rehab is done.

The long term goal is to be able to keep buying and renting out more houses.

Is there a more favorable finance option for my situation?

0 Votes

My plan is to move from my current condo into a house and live in the house while updating it until I can either sell it, or rent it out and move on to the next one. However, it probably doesn't make sense to live in a construction zone if you don't have to.

The condo would rent for $2200-2600/mo. I haven't accounted for rental income tax or property management, that's before tax, fees and maintenance. The expenses for the condo are $1250/mo. So the condo could potentially cash flow $800-1000/mo, conservatively. Not bad!

Should I even be looking for something to live in? Maybe I need to get a couple of lower cost rental properties in my portfolio, first.
How did you all get your start in real estate investing? What were your pain points and how did you overcome them? Any advice or suggestions are greatly appreciated.

2 Votes

All Forum Posts by: Michael Kotylo

Michael Kotylo has started 4 posts and replied 23 times.

Post: Another first time investor seeking advice.

Post: Another first time investor seeking advice.

Post: Another first time investor seeking advice.