All Forum Posts by: Miles Morrison

@Angelique Tinney

Will owner occupied loans be discussed? Particularly the Home Possible loan from Freddie Mac?

1 week ago I was preapproved at 4.125% rate for 5% down on a 310k property with $4800 in annual taxes.

Now, my rate has gone up to 4.875% which obviously affects my affordability and I understand that. But my lender is saying that Freddie Mac is requiring me

To put 8% down, even at 250k purchase price.

I find it hard to believe 7.5 basis points affected my affordability that much. I want to be able to leverage this loan and only put down 5% on my

Small multi family first property but she says she believes Freddie Mac wants to see me put “more skin in the game”.

How finicky is this loan? Does this make sense?

My goal is to buy my first property this year, a house hacked duplex, move out after 1-2 years and repeat and have a question about reserves.

(I prefer a conservative mindset)

Example property: age 1930-40ish

Purchase price: 200,000

Down payment: 10,000

Piti: 1300ish

Rent: 1000 per unit (2000 total once I move out and fully rented.)

While living there I will cover $300 of the mortgage

I want to be prepared for cap ex, vacancy, repairs and property management (even though I plan to manage the property for the first 5 years at least), etc. This would be a buy and hold.

- assuming 10% PM fee, 5% vacancy, 5% repairs, 5% cap ex

= 500 monthly put towards reserves

Leaving with cashflow of 200 per month

6000k in reserves at the end of the first year.

I understand there are a lot of other variables that go into this, but these are my main questions

1) when do you stop/scale back how much you put into reserves?

2) do investors usually open a separate/business account to keep finances separate?

3)does this seem too conservative

4)this is the correct general way to think about reserves, right?

Thanks for any advice

I am also looking for my first house hack and have looked into "working to learn" part time jobs and have came across a few options that I'm sure are available in most markets. Part of me thinks I may be better off working hard at networking and adding value where I can and this something I need to get better at as a new investor. With that being said, there are some jobs I have come across that I thought could be educational. Leasing agent, which you can be pick your own hours, learn how to lease a place so that when it's time to lease your own you have experience and get paid commission per lease signed. I have also have come across wholesale companies that want part-time, full commission sales-minded people which would probably be a great way to learn how to find off-market deals and surround yourself with investors.

I have thought about the "work to learn" mentality a lot the last few weeks and agree with @Antonio Cucciniello to a certain extent. You dont need to work in RE to be an REI. When I was browsing these jobs it felt like "productive procrastination". Similar to reading book after book but not taking action on what was learned. I too am not in the greatest financial situation to buy the first property within the next 6-8 months but I've personally concluded im better off building my network (while fixing/building my financials) until I'm approved for the type loan I want for the property type I'm after. With that being said, one of these part-time RE jobs may be the best way for you to build your network as all situations are different. Good luck on your search!!!

@Cassidy Burns buying my first property/house hack that’s cashflows $200 after move out.

@Hailee Money wow, congrats Hailee! I am also new to REI and looking to buy my first house hack with my girlfriend in an almost identical price range. It sounds like you had great creativity and found a good deal. I'm curious, did you work with multiple agents or just one?

@Salvatore Lentini thanks for the knowledge!

@Salvatore Lentini Looking to house hack with my GF in Milwaukee. She’s a teacher and I lost my sales job and have been on unemployment the last few months and will start substitute teaching and doing odd jobs within next few weeks while I decide if I want to do sales/teach etc.

We have 70k debt collectively between student/car loans. We currently have enough for $20k down including all closing costs and still have 4-5 months of a safety net. We also like the idea of the multiple house hack method to build up a small rental portfolio while still in our 20’s. Starting with a house that is in a preferred area without too much rehab as that could be overwhelming for a first property.

Logistics questions: 1) who do you suggest we add to our "team" to get the search started? I'd say an agent and a lender for sure. Should I also look for an REI CPA & REI lawyer or could one/both of those be added later in the process?

2) the market is competitive: we're between an FHA loan or 5% conventional. Does the 5% conventional give us an advantage in securing a deal in a competitive market compared to FHA? I also have time to search for off-market and I know that would help either method, correct?

3) With the multiple house hack strategy (live in first house hack 1-3 years then move out a turn into cashflow rental) in mind should the first duplex be evaluated as a rental before buying it as a house hack? Could a house that doesn’t cashflow at the time of purchase turn into cashflow upon moving out because of paid off principle/appreciate/repairs/rent raises?

@Marcus Auerbach thank you, I will be watching!

@Zarak Sharwani Thank you so much for this!

@Raphael Abreu this info is exactly what I am looking for as I’m currently splitting $1175 in rent with my girlfriend of 8 years and we’re looking to house hack our way out of college debt.

I have a few questions:

1) if rental income doesn’t cover full mortgage at what point do you think a deal just isn’t worth it? Like if we have to cover $500 monthly is that deal just not worth it even though it reduce our “rent expense” while building equity?

2) what do you do with the property upon paying off debt and wanting to move out?

- turn it into a cashflow rental

- hope it appreciates and sell it and maybe use 1031 exchange to do it again with different property?. Or sell it and basically begin another REI journey like BRRRR?

3) is banking on appreciation in this market risky? Is there an educated way to predict appreciation? I have no problem doing repairs/upgrades while living there.

This will help me narrow down what kind of property I’m looking for. Do I evaluate as a rental or just a way to reduce rent and build equity?

Thank you!